Controlling Auction Fees

Frugal tactics for cost-conscious sellers

by Dennis L. Prince
- Jun 13, 2008

"A penny saved is a penny earned." Although you might be tempted to dismiss Benjamin Franklin's frugal assertion as a quaint old adage that lacks relevance these days, the fact is that cost-conscious sellers recognize the phrase as being more relevant than ever.

In light of eBay's recent fee shifts that further siphon off sellers' profits, online merchants are again pressured to find a way to maintain—better yet, improve—their bottom-line results. And while many yearn to sell more goods at higher prices to offset rising fees, long-timers know that profits begin with the money you don't spend when running your auction business. In that vein, here are some rapid-fire tactics that will help you quickly reduce your costs while bolstering your bottom line.

Play the fee game—and win!

The fastest and easiest way to cut your item insertion fees practically in half is to judiciously choose your opening bid amount. It's no secret that listing an item on eBay with an opening bid amount of $25 will cost you a dollar. Choose an opening bid amount of $24.99—a mere penny less—and the fee is slashed to just 55 cents. The percentage of savings does fluctuate at each level of the fee structure but there are savings to be found at each one. Every tier of the opening bid amount fee schedule offers cost savings for sellers who realize the value a penny still holds today.

Avoid little things that cost big

After you've thoughtfully managed down your opening bid fee, it would seem silly to fritter that savings away on window dressing. However, some sellers do just that when they buy into many of the various eBay listing enhancements. Unless you have money to burn, be sure to cast a frugal eye upon these questionable "upgrades:"

  • Title enhancements. Whether it would be bold, highlighted or encased in a simple border, these visual adornments only add cost. They don't buy you anything you can't get for free from a well-worded title.
  • Special icons. Pictures of little gift boxes, firecrackers, or Christmas trees might make you feel good, but not for long; these cost extra and do nothing to help your best buyers find your great items.
  • Featured status. The most expensive upgrades are featured category or home page placement. Unlike in the real estate market, on eBay, location means nothing.
  • Multiple category listing. Long gone are the days when item volumes were manageable enough to browse, page by page, within your favorite category. Keyword searches are the rule of the day, and listing in two categories only doubles your insertion fees—not your final profits.

If you're going to spend money in hopes of improving your items' visibility, buy a good dictionary, and possibly a price guide or two (if your goods are the sort published in such collectibles-oriented reference volumes). Master the deft creation of item titles, complete with the best keywords, proper grading terminology and abbreviations and concise expression, so you won't feel the need to pay an additional 50 cents for an item subtitle.

Revisit your other costs

Take another look at your various operating expenses and thoughtfully investigate where you can shave off a few dollars here and there. Quit paying for packaging supplies you can get free from carriers and, more important, be sure you're packing items with the sorts of supplies that keep packages lightweight yet sturdy. Of course, be certain you keep up with the rising costs of shipping items and pass those along to the buyer, as auction protocol has historically dictated. With shipping fees always on the rise, remain diligent to properly weigh and represent shipping costs within each of your listings. Be sure the fees your buyers submit cover your shipping costs because, if not, you're undermining your own efforts.

Sell your goods selectively

Next, although you may be feverishly listing hundreds of items (or more) each week, beware of venturing into the land of diminishing returns. If much of that inventory consistently goes unsold, you may be spinning your wheels trying to move items that simply don't interest buyers, and for which you're racking up costly listing fees. Consider, instead, selectively marketing your most profitable goods, concentrating on offering the most popular, desirable and reliable items. Then, thoughtfully rotate your inventory through the auction venue to take advantage of the best listing seasons for certain items, to create anticipation for the next great piece you'll offer, and to harness every trend and fad that may boost demand for the goods you'll offer.

Don't forget to tally up your time

Successful sellers have also learned to capitalize on their most valuable and non-renewable resource: time. Take two to four weeks to carefully log your time and discover what you're really getting accomplished each day. You might learn you're surfing the 'Net too much, or are chatting the day away with friends. And if hampered by an outdated computer or an antiquated Internet access provider, it's time to upgrade, for the sake of your business' bottom line. Additionally, establish a structured approach to your day-to-day activities as follows:

  • Set firm working hours and stick to them. If you're going to "be your own boss," be sure you behave like a faithfully accountable boss every day.
  • Simplify and standardize your listings, or use listing templates. Forget developing fanciful listings for each and every item you have for sale. Instead, develop a repeatable method to easily list and re-list items in a fraction of the time it would take for onesy-twosy listings.
  • And, when away from your office, thoughtfully schedule your travels and other errands, combining as many tasks as possible into a single trip, to save time and get you back into your office to further your online business.

Include these tenets of traditional business efficiency along with the auction-specific tactics previously noted and you'll maintain a firm and financially deft stance to control auction fees.

About the Author

Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay…and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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