Buyers are always wondering why sellers are out to gouge them for money.  To be honest, while there are a few who are doing this, most eBay sellers are making minimal profits. This guide is designed to give buyers a little insight into the life of a seller, and to explain the costs involved in doing business as such. Trust me, it ain't all champagne and caviar.

There are two types of sellers, casual and serious. A casual seller might list an item once in a given day/week/month. A serious seller has probably opened an eBay store of some type and lists some quantity of items on a daily basis.

The casual seller will be charged full price for his/her listing. A basic listing starts at around 35 cents with no bells or whistles and a single photo which does not get put into the gallery, only the listing. IE...you won't see a picture unless you click on the listing.

 A store owner can get the same listing for about 5 cents. Sounds good, doesn't it?

Now, lets do some basic math. If I sold the item to you for 25 cents, and the listing cost me 35. I lose ten cents, right? NOPE. I actually lose more. Why? Because eBay also gets a percentage of the sale price. Let's say I'm a store owner and I sell the same item to you for 25 cents. Even deducting the eBay fee I must still make money, right? NOPE. My listing cost me 5 cents, eBay took another two cents for the final value fee, so you're probably thinking I must have made at least 18 cents. NOPE. I had to purchase the item I sold to you. Even if I was lucky enough to get the item for free, I still had to go out and by the packaging materials. A small padded mailing envelope goes for about 70 cents. So right now, assuming I got the item for free, I'm losing 62 cents.

So how does a seller turn a profit? Well, obviously we don't always make the money from the winning bid price, especially when the winning bid is one cent. Hence, the handling fee. In order to insure that the seller does not take a loss on any item won, the seller is allowed to add a service/handling fee to the cost of shipping/postage. This fee is designed to cover the costs of the shipping materials, the postage, and a little extra for time spent listing, packaging and shipping the items. Is a one dollar handling fee too much? No, actually it is too little. Let's assume that I have plenty of room and an organized operation. Let's also assume that I can handle all aspects of shipping an item in six minutes. This means I can ship ten items an hour. With a handling fee of a dollar an item, I would make ten dollars an hour. Now, don't forget to deduct the money I had to spend to buy the shipping envelopes. That was 70 cents per shipment, or 7 dollars. My working wage is now down to 3 dollars an hour. Not so reasonable. If I made 18 cents per item on the sale, then we can add 1.80 bringing my wage up to 4.80 per hour. However, if we assume that I didn't get the items for free, and had to pay 25 cents per item, we'd have a wash. I paid 25 cents to buy them, you paid 25 cents to get them. I'm back down to 3 an hour. There is another cost that can eat up my profit quite easily. PayPal charges a fee for every transaction as well. It is also based on the value that the item sales for. I beleive their current fee is about ten per cent. That means my 3 dollar an hour wage just dropped to 2.75. If I have to go to the Post Office to ship the items, I incur gas costs. Lets's assume that the Post Office is close, say 5 miles. At today's gas prices, it will cost me about a dollars worth of gas for the ten mile round trip. I'm down to 1.75 an hour. Of course, some of the items we sell, reap in a larger profit. That's good, because they help to balance out the serious money inequity incurred by the items that sold for less than a buck.

So what's fair? Determining what is fair is difficult. It depends on the complexity of the item. A single new listing can take about ten minutes to list. If the items are similar in nature, allowing a template to be used, the listings may be completed in a shorter time span. It all just depends. To understand how complex and time consuming this is, here is a list of steps that can/should be taken to list an item.

1) Purchase or obtain the item. Costs inlcude gas to pick it up, cost of the item, cleaning of the item if required by eBay rules.

2) Item must be researched for cost analysis and category placement.

3) Select create listing.

4) Select category

5) Create listing title. May require research into make, model, year, author, artist, creation dates, etc...

6) Select options. Titles can be accented. You can select Bold print, and other options. All have additional costs.

7) Give a description of the item. Might just say BOAT, or you might have to include a lot of detail. Generally, simple ads don't sell. Usually you have to give enough information to help the buyer figure out just what they are getting. Instead of BOAT, you might put. 1967, classic Don Ronalsons, 8' foot aluminum row boat, with custom oarlocks. Now if you don't know all this, you will have to research it. It is also in this section that the seller can make additional comments.

8) Add a picture. In most cases, the seller will have to take a picture, upload it to his computer, then upload it to eBay. Once on eBay, it will have to be cropped and oriented before being uploaded to the listing. First picture is free, each additiona is .15 and if you want a picture in the main gallery, the group of listings you see before actually selecting one to look at, it will cost you.

9) Choose format...IE..Auction/Store/BuyItNow

10) Set up pricing. Could include an beginning auction price, a Buy It Now price, and a Reserve Price. Please note, that Buy It Now and Reserve pricing have fees attached.

11) Decide whether you want the listing to start now, or later. If you choose later, a fee will be charged.

12) You can also choose some advertising fees. The most common costs about 15.95 for 30 days of limited exposure on eBays prime pages.

13) Select shipping options. The other stuff is easy compared to this area. First is the domestic shipping, all within the U.S.A. You must choose between a dozen or so shipping optiosn. Depending on what you select, you may be required to input the size of the packaging that you will use and the weight of the item to be shipped.

