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In today’s article, I’m going to look at whether or not it is cheaper to sell on eBay or Amazon and which one has the highest cost fees. But the truth though is it’s actually quite a complicated question and it’s going to depend on three factors.
One, it’s going to depend on the type of account that you have with eBay and Amazon. Two, it’s going to depend on the type of item that you’re selling. And three, it’s going to depend on how you plan to fulfill that order.
So, unfortunately, there’s no clean answer for you. I can’t just come out and say eBay is cheaper or Amazon is cheaper. You’re going to have to do the math for yourself.
Let’s start out by talking about eBay’s fees. The first fee that you’re going to need to pay is the eBay insertion fee. eBay lets you list 20 items per month for free. After, it’s going to cost 30 cents per item that you list.
If you have a basic eBay store, this is going to cost you 20 cents instead. If you have a premium store, it’s going to cost you 10 cents. And if you have an anchor store, it’s going to cost you just 5 cents.
But if you choose to list auction-style listings instead, with the basic store, it’s going to cost you 25 cents for insertion fees, it’s going to cost you 15 cents for a premium store, and then 10 cents for an anchor store.
The one exception to this is if you’re listing items in the collectibles category. If you’re doing that, you get to list an additional 20 items per month for free. Now, if I’m going to be realistic about you as an e-commerce seller, if you want to be serious with this business, you’re going to be listing more than 20 items per month.
So this insertion fee is actually very relevant. The next fee that you need to pay is the final value fee. This is a fee that is paid out on the percentage of the item cost that is sold. You will only pay this fee, though, after you have successfully sold the item.
On eBay, if you don’t have any type of a store, this is going to be a fixed 10% fee. Now, that is a 10% fee on the cost of the item and the shipping that you’re charging and so this is a huge fee.
But with an eBay store, you can make some substantial savings on your final value fee and it will cost you 4 to 9%, depending on the category. But you also need to keep in mind that eBay store subscriptions are definitely quite pricey.
For a basic store, it is $19.95 per month or $191.40 if you buy a year’s subscription. Now, if you are a power seller, you make even more savings because you get a bonus 20% on the final value fee on the cost of the item sold.
Now, that is not the shipping, but you get it on the final value fee of the item price. To help you understand, I’ll give you an example. Let’s say that you’re on eBay and you’re selling a book.
Your book sells for $20 and you’re charging $5 for shipping. Your book has a 9% final value fee on the book itself and the shipping that you’re charging. So a 9% fee works out to be a $1.80 on the book and then on the shipping, it works out to be 45 cents.
Your power seller 20% discount is applied to the $1.80, which is the final value fee on the book and not the 45 cent fee, which is the fee that is applied to the shipping cost. This means then that your $1.
80 final value fee on the book goes down to just $1.44 while of course, the final value fee on your shipping remains at 45 cents. This means then that you’ll be paying $1.89 for your final value fee after the discount of having an eBay store and your power seller discount is also applied.
The other sneaky fee that you need to account for when selling on eBay are the PayPal fees because the vast majority of your transactions on eBay are going to take place on PayPal. Every PayPal transaction has a flat 45 cent fee plus an additional fee that is based on the percentage of your sales volume.
So your fee is based on the amount of sales that you make in a month. For most people, this means that their fee is going to be between 2.9% to 2.2%, depending on how much you sell. So basically, to work out your total eBay fees, you need to go insertion fee plus final value fee plus PayPal fee.
So let’s work on the basis that you are a small-time eBay seller and you’re selling an item in a category like books that has a 9% final value fee. And because you are a small-time eBay seller, your PayPal transaction fee is 45 cents plus 2.
9%. Here’s how you’d work out your total fees on the item. A 20 to 25 cent insertion fee, which will be dependent on whether or not you listed a store-style listing or you listed an auction-style listing, plus 9% final value fee, which is on both the cost of the item and the shipping, plus a flat 45 cent fee for PayPal plus a 2.
9% transaction fee. Your total fees would be 11.9% plus a 65 to 70 cent flat fee. Now, let’s compare those to the prices that you would pay for your fees on Amazon. Firstly, Amazon has no insertion fee, you only pay fees on items that you successfully sell.
