With the automobile aftermarket industry prospering, many are considering opening an online auto parts business. There is no single best channel to achieve this – it all depends on your business goals. The two main paths are designing and developing your eCommerce website or opting for an already established product marketplace such as Amazon or eBay. Once business picks up, some retailers choose to go down both of these paths at the same time.
Opening a store on an existing eCommerce platform comes with the benefit of an enormous customer base. The eBay marketplace, in particular, has over 187 million active buyers. Not all of them shop for car parts, but even if only 1% does, that is a vast potential customer pool to tap into!
However, selling on eBay isn’t free. The platform charges its vendors specific fees that you will have to consider when deciding on your business model.
eBay Fee Types
There are three primary types of fees on eBay:
- Insertion fees – In general (with some exceptions), eBay members can create 250 listings for free every month. After that, they are charged with an insertion fee (or listing fee) that varies according to each selling category.
- Final value fees (FVF) – FVF are also known as selling fees. When you sell an item on eBay, you are charged a certain percentage of the total sale price. Again, this percentage and transaction fee amount depends on the selling category type.
- Listing upgrades – Aside from the above-mentioned ‘regular’ fees, there are also optional ones you can take advantage of. For an extra cost, you can purchase upgrades such as listing on international eBay sites, putting up a single listing in multiple categories and uploading more than 12 photos per listing.
Keep in mind that you might also be charged by the payment system you’re using, such as PayPal. These fees are independent of eBay. When it comes to online transactions and trade, the eCommerce solution is not the only organization that gets a cut of your earnings. If you’re using PayPal or a similar system, you should take a look at their fees as well.
eBay Store Subscription
Right off the bat – an eBay Store subscription is not mandatory for selling on eBay. Plenty of people sell products just fine without this option.
However, if you are serious about your automotive parts business and would like to enjoy some benefits, then opening an eBay store is not a bad idea. It can help you:
- Save money on insertion fees
- Gain access to Promoted Listings and Promotions Manager
- Brand your online business (set up a store homepage, customize the store web address, etc.), and more
The Starter Store subscription is $4.95 per month. Depending on the size of your business, there are other options with more free fixed-price and auction listings that can go up to $2,999.95 per month.
If you upgrade to an eBay store, the platform will charge you this subscription on the first of every month.
eBay Motors Fees
eBay Motors is a section of eBay dedicated entirely to different types of vehicles and their components or equipment related to them. It is one of the largest auto parts markets you can find online. There are various categories in this automotive segment, but most of your vehicle part listings will fall into these two:
- Parts & Accessories
- Automotive Tools & Supplies
Fortunately, compared to some other eBay categories, these aren’t too expensive.
The insertion fee for these two eBay Motor sections is $0.35 for every listing after the 250th one in a month. This means that the first 250 listings per month are free.
FVF is different depending on the value of each item. If all items are priced at less than $7,500, the total sale fee is 12.55%. If a portion of the online parts sale is over $7,500, the fee for this portion is 2.35%. An additional $0.30 is charged per order on top of these percentages.
These fees won’t be applied at the time the online sale takes place. Instead, you will be charged every month for them.
Vehicles vs. Parts Fees
Some people get confused when looking at eBay Motors’ fees and think they need to pay a fee of $60 for selling a $55 part. This is incorrect. eBay Motors has an entirely different set of fees for selling vehicles on the platform. If you’re not selling entire vehicles but only parts and accessories as described above, then the previously mentioned fees apply to you. When reading their terms of service, make sure to check whether you’re reading about vehicles or vehicle parts.
Additional Final Value Fees
Aside from the charges already listed above, there are a few other types of FVF that eBay imposes on its vendors.
- Buying or selling outside of eBay: Offering or referencing your contact information or asking a potential buyer for their contact details for buying or selling outside of eBay will cost you additional FVF. If you violate this marketplace rule, you will be charged with a final value fee on the total amount of sale even if the item you’ve put up (and discussed selling outside of eBay) doesn’t sell.
- Not meeting performance standards: eBay has specific seller performance standards they expect of their online sellers. These include meeting the minimum seller performance for the United States by the 20th of every month and not having a high rate of ‘item not as described’ return requests. Providing a great customer experience is encouraged.
If these expectations are not fulfilled, you will be charged additional FVF. This also means that if you open an eBay Store but don’t sell any items, you will incur costs.
- Dispute fee: Each dispute where you are found responsible for a disputed amount has a fee of $20.00, excluding sales tax.
- International fee: Lastly, you might be charged with an international shipping fee. If your address is registered in the US, the international fee applies if the delivery address is outside the US or the buyer’s registered address is outside the US, even if the item is shipped within the country. The international shipping charge is 1.65% of the total amount of auto parts sale. You can choose whether or not you want to offer a global shipping option for your automotive customers.
Keep in mind that FVF in most categories is capped – their maximum amount depends on whether you have a Store subscription and in which category you’re selling. However, if the automotive seller is buying or selling outside of eBay and not meeting their performance expectations the fees applied have no maximum cap. Essentially, eBay can charge whatever fine they think is appropriate for violating their terms and conditions.
Every month, you will receive a comprehensive invoice from eBay. It will display the payments you’ve made, any discounts, selling fees, credits, or refunds applied to your account, and recoupment charges.
Ensure that you review this invoice every month to know what has been deducted from your earnings and why. If you think fees have been unfairly applied, you should bring them up with eBay sooner rather than later.
Keep in mind that your total account balance may be off by a few cents compared to the number you get when manually calculating your invoice line items. This happens because eBay tends to round off FVF, resulting in a few cents more or less every once in a while.
Unfortunately, there is no online marketplace where you can start your business for free. Amazon, eBay, Walmart, and similar platforms all charge various fees for listings, transactions, and sales.
The good news is that eBay is not the most expensive platform. You can choose whether or not you subscribe to an eBay Store – one isn’t required for selling on eBay. However, you will get quite a few benefits from opening an eBay Store, so you should consider the monthly subscription if you want to grow your business.
Aside from this monthly cost, you will also be charged an insertion fee for every listing you put up (a certain number of listings is free under the eBay Store plans) and a final value fee for every sale you make. The FVF depends on the listing category. For eBay Motors Parts & Accessories and Automobile Tools & Supplies categories, the FVF is 12.55%.
There are also additional fees to take into account. These apply if you violate eBay’s terms and conditions, if you allow international sales of your parts, and if you are responsible for a dispute.
If you have any questions about eBay’s fees and how you can easily navigate them, please contact MyFitment. We will be glad to help your eBay vehicle parts store thrive!