For anyone looking to create their own eBay auction site, it takes time to understand all of the ins and outs. In past sessions, we've considered mistakes sellers often make, how to get started and create a professional presence and the types of auctions retailers can utilize. eBay, like any business, has specific regulations that govern the site and various standard fees. This section is devoted to understanding some of the most important and common rules and costs.

The rules on eBay were created in order to ensure that both sellers and buyers may participate in a business environment that is pleasurable, fair and legal. These regulations are designed to lessen risks and offer equal opportunity to all sellers, support good business practices, government regulations and laws and protect intellectual property rights.

Violations of eBay policies can result in the cancellation of a merchant's listing, forfeiture of fees, lessening of privileges and suspension of one's account. There are three primary areas related to sellers:

  • Prohibited and restricted items.
  • Listing practices.
  • Completion of sale.

Items Prohibited and Restricted

There are three areas under which an item may fall-prohibited, questionable and potentially infringing upon copyright or trademark laws.

Prohibited - may not be listed for sale.

  • Illegal articles or those that promote illegal activity.
  • Auctions that offer giveaways, raffles, prizes or random drawings.
  • Services that are sexual, illegal or infringe on eBay's user policies.
  • Racially or ethnically offensive or inappropriate items.
  • Auctions not offering an item or service.

Questionable - have certain limitations.

  • If listing a reproduction of a Native American item, it must be placed in the 'Reproductions' area of the Native American section.
  • Perishable food items must include the methods and measures the seller will take to ensure that the items will be sent and delivered to the buyer safely.
  • Pre-sale items, those a seller does not possess at the time of listing are permitted on a limited basis.
  • Vehicles, vehicle equipment, cell phones and wireless contracts may be sold with certain conditions.

Potentially Infringing - anything in violation of copyright, trademark or intellectual property rights is not allowed.

  • Unauthorized copies, bootlegs or counterfeits.
  • Disclaimers of responsibility for or knowledge of the authenticity of an article.
  • Selling of trademark items that one is not authorized to sell.

Fees

There are various fees related to doing business on eBay. Insertion Fees, which are charged when you place an item online, range from 0.15 to 3.00 for eBay UK (as of May 21st 2007), and are based on the Starting or Reserve price of the item.

Final Value Fees are based on the selling price of the article. If the item is not sold no Final Value Fee is charged. An article selling from between 0.01 to 29.99 is charged 5.25% of the closing value. If the closing price is between 30.00 and 599.99, the seller is charged 5.25% of 29.99 (1.57) and an additional 3.25% of the balance of the closing price. An item selling at 600.00 or above is charged 5.25% of the first 29.99 (1.57), plus 3.25% of the 600.00 (18.52) and an additional 1.50% of the balance above 600.00.

For business and industrial capital equipment there the Insertion Fees, Reserve Fees and Final Value Fees are structured differently than normal consumer goods. eBay has additional fee categories, including Reserve Fees (fully refunded if an item is sold), Listing Upgrade Fees, eBay Picture Service Fees and Seller Tool Fees.

In determining the price of an item be sure to consider how much you will pay in fees and how these costs will affect your profit margin. For more information on fees related to eBay check out the eBay UK Fees and eBay US Fees. Additional insight into rules may be found at the eBay UK Policies Page and eBay US Policies Page.

In our sixth and final installment, we will look at how to be a smart Internet seller.