Why Does eBay Charge an Insertion Fee?

Distinguish between insertion and final value fees

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eBay charges sellers two basic types of fees to sell items on the auction website: insertion fees and final value fees. For each item sold on eBay, a seller is billed both types of fees. That means there's no way to get around these fees.

With the following review, learn what these fees are for and what you should do if you're unhappy paying them.

What Is the Definition of an Insertion Fee?

Also known as a listing fee, an insertion fee is the "upfront" fee that eBay charges a seller to place an item for sale on eBay.

The listing fee varies according to a number of factors. These factors include the type of listing in question as well as the starting, buy it now and reserve prices set by the seller.

What's more, the listing duration and the promotional and other features (also known as listing upgrades) added to the listing by the seller contribute to the insertion fees. The number of categories in which the item was listed does as well.

How an Insertion Fee Compares to a Final Value Fee

eBay doesn't just charge sellers to list items but also fees when an item sells. This is what's known as a final value fee. According to eBay: "Final value fees are calculated based on the total amount of the sale and are charged per item. The total amount of the sale is the final price of the item, shipping charges, and any other amounts you may charge the buyer. Sales tax is not included."

How to Lower Fees

New sellers often overuse features and set starting bid prices that are higher than they need to be, resulting in higher than necessary fees that can, with experience, be reduced and/or controlled.

Refer to eBay's current fee calculation table for details on how listing fees are currently calculated.

What to Do if You're Still Unhappy With an Insertion Fee

If you still think eBay's insertion and final value fees are simply too high and you've done all you can to lower them, you might want to check out sites similar to eBay to give you a better idea of how fair these costs are.

If you primarily sell clothes, shoes and accessories on eBay, for example, check out sites such as Tradesy or Poshmark to see if they charge comparable fees for selling goods there.

If their fees are equally as high or higher, you might feel more at peace with paying the fees that eBay imposes on sellers. If their fees are lower, however, you may decide to do away with your eBay account and to sell on competing sites instead.

If you think all such websites charge sellers too many fees, your best bet might be to set up your own site for selling or to sell your wares in person--at thrift stores and flea markets--rather than online. Don't forget, however, that even thrift stores and flea markets will take a cut of your profits as well in most cases.

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