Are eBay Promoted Listings worth it for resellers?

How the cost works

You choose an ad rate, which is a percentage of the sale price. For the standard type of promoted listing, eBay typically charges the ad fee only when a buyer clicks the promoted listing and then buys. Check the terms of the ad type you use, because they can differ.

The ad fee is on top of eBay's normal fees, so it comes straight out of your profit.

A worked example

Say an item sells for $40 with free shipping and cost you $12. eBay's fee at 13.6% is $5.44 plus $0.40, which is $5.84. Shipping costs you $6.00. Profit without ads is $40.00 − $5.84 − $6.00 − $12.00 = $16.16.

Add a 5% ad rate and the ad fee is $2.00, so profit drops to $14.16. You gave up about 12% of your profit to get the sale. If the ad turns an item that would sit for months into a sale this week, that can be a good trade. If it would have sold anyway, it was an expensive one.

When ads tend to make sense

Ads are most useful on items with healthy margins, plenty of competing listings, and steady demand, where being seen is the problem. They are least useful on thin-margin items, because the ad rate can erase what is left.

• Healthy margin: you can absorb the ad rate and still hit your target profit
• Crowded search results: a small boost in placement matters
• Aging inventory: a short ad push can be cheaper than a long price cut

Set the rate from your margin, not from eBay's suggestion

Work out your profit at the price you plan to list, then decide the most of it you would give up to make a sale. That is your ceiling for the ad rate. Suggested rates are based on what other sellers pay, not on what your item cost you.

Track the result. Compare how long comparable items took to sell with and without ads, and count the ad fees in each item's profit.

Keep ad fees in the profit calculation

If ad fees are left out of your numbers, your margins will look better than they are. FlipHall includes an expected ad rate in its pricing estimates, and its profit view subtracts the ad fees eBay reports on each order.