NEW SELLERS BEWARE: Count the costs BEFORE you list.
( Just some tips on selling stuff on eBay. Hope they help. )

Here's a real-world example of the ridiculous fees being charged by eBay/PayPal:

Backdrop: I listed an item for sale for $69.99 Buy It Now or best offer. After turning down some lowball offers at $20 or $30 each, it sold to a guy in Spain for the $69.99 Buy It Now price.

Here's what it COST my company to actually sell this item on eBay: (Remember, this is a REAL-WORLD example from 06/08/07.)

"Insertion fee": $2.40
"Subtitle fee": $0.50
"Gallery fee": $0.10 (usually $0.35 -- it was a promotional sale on this fee)
"Supersize Picture fee": $0.75
"Final Value fee": $2.77
PayPal's receipt of payment fee: $4.39
(This includes the receipt of the $69.99 Buy It Now price, plus $34.99 for Priority shipping to Spain.)
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That's a total of $10.91 in fees, just to sell a freakin' $70 used part !

That's INSANE.

It cost me a trip to the post office, plus my time. The actual shipping via that method to Spain cost me $32.00, so the "handling" fee padded into the shipping & handling got me $2.99. If it costs only a gallon of gas to drive to the local Post Office, with gas at over $3/gallon, that means that the "handling" upcharge on the shipping didn't even cover the GAS to go & drop the package off at the PO.

If you're a buyer & you ever wondered why the prices for so many things for sale on eBay seem higher than other places online (such as online megamerchants), LOOK NO FURTHER than eBay/PayPal itself. They're BENDING SELLERS OVER on fees -- & by extension, YOU. You see, sellers DIRECTLY pay ALL fees. Either they go out of business, or they then pass those fees on to YOU. As a buyer, this is the reality.

If you're a seller, KNOW THIS. Do your calculations ahead of time, so you're not surprised. (After selling things hundreds of times on eBay, I'm not surprised, but I am still perpetually annoyed by it. Without any significant competition, eBay will simply continue to increase & increase & increase some more the fee$ that they charge.)

Note: Selling other types of things, such as cars, real estate, etc. is MUCH more expensive. For example, I once listed a piece of property on eBay. Including pictures, it cost me over $153 to list it for 30 days. The exposure I paid eBay to get for my property got me this: I got a single offer on the property for ONE HUNDRED DOLLARS ! $100 ! I then relisted it, but as an auction-style listing, costing me over $153 -- AGAIN. (That time, not even a single bid.) Since it was not the same kind of listing (auction v/s Buy It Now), eBay refunded ZERO of my dollars, despite my complaints & a phone call. Over $300 down the tubes (not counting getting the pictures taken, etc.), with NOTHING but wasted time & effort to show for it. Another example: If you list a car for sale, say goodbye to about $50 or so when you list it (counting about a dozen "supersized" pictures, subtitle, and so on) -- & that's NOT counting what it costs you if it sells & they pay you through PayPal. In fact, eBay will charge you ANOTHER $50 immediately when your car hits its reserve price, even if you don't end up getting paid for the car &/or the deal ends up falling through ! This does NOT count more $ shelled out if you relist it, and so on.

Here's the kind of situation these fees & policies end up creating:

1) IF you have NOTHING -- & I mean, NOTHING -- sunk into the item you're selling, then eBay can be a GREAT place to sell it (if you know what you're doing, know how to package stuff up properly, charge enough for shipping, etc., etc.). 2) If you do actually have some $ sunk into something, new or used, you'll have to increase the selling price of the item and/or your shipping & handling charges just to cover the fees associated with selling the item on eBay. If you can do that, then eBay can be a good place to sell it. (This does NOT count the normal costs of doing business, if you have those: rent, electricity, broadband web access, and so on.) 3) If you have bought something ON EBAY & paid very little for it (and the person who sold it to you ate all those fees), and then resell it on eBay, then eBay can be a great place to sell stuff. If you then recycle it back into eBay, they get another whole round of fees into their coffer (listing, listing upgrade, final value fees, PayPal receipt of payment, etc.), all over again. I'm sure they love that. 4) Another option: The perpetual RElisting strategy. (I personally know one very experienced PowerSeller who has honed this method to near-perfection, IMO.) You put your prices (Buy It Now &/or reserve price) high enough such that you can "absorb" MULTIPLE relistings of the same thing before it sells. Personally, I HATE this, as I in general HATE to relist anything. Nonetheless, sometimes I've kept a decent price on an item (refusing lowball Best Offers, for example) & ended up selling it at the Buy It Now price the THIRD time I listed it -- in a row. 5) Rare/hard to find/discontinued/collector's item stuff: This is one area where eBay can really SHINE. Simply put, there are some things that you can ONLY find, typically, on eBay. This produces a seller's market, of sorts. People HAVE to buy it from you, so they must either pay what you charge, not get it, or outbid everyone else who wants it (& has an eBay account & some $ at the time) in order to get it. That is a nice position to be in, if you're the seller. (The eBay/PayPal fees don't tend to bother you if you just got 5 times out of something what you put into it, or sold some rare thing for hundreds or thousands that you had NOTHING sunk into.) 6) Copyrighted stuff / monopolies: If you're the sole legal distributor on eBay for a copyrighted work & have a contract to prove it to eBay, then you can be the ONLY eBay seller in the world selling that stuff. You can have other sellers' listings shut down according to eBay's VeRO program that polices copyright infringement, getting rid of your eBay competition on that stuff. If anyone wants to buy that stuff on eBay, they simply must go through you. (We're about to do this very thing, having just recently signed such a contract with a copyright holder.)

