When to use Buy It Now and when to Auction - the break even point for final value fees.
frankhardy
Posts: 8,143 ✭✭✭✭✭
I have used auctions almost exclusively for years. Recently, I have had a few items of the more expensive variety. I chose to use Buy It Now / Best Offers. I decided yesterday to try to find out what the break even point for Ebay final value fees are since the fees are different for auctions vs BINs.
Some of you may know this, but some may not. I thought I would try to be helpful and also get opinions on this matter. I figured that the "break even" point for final value fees is $100.
Correct me if I'm wrong. The way I read it, auction final value fees are 9% across the board with a (maximum charge of $50). BIN final value fees are a little different. It is 12% of the first $50 ($6) and 6% of the rest of the amount from $50.01 to $1,000. In the auction format, take 9% of $100 and you have $9.00. In the BIN format, take 12% of the first $50 which is $6, then take 6% of the next $50 and you have $3. Add $6 + $3 and you get $9.00. So the even point is $100.
Now, one thing to consider is that on a high dollar item, you set the price, but it may sit there forever it is not priced right or there is no interest in the item. An auction will most likely sell, but it may go lower than what you want. I said that to say that this is not cut and dry issue. You still have a decision to make. I just thought I would share what I discovered about the fees.
If you already knew this or it has already been discussed, then I'm sorry I wasted your time. However, I found it helpful.
Some of you may know this, but some may not. I thought I would try to be helpful and also get opinions on this matter. I figured that the "break even" point for final value fees is $100.
Correct me if I'm wrong. The way I read it, auction final value fees are 9% across the board with a (maximum charge of $50). BIN final value fees are a little different. It is 12% of the first $50 ($6) and 6% of the rest of the amount from $50.01 to $1,000. In the auction format, take 9% of $100 and you have $9.00. In the BIN format, take 12% of the first $50 which is $6, then take 6% of the next $50 and you have $3. Add $6 + $3 and you get $9.00. So the even point is $100.
Now, one thing to consider is that on a high dollar item, you set the price, but it may sit there forever it is not priced right or there is no interest in the item. An auction will most likely sell, but it may go lower than what you want. I said that to say that this is not cut and dry issue. You still have a decision to make. I just thought I would share what I discovered about the fees.
If you already knew this or it has already been discussed, then I'm sorry I wasted your time. However, I found it helpful.
Shane
0
Comments
Also consider the number of views you're going to get on BIN vs. Auction. Many buyers (and I often do this myself) set their searches only for auctions, because 98% BIN listings are at least 30% overpriced, many much more so. I generally only look at BINs for my personal collection when I need something very specific, and never even take the time when I'm looking for inventory. But, if you would otherwise be setting a BIN at a reasonable price, you might consider starting it off as an auction at just a few percent more (to cover the difference in fees) and seeing if you get any takers at that price as an auction. You'll probably get 3-4 times as many views, and if it's only a few percent more expensive than you would have set it as a BIN, you might get a bite and be able to move the item a lot faster than you could have as a BIN.
For instance, I have done really well lately with 1954 Dan Dees and very rare 1988-89 Nova and Nova Promos with BIN/BO.
Good post.
Shane
Simsbury Taverneers
My PSA Sets
<< <i>So, for items selling for under $100, use auction format to minimize fees. Above $100, use BIN/BO. However, the cap on auction fees at $50 means for items above $780 you should go back to the auction format. At this point the BIN/BO fees start to exceed auction fees again. Unless those fees are capped as well in which case it makes no difference. >>
Isn't that $555.56 instead of $780? If you take the $50 cap and divided by 9%, you get $555.56. Am I right on that?
I don't think BIN final value fees are capped. Only auction final value fees are capped. At least, that's the way I read it.
I didn't think to figure the high end of the equation. I'm glad you brought that up. I would have figured it to be much higher than that. In that situation, you just set your BIN high enough to cover the extra final value fees - that is if you must get a certain price out of your item. If you just want to move it, then the auction is the way to go.
