hidden costs of selling on ebayThere are many costs associated with selling on eBay.  Other than the more commonly understood listing and selling fees which eBay takes, there are also some hidden costs.  Hidden costs are often expenses that are not secretly hidden but mores misunderstood or not considered.

Let’s take a look at some of these hidden costs.

Loss on the product itself

Whilst it is uncommon, there are occasions where you encounter a direct lost on the product items.  This could be either as a result of miscalculating shipping and therefore being out of pocket or even where an item goes missing in the mail.

A tip here is to offer postage with tracking and for larger, more valuable items, pay for insurance.

PayPal fees

A cost which will no doubt be completely overlooked is a PayPal fee you will pay if you have to refund a customer. Other than the standard 2.4% + 30 cent fee that PayPal charges for each transaction (you as the seller lose out here), there are other losses that are incurred if/when a refund is processed.

Regardless why the customer wants a refund (order error, item not as expected, etc) if they have paid via PayPal you will be charged a fee for issuing the refund. It is not necessarily a large amount and it won’t happen that often but it is something to be aware of.

Packaging costs

Whilst the cost of packing satchels is covered by the buyer or built into the sale price of the item, if you add any extra touches to your packages, these are an expense.  Thank you cards, wrapping paper or even clear plastic bags to ensure items are presented nicely. All extra costs that you may fail to take into account.

Time and effort

As with all online businesses, the effort and time that goes into making it work is an expense.  Chances are you don’t pay yourself a wage.  Chances are you don’t pay yourself anything. There’s a good chance any profit you receive either goes to paying the bills or sourcing new product.

Costs of running your eBay business

If you are running a sizeable business, you need to factor in storage cost (if your merchandise volume is more than your house can handle), cost of labour (either doing the work yourself or hiring someone), income tax, cost of sourcing your inventory, various office/shipping supplies, financing cost (business loan, carrying a balance on credit card), cost of professional accounting and the list goes on.  These are not necessarily hidden costs but they are essential and all factor into the viability of your eBay business long term.

Don’t let these costs put you off selling on eBay. The key is to be aware and to arm yourself with the facts.

Got a question? Let me know.