Fee Fi Formula Fum

[systemagic]

Unlike many of you I’m continually having to source new product and use MS Excel to calculate the possibilities. Tonight I finally added a formula to project eBay/PayPal fee costs and thought that I’d share it here. This is for sales over $25 and under $1K each in value. In this case the starting bid and final value (Q17) are the same ($60).

Written in prose my average listing fees are ((Insertion + Gallery +.Buy It Now)*2.5) + Final Value + PayPal or…
=((2.4+0.25+0.05)*2.5)+((Q17-25)*2.74)/100 +(((Q17*2.9)/100)+0.55)

((2.4+.25+.05)*2.5) = (Insertion + Gallery + Buy It Now) x 40% Sell through Rate
((Q17-25)*2.74)/100 = Final Value
(((Q17*2.9)/100)+.55) = PayPal

Ebay, like me, on average, has a 40% sell through rate so that explains the 2.5 multiplier of Insertion, Gallery, and Buy It Now fees. In theory one relisting is free if the item sells on the second attempt but there’s no way that I can think of to nail this down more accurately. If it fails to sell on the second attempt then, I believe, these fees are paid a third time returning the average to around 2.5.

The insertion fee at the front must be entered manually, in accordance with the indexed scale, for each entry. Otherwise this formula can be copied from cell to cell for item listings (>$25 <$1000)

Turbo Lister’s Fee Calculator usually estimates about $2.00 for an average insertion fee giving, perhaps, the impression that listing fees might total something a little greater than this. So far this formula discloses, however, that I’m paying pretty close to 20% of gross revenues to eBay/PayPal. What do you think? Is this a reasonable percentage to be paying for the venue? I know that many salespeople make 20% commission but we’re doing all the sales work here. I wonder what percentage of gross revenues a retailer pays in rent?

[mrarmbo]

hello...first of all thank you very much for the formula, i thought i was the only one that thought that way, lol...i have a similiar formula for 1.00-10.00 items as well as I have read many power seller estimates and 20 percent pretty much sums it all up every which way i slice up this problem...do other businesses pay 20 percent overhead?...some more some less, but i figure we're hitched up to the worlds most powerful auction site so 20 points isn't so bad as long as the audience is brought in daily to justify and as long as the money flows to pay the bills...personally i am more than grateful as i went from working for the man to being the man...good luck richard

[systemagic]

Just when I thought that I could replace this formula with a simple 20% calculation along come the new fee increases. I haven't run the increases through the formula yet but I'll wager that this escalates eBay's overall take to closer to 25% of gross revenues. Too had Yahoo auctions aren't available to Canadian sellers. What other auction sites are available?

[shoplineca]

bidville

[dragonimpact]

ioffer, ubid, amazon and yahoo.ca (used to sell old comic books on yahoo.ca and they sold well there).

[deltone]

wagglepop

[vesivus]

Wagglepop Wagglepop Wagglepop


www.wagglepop.com

[systemagic]

It seems that there was an error in the Final Value Fee segment of the old formula above. It should have been:

((2.4+0.25+0.05)*2.5)+(1.84+(((Q24-25)*2.74)/100))+(((Q24*2.9)/100)+0.55)

The formula with the new fee increases for this $60 item is:

((2.4+0.45+0.3)*2.5)+(2.8+(((q24-35)*5)/100))+(((q24*2.9)/100)+0.55)

The old formula still amounts to exactly 20% of the gross value. The new formula amounts to 24% of gross value. It appears that this is the likely difference in eBay's new take (including the PayPal influence of course). In the case of this particular item eBay is making only 70% of what I'm making. I've recently been given a distributorship in this item. Anyone else would make 15% less.

[systemagic]

The current eBay/Paypal auction take is about 20% of gross sales and after the increase it will be about 24%. The US isn't seeing as steep a rise in auction fees as Canada - just in stores. Without BIN eBay's auction take is reduced to 22%. Same with removing just Gallery - 22%. Removing both Gallery and BIN results in eBay's take being about 21%. There's no way to opt out of options enough to reduce the fee rate to the current status quo of 20%.

[systemagic]

Well, the formula seems to be more crunchy than anyone wants to digest but I'll make just one more post. I have to correct my correction. I erroneously applied the store final value fees in place of the auction final value fees in the correction. I was right the first time. Here's the correct (I hope) new formula:

((2.4+0.45+0.3)*2.5)+(((q27-35)*5)/100)+(((q27*2.9)/100)+0.55)

Here's what I'm getting now with this formula.

Ebay's auction take before increase = 17%
Ebay's auction take after increase = 19%
Their take without BIN = 18%
Their take without Gallery = 17%
Their take without both = 16%

Seems rather less severe than the previous estimates. Eliminating Gallery will keep their take the same as now.

Hope I got it right this time.

Looks like eliminating the store and gallery is the way I'll go.