This makes Amazon a great place for new sellers. Now, the fees I’m about to say are relevant to you whether you are selling through Amazon FBA or whether you’re fulfilling orders yourself. It doesn’t matter whichever you’re doing, you’re going to have to be paying these selling-on-Amazon fees.
The first fee that you need to pay is the Amazon commission fee. Now, this varies greatly depending on whatever item that you’re selling. It will vary between 6 to 45%, but most items have between 12 to 15% Amazon commission fees.
This commission fee is only applied to the cost of the item, plus any gift wrapping that is selected. It is not applied to the cost of shipping. The second fee that you need to pay on Amazon is the variable closing fee.
For media items like DVDs and video games, it is a flat $1.35 fee. For other items, you pay a flat 45 cent fee plus 5 cents per pound if your customer selects domestic standard shipping. And if they select domestic expedited shipping, you will pay 65 cent flat fee plus 10 cents per pound.
Plus, there is an additional 99 cent per transaction fee on each sale that you make. Now, you don’t have to pay this if you have a Pro Merchant account, which costs $39.99 per month, so obviously, if you’re selling 40 or more items a month, this is a great deal and you need to get an Amazon Pro merchant account to save money.
Now, I can imagine that you’re looking at these fees and you’re thinking, “Well, obviously, Sarah, eBay is the cheaper option, right?” Well, that is because you are not taking into account the fact that Amazon gives you a shipping credit, which basically acts like a refund if you are a private seller and you are fulfilling orders yourself and you’re not selling through Amazon FBA.
The shipping credit that you get varies widely. For media items, you will get between $3.99 or $46.50 depending on the type of shipping that your customer selects. And for non-media items, you will get $4.
49 plus 50 cents per pound if the customer selects domestic standard shipping. And you’ll get $6.49 plus 99 cents per pound if your customer selects expedited domestic shipping. The shipping credit is awesome, but keep in mind, this means then that you don’t have control over how much you’re charging for shipping.
Amazon will charge the customer their general rates for shipping and they’ll credit that money to you. If shipping for you is cheaper than the credit, then that’s awesome and you win out hugely.
But if the shipping is more expensive, that means then that you lose money. So to work out your total fees on Amazon, you need to do this: Amazon transaction fee if you don’t have a Pro Merchant account, plus the commission fee plus the Amazon variable closing fee minus shipping credits.
So let’s work on the basis that you were selling a book on Amazon. This has a 15% Amazon commission fee plus a fixed variable closing fee and your customer selects standard domestic shipping. Your total fees on this item would be a 99 cent transaction fee plus a 15% commission fee plus a $1.
35 variable closing fee minus $3.99 as a shipping credit. So your total fees would be 15% plus $2.34 minus $3.99. And remember, if you had a Pro Merchant account, you wouldn’t be paying that transaction fee.
And now, keep in mind, if you want to sell on Amazon FBA, you won’t be entitled to that shipping credit because it is them who is shipping the item and not you. You will also have to pay additional fees.
You’re going to need to pay a Pick & Pack fee, which is based on the weight of the item that you’re selling. And certain non-media items have an order handling fee of $1. It is also important to note that if an item sells for $300 or more, you won’t have to pay any FBA-specific fees, which is nice.
So with all these fees swirling around, which is cheaper? Usually, eBay’s going to come out on top. Now, that doesn’t mean that eBay is the place that you should be selling your item. But it often comes out as the place that has cheaper fees.
But it is going to depend on item to item and category to category. These are the two big considerations that you need to take into account. Firstly, are you a new seller and you want to minimize your risk? If so, I recommend selling on Amazon because you don’t have to pay any fees unless you successfully sell an item.
Secondly, are you dropshipping? If so, you should take into consideration the weight of the item and the shipping price that the drop shipper is charging you. Sometimes as a bonus, drop shippers will offer free shipping and if you’re selling an item that is 10-plus pounds or more, the Amazon shipping credit that they give you can often make this way cheaper to sell it on Amazon rather than eBay.
Be sure to download our free e-book, Bridge the Gap to up your Mental Game