14) Shipping options. You can select Flat Price shipping, and will have to enter the amout that the customer will be charged. This is the simplest way to do things, but it doesn't account for extra costs that you might incur when shipping to the farthest reaches of the U.S. Calculated shipping bases pricing on the objects weight, package dimensions, and the final destination of the object.

15) Other shippng options also allow you to set up combined shipping rules. Again, choices on how you want combined shipping to be handled. You can decline combined shipping, or add it, combining cost based on weight, or cost based on number of items.

16) Another shipping option is the shipping/handling fee.

17) After completing the domestic shipping, you now have to do the same for the international shipping. Same as all listed from 13 to here.

18) After completing the shipping, you have the option of selecting whether or not to accept returns. If you choose to accept returns, you must fill out the return policy. You have limited space to do this.

19) Additional Comments box. Exactly that. If  you got anything else you want to tell your buyers, this is your last chance.

20) Save. Hit save. If any errors occur, you will have to go back through your listing and correct them.

21) Errors corrected. Hit save. This takes you to a secondary screen which offers suggestions on how to improve  you listing. All options have additionla fees.

22) Hit Save. Your item is now listed. If the next item is similar in nature, you can hit sell similar item. It will bring up a copy of the item you just listed and all you have to do is change any data that's different. A huge time saver. Howerver, if you are listing a completely different thing, you will have to enter most of the data over. Very time consuming.

As you can see, it takes a long time just to read the options, much less to understand and do them.

For an eye opener, go to the sell option and do some research on opening a store. First look at how much a store owner pays to have an eBay store. At some point you will see a listing of eBay fees. Click on that link and take a gander at the seemingly endless fee chart. Then, if you are really industrious, go to PayPal and do the same thing. Now, if you are just plain masochistic, go to eBay seller help area and read the some fifty pages of guidelines, instructions, banned lists, listing rules, etc...Then go to the Answer area and look through the questions and answers. This will show you some of the problems that sellers go through. In particular, in the Answer area, type in Unpaid Item Disputes. This will show you some of the problems sellers run into, and what it takes to resolve the issue. Just for your info, if a buyer fails to pay for an item, it can tie that item up for two to three weeks, possibly longer, while the seller tries to reclaim lost fees for listing the item that was won and not paid for.

I realize that not all sellers are nice honest people, but then again, that's true anywhere you go. The key is for both the seller and the buyer to be responsible, patient, honest and forgiving. As a buyer, your first reaction should not be to leave a negative feedback when something goes wrong. For instance, you buy something, it shows up broken. You contact the seller, who aplogizes profusely and issues a full refund. Unfortunately, that was the only one he had and can't replace it. You don't have the item, and may have missed other bidding opportunities, but you have your money back. Should you leave a negative feedback? I'd say no, for the following reason. If the seller was pleasant, apologized and gave your money back, then the seller did his job. You should give him a positive, or at the very least, a neutral feedback. The place to ding the seller, would be the rating area ,on whether or not you think the item was well packaged. If the item was well packaged, and just got run over by a truck on the way down, that is not the sellers fault and they shouldn't be held accountable for it. Don't forget, negative feedback is near impossible to remove. The comments you leave in anger, may haunt you at a later date. Always try to resolve the issue by conversing with the seller, or opening a dispute with PayPal/eBay. You will always be able to leave your feedback later, but once left, the damage is done and the seller is less likely to want to help you resolve your issue.  This is not to say that you shouldn't leave negatives, there are sellers who are definitely deserving of them. Just use negatives judiciously and fairly.  After all, wouldn't you want the same?

As one who both sells and buys, I always try to treat each person as I would want to be treated. When I'm buying, I try to pay within 24 hours. If I can't, I let the seller know when they can expect payment. The seller can then make a note of this and it puts him at ease. I always leave feedback, as this lets the seller know that the item was received and acknowledges the effort he expended on my behalf. It also allows him to remove the listing from his list of incompleted orders, making it easier for him to do his job. As a seller, I always try to keep my customers informed. I try to send an invoice within 24 hours of the auctions end, and acknowledge their payment, once received. I then notify them as to when their item will ship, usually within 24 hours of confirmed payment.

The other thing to keep in mind is that sellers and buyers are  you and me. The person selling you the limited edition Griffey signed baseball, might be the single mother of three, working out of her living room, just tying to earn anough extra money to feed her children. At the other end of the extreme, the eBayer could be Griffey himself and maybe, just maybe, if you're real nice, when he sends the autgraphed baseball, he just might send you a pair of tickets to the next game. On eBay, anything is possible.

I hope this provides a little insight as to why sellers do what they do. If you have any more questions, drop me a line and I'll be more than happy to provide you with a real answer, or make one up, if I have to.

By the way, if you like a looser approach, please check out my ebayblog Sanity Is Highly Over-rated. Go to eBay Community, select blogs, then enter the name of mine. I have an odd sense of humor and I do provide some helpful tips to newcomers. Of course you have to wade through my semi-lucid comments to get to them, but there is fun to be had, I assure you. It's up to you. Good luck and safe bidding.