How to Increase Your Profit Margin on eBay

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Sellers on eBay are constantly seeking new ways to reduce expenses, especially since costs are always rising. Sellers pay eBay fees, PayPal fees, home office expenses, packaging expenses and the list goes on. Learn how to reduce your eBay expenses and increase your profit margin by paying attention to a few important details.

Things You'll Need

  • eBay account
  • Internet connection
  • Calculator
  • Time

Pay attention to eBay insertion fees and the tiered pricing. For example, pricing an item between $1 and $9.99 will cost 35 cents. Pricing an item between $10 and $24.99 will cost 55 cents. Analyze your costs here and determine if it is more cost effective to set your starting price in the lower tier to save money on your insertion fees. Assuming your item sells, pricing the item at $9.99 will cost less in fees than pricing it at $10.

Open an eBay Store so you can add items to store inventory. Running all auctions gets expensive. You can add items to store inventory for five cents per item for a 30-day listing. Basic store subscriptions start at $9.99. Although there is a fee for an eBay store, you may see substantial savings in your overall costs by using store inventory listings rather than all auction style listings.

Use caution with listing upgrades, or avoid them completely. eBay charges hefty fees for bold, highlight, enlarged photos and other upgrades. These upgrades can get expensive. Do your own research and run listings with upgrades and without and determine if the upgrades have any effect on your sales.

Relist unsold items to receive relisting credits. You can relist unsold items by selecting the "relist your item" button on the item page for the ended listing. If the relisted item sells, eBay will credit the insertion fees back to your account.

Always file unpaid item disputes. You will see these on your eBay Selling Manager if a buyer has not paid for an item within seven days. After filing, the buyer might pay. If buyers don't pay within another seven days, eBay will refund your final value fees.

File mutual withdrawals for customers who contact you and don't want to pay for their items. If a customer decides he does not want to complete the transaction, and contacts you, filing a mutual withdrawal will allow you to have your eBay final value fees refunded.

Use a free or inexpensive auction photo hosting service. Your first photo of an item on a listing is free on eBay. Each additional photo per listing is 15 cents. Using a free or inexpensive auction photo hosting service is often much cheaper than adding individual photos to each listing.

Trim your packaging. Make sure you aren't over-packaging your items. The more packaging you add, the more your item will weigh, and the more you will pay in postage. In some cases, reducing your packaging by just one ounce can mean the difference in a few dollars per package. By trimming the packaging just a bit so that the weight stays below a certain threshold, you can save on shipping the package.

Similar to the previous item, if you are shipping items USPS Priority Mail, try to use the paper Tyvek envelopes instead of a box. The boxes weigh more than the envelopes, and you will be paying more for the shipping if you use a box. Sometimes a box is unavoidable if you are shipping a fragile or breakable item, but keep this in mind as a general rule.

Use First Class shipping when an item weighs less than 14 ounces. You can purchase your own poly mailers and use First Class for these lighter items. Poly-mailing bags can be purchased for a few cents each when ordered in quantity. You won't have to spend the minimum $4.80 shipping an eight ounce item just to get the free Priority Mail supplies. Therefore, if you have charged the customer $4 shipping and the actual cost is $2, plus the 10-cent investment for the poly-mailing bag, you have still made a profit and you can keep your shipping fee reasonable. You will sell more items if you keep your shipping fair and reasonable.

Pay your eBay fees using a credit card with a cash back program. Check your credit cards to see which ones offer a cash back program. Using these types of programs can often result in between 2 percent and 5 percent credits back to your card.

Use coupons to purchase your inventory. Many drugstore and grocery store items sell well on eBay, and you can increase your profit margin by using coupons to purchase items to sell.

Tips & Warnings

  • Take some time to analyze your expenses.
  • A small leak can sink a large ship. Pay attention to the small details. Small fees add up over a period of time.
  • Experiment and see where else you can find savings.

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