Shane
<< <i>Anything that sells for more than $555.50 is advantageous to sell at auction. The fee is capped at $50 and that is the price point. I can sell a vintage set for 3 or 4 thousand dollars and still only pay $50 in final value fee. >>
From a fees standpoint - yes. The only caveat is that an auction might not bring what you want it to bring, therefore, if you don't have to move it quickly, the best option COULD BE to use BIN and set it a little high to cover those extra fees. However, if there is enough of a track record in the completed auctions and you get a good feel for what an auction might bring, then it COULD BE best to auction it. Again, from a fees standpoint, you are correct.
Shane
<< <i>
<< <i>So, for items selling for under $100, use auction format to minimize fees. Above $100, use BIN/BO. However, the cap on auction fees at $50 means for items above $780 you should go back to the auction format. At this point the BIN/BO fees start to exceed auction fees again. Unless those fees are capped as well in which case it makes no difference. >>
Isn't that $555.56 instead of $780? If you take the $50 cap and divided by 9%, you get $555.56. Am I right on that?
I don't think BIN final value fees are capped. Only auction final value fees are capped. At least, that's the way I read it.
I didn't think to figure the high end of the equation. I'm glad you brought that up. I would have figured it to be much higher than that. In that situation, you just set your BIN high enough to cover the extra final value fees - that is if you must get a certain price out of your item. If you just want to move it, then the auction is the way to go. >>
Not exactly. Yes, you max out the fees in auction format at the $555.56 price but at that price it is cheaper to go with the BIN/BO format. The fees in a BIN/BO format would be only $36.33. Once you reach the $783.33 range the fees for the BIN/BO option start to exceed $50.
Simsbury Taverneers
My PSA Sets
<< <i>
<< <i>
<< <i>So, for items selling for under $100, use auction format to minimize fees. Above $100, use BIN/BO. However, the cap on auction fees at $50 means for items above $780 you should go back to the auction format. At this point the BIN/BO fees start to exceed auction fees again. Unless those fees are capped as well in which case it makes no difference. >>
Isn't that $555.56 instead of $780? If you take the $50 cap and divided by 9%, you get $555.56. Am I right on that?
I don't think BIN final value fees are capped. Only auction final value fees are capped. At least, that's the way I read it.
I didn't think to figure the high end of the equation. I'm glad you brought that up. I would have figured it to be much higher than that. In that situation, you just set your BIN high enough to cover the extra final value fees - that is if you must get a certain price out of your item. If you just want to move it, then the auction is the way to go. >>
Not exactly. Yes, you max out the fees in auction format at the $555.56 price but at that price it is cheaper to go with the BIN/BO format. The fees in a BIN/BO format would be only $36.33. Once you reach the $783.33 range the fees for the BIN/BO option start to exceed $50. >>
And that's why you get paid the big bucks! That makes sense now.
Shane
<< <i>If you market the product correctly and build the correct following through feedback, customer relations, and trust from the buyer with respect to your seller integrity and grading, it is a no brainer to sell high end vintage cards and sets at auction.[/q
100% agree!
You can list a set for $3000 BIN even though it may worth $4000 but buyers will assume there is only $3000 worth of cards in the set (actually the may assume less) while an auction with many pics will get you that $4000+
It may seem like a risk to some but if you do it right there are no risks at all.
"Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind." Dr. Seuss
<< <i>You can list a set for $3000 BIN even though it may worth $4000 but buyers will assume there is only $3000 worth of cards in the set (actually the may assume less) while an auction with many pics will get you that $4000+
It may seem like a risk to some but if you do it right there are no risks at all. >>
I agree about doing it the right way. However, there are risks. I love auctions. Before my success this month with a few BIN's, I was all for auctions. Now, I am a little less sure. In your scenario of a set being worth $4000, in that case I would start a BIN of $4200 or best offer (not $3000). If I got my price, then great. If it sat there for a little while with no action, then I would probably auction it.
Back in 2007, I auctioned a beautiful 1961 Topps set. I had several PSA 7's and a few 8's. It sold for $4100+ (I think). I think the key to that auction was nice, clean, crisp scans. I scanned about 30+ cards, plus took a nice picture of the whole set. Then, in the description, I said that I had graded then entire set and broke down the grades (example - so many NMMT; so many NM; so many EXMT, etc).
