After 7 years and over 8,000 successful sales on eBay I have developed my own system to determine the "Handling" fee on most items I sell.  If it is a new item that I purchased at wholesale or a few dollars less then a fair retail (this can be coupon specials at local stores or Costco, or mark-down and sale items) then I must price the item low enough to sell on eBay and also cover my real costs of sale.

What is the cost of sale...well it is the cost of the product, the fees I pay eBay and Pay Pal and of course the cost of packing materials, my time, daily drive to the post office or UPS, etc.

 I have calculated that eBay and Pay Pal alone can cost me 10%-15% of the total sale price of the item.  How do I get to that number, easy.  Many items must be run a number of times before one sells. Not everything listed will sell, but all will be charged an insertion fee.  If I run 3 or 4 of the same item in a given week and one sells, my cost of sale rises at a great rate. The insertion fees on the 2-3 that didn't sell can amount to 10% or more on the one that does.  Now add the FV fee and the Pay Pal fee which can climb to as much as 3.5% on international sales and you have your 15+ % sales cost.

So how do you discount a new item, beat the stores and still make some money...it is hard, but in order to survive on eBay you have to have a mix of those items with small margins and others you bought at a steal at an auction, close-out, etc. that strengthens the bottom line.

I must add a 7-10% Handling fee on all items. A $50 item that has a $5 Handling fee is still acceptable to smart customers who will look at the total cost of the items which will include the S&H, as long as it still beats buying it in a traditional store or at an online dealer.  It is all about the total cost to most. On higher valued items my percentage "Handling Fee" goes down.  Similar to the eBay Final Value fee idea.

In some cases I will even explain these facts on an auction and include a link to eBays Fee Schedule.  Some buyers never realize what is costs a seller to sell an itemon eBay and I think this is important.  I noticed once I started to include this link, I never get buyers asking me to lower my prices or discount my S&H fees.

Now on used merchandise or items I bought at 10¢ on a dollar and sell cheap...the Handling fee is much lower, because there is enough of a profit margin on the items selling price to absorb the higher handling fees.  Often I figure this stuff might have no cost or very little cost to me (cleaning out the attic etc.) so anything I recover on these items is pure profit.

One must balance their true costs to determine their final selling price and handling fees otherwise like so many on eBay you will not only be working for minimum wage, but you might even take a loss when all is said and done.

Ever wonder how some sellers seem to purchase an item at Costco and sell it for only $5 more then they paid?  Me too and yet I see plenty of these guys doing just that.  Unless they are stealing this merchandise there is no way they can make any money.  Maybe it is their loss leader or they just need to build their sales volume to maintain their Power Seller status, but you can be sure they are not making any profits on those items.

Remember one thing...there is always someone that can offer the item for less, don't try to be the cheapest one offering the product, try to be the best one offering the product.  Buyers are smarter then  you think.

If you have found this guide useful, please vote as such and help me bring more money saving tips your way. If you want to read more about saving on eBay fees, self insuring your shipments to make big bucks and other great tips, read my other guides now on eBay Guides. Remember to Vote at the bottom of each article and help me help you.

Good eBaying To All,

Len