There may very well be other example/strategies on how to break even / make a profit selling on eBay, but these seem to be the main ones that I've seen, as a buyer & as a seller, on eBay.

Further notes: If you're going to sell stuff on eBay, it'll help you to take the following advice:

1) PROPERLY PACKAGE the stuff you send out to help prevent damage during shipment. This is VERY important for customer satisfaction. (Wadded-up newspaper is rarely adequate.) 2) Just because you did a good job packaging something -- even if you did an excellent job -- does NOT automatically mean that it won't get damaged in shipment. (We've had both the USPS & UPS kill stuff we've bought, & stuff we've sold. That's the way it is.) PAY FOR INSURANCE on EVERY package you send out. Insure it for the FULL amount. It's NOT worth the $1 or $2 you think you'll save by not insuring the package. Pay the little insurance charge. It's worth it. 3) ALWAYS have either Delivery Confirmation or some other form of tracking on EVERY package you send out. It's your proof (especially to PayPal) that you sent something, & where you sent it to. If someone files a PayPal dispute to try & get their money back from you, a simple Delivery Confirmation or tracking number can END the dispute right there. Use it -- every time. Send the stuff to their confirmed address on file with PayPal (if they have one). 4) TELL THE TRUTH in your listings, in eBay messages, in email, in person, all the time. Nothing like being lied to to piss someone off, right ? 5) KEEP your eBay messages & emails back & forth between you & customers. 6) RESEARCH your stuff. Know not just what it is (& is not), but specifically two things about it, regarding pricing: A) What it's been going for ON EBAY recently. Check completed listings in a search for the item. That'll show you what happened recently with listings that are already done, so you can see how auctions ENDED. Some sold, some didn't. Some were relisted, then sold. Some didn't. Some at Buy It Now prices had zero sales. Others had listings that were live for less than a day before someone snagged them up at the Buy It Now price. This info. is valuable to you. Use it. B) See what other sellers are charging for that item (or one like it) ON EBAY -- RIGHT NOW. If you're currently the ONLY eBay seller selling something, maybe you can not only sell it effectively, but at a higher price than what it sold for last week, when 12 different guys were selling the exact same thing & you had competition. What #6 amounts to is, know your market. Often, eBay is its own animal. Just because something goes for $X elsewhere doesn't mean it'll sell for that on eBay. Sometimes, it'll sell for more on eBay than elsewhere, other times it'll sell for less, & still other times it won't sell at all on eBay. Sometimes, an item will sell for twice as much one week as it had the week before -- same item, from the same seller. The prices at which things sell can, and often does, fluctuate heavily on eBay. (Consider yourself warned.) 7) If you run auction-style listings, it's almost always a good idea to put a RESERVE on the item. We once sold an engine with a 1-cent starting bid, no reserve. Only ONE eBayer bid on it, & it sold -- for a PENNY ! Of course, as described above, that didn't come close to paying for our fees just to list it. (For me, that was simply a lesson learned.)

Hope this helps. If it did help you, such as giving you at least one idea you can use, then please vote for it below by clicking on the "Yes" button. Thanks.

FEBRUARY 2008 UPDATE:
Now, the Final Value Fee has been raised by THE BIGGEST MARGIN in the entire history of eBay !
What was 5.something% will now be 8.75% (of the initial $25, plus 3.5% of the amount from $25-$1,000) !!  Plus, the reserve fee is now DOUBLED -- AND it's NON-REFUNDABLE.  This, and MANY other crazy changes, have led us to join the Feb. 18th - 25th worldwide boycott of eBay.  (And to think, they advertised this as a fee DECREASE !  Pathetic.)