Shane
Lou Gehrig Master Set
Non-Registry Collection
Game Used Cards Collection
<< <i>
<< <i>You can list a set for $3000 BIN even though it may worth $4000 but buyers will assume there is only $3000 worth of cards in the set (actually the may assume less) while an auction with many pics will get you that $4000+
It may seem like a risk to some but if you do it right there are no risks at all. >>
I agree about doing it the right way. However, there are risks. I love auctions. Before my success this month with a few BIN's, I was all for auctions. Now, I am a little less sure. In your scenario of a set being worth $4000, in that case I would start a BIN of $4200 or best offer (not $3000). If I got my price, then great. If it sat there for a little while with no action, then I would probably auction it.
Back in 2007, I auctioned a beautiful 1961 Topps set. I had several PSA 7's and a few 8's. It sold for $4100+ (I think). I think the key to that auction was nice, clean, crisp scans. I scanned about 30+ cards, plus took a nice picture of the whole set. Then, in the description, I said that I had graded then entire set and broke down the grades (example - so many NMMT; so many NM; so many EXMT, etc). >>
My point was not to set the BIN at $3000 but even if you did ($2000 for that matter) you would have much less interest then in an auction. If I put up the same set (valued at $4000) for a .99 auction and for a $2000 BIN the auction would end at $4000 and the BIN will sit for an extra 2-3 weeks. BINs are a horrible idea for a mid or high grade set, show picture and accurately describe the cards and you will get a fair price.
<< <i>Any idea how the strategy would work for auctions if you set a high starting price? For example, per the last post, you set the start price at $3000. This is sort of relevant with ebay having the current special where there is no insertion fees regardless of the starting price of the auction. >>
I think that this is universally a bad idea. No risk but no sale.
"Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind." Dr. Seuss
Auctions are 8.75% of the first $50 and then 4% of the remaining final sale up to $1000, and 2% for everything exceeding $1000 if you have a store subscription (even the $15 variety). There is no $50 cap though. FVF equal $50 when the sale reaches $1381.25 under this system.
There are sellers who have multiple id's (some with permanent stores and some without) to take advantage of the two FVF schemes.
Collecting 1970s Topps baseball wax, rack and cello packs, as well as PCGS graded Half Cents, Large Cents, Two Cent pieces and Three Cent Silver pieces.
<< <i>I thought there was a $50 cap in order. Can someone verify this? I think eBay started this in late '09 or early '10. >>
yes, there is a $50 cap.
Final value fees for auction-style format listings
Auction-style format listings
Final sale price
Final value fee
Item not sold
No fee
$0.01 - $50.00
9.0% of sale price (maximum charge $50.00)
$50.01 - $1,000.00
$1,000.01 or more
<< <i>I thought there was a $50 cap in order. Can someone verify this? I think eBay started this in late '09 or early '10. >>
That's only if you don't have a store membership.
Standard Fees—Auction-style Listings
Starting Price Insertion Fees
$0.01–$0.99 FREE!*
$1.00–$9.99 $0.25
$10.00–$24.99 $0.50
$25.00–$49.99 $0.75
$50.00–$199.99 $1.00
$200+ $2.00
Selling Price Final Value Fee
Item not sold No Fee
$0.01 and above 9% ($50 cap)
*Up to 100 each month
Store Subscriber Fees—Auction-style Listings
Starting Price Insertion Fees
$0.01–$0.99 $0.10
$1.00–$9.99 $0.25
$10.00–$24.99 $0.50
$25.00–$49.99 $0.75
$50.00–$199.99 $1.00
$200+ $2.00
Selling Price Final Value Fees
Item not sold No fee
$0.01–$50.00 8.75% of the closing value
$50.01–$1,000.00 8.75% of the initial $50.00, plus 4.0% of the remaining closing value balance ($50.01–$1,000.00)
Equal to or over $1,000.01 8.75% of the initial $50.00, plus 4.0%
of the next $50.01–$1,000.00, plus 2.0% of the remaining closing value balance ($1,000.01–closing value)
Pictures (up to 12) FREE