It seems like a simple enough concept that Profit = Revenue – Expenses, but calculating eBay and PayPal fees for each item can be a hassle. This Guide will show the minimum price you can set for a Fixed Price listing and still break even.
We all know that both variable costs and fixed costs are included in an item’s expenses. The baseline values used in this example are listed below.
- eBay Fixed Price Listing Insertion Fee: $0.50
This fee is for each fixed price listing with a price of $0.99 or more. It is a cost charged even if the item does not sell.
- eBay Final Value Fee:
This fee is a percentage of the sold price of an item. The sold price includes everything the buyer pays including shipping & handling. The percentage varies based on the item category and the sold price. It is a cost charged only if the item sells.
- Electronics: 7%
- Clothing, Shoes, and Accessories: 10%
- Books, DVDs & Movies, Music, and Video Games: 13%
- All Other Categories: 11%
- PayPal Fee: 2.9% of sold price of the item plus $0.30 per transaction.
This fee is charged when PayPal a buyer checks out using PayPal. The sold price includes everything the buyer pays including shipping & handling. Also, please note that the $0.30 fee is per transaction and not per item; multiple items can be included in one transaction.
- Merchandise: $0
This cost is the amount you paid for the item. To keep this example simple, inventory will be merchandise you already have at home. The baseline amount of $0 does not mean your item has no value or that it was free, but we have to start somewhere.
- Shipping & Handling:
Many different factors can affect shipping, especially carrier selected and location of the buyer. To keep this example simple, we are using the USPS rates below.
- USPS Priority Mail (unless otherwise noted): $5.90
Flat Rate Envelope ($5.15) + Delivery Confirmation ($0.75)
- USPS Media Mail (where noted): $3.32
Up to 1 lb. Package ($2.47) + Delivery Confirmation ($0.85)
The following formula was used to determine the break-even price.
Profit = Revenue – Expenses
The prices below are the minimum sold price needed to break even or make a buck. The sold price includes everything the buyer pays including shipping & handling.
$7.44 to break even
$8.55 to make $1
- Clothing, Shoes, and Accessories
$7.70 to break even
$8.84 to make $1
- Books, DVDs & Movies, Music, and Video Games
$7.97 to break even
$9.16 to make $1
$4.90 to break even (shipped Media Rate)
$6.09 to make $1 (shipped Media Rate)
- All Other Categories
$7.79 to break even
$8.94 to make $1
While I realize that all sellers are here to make money and not just break even, knowing the break-even point of your product helps make pricing for profit easier. This guide is intended as a quick reference to help get you started. The rates used in the guide were current as of 09/20/12.
That’s all for now!
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