The Economics of Selling a MacBook on Craig's List vs. Ebay

I just sold my MacBook over the web. I sold it on Craig's List. I also considered using eBay, but Craig's List turned out to be a better deal, for both buyer and seller.

The reason is that listing and selling on Craig's List is free, while selling on eBay is expensive, especially for items priced higher than $500. First, there's the listing fee of $0.20, then the Final Value fee of $0.50 + 3.25% * price. But wait, there's more: EBay all-but-requires you to use their PayPal service to settle transactions, and PayPal in turn requires you to use a "Premier" account if you receive more than $500 in eBay payments in one month, which you automatically would if the item you're selling is more than $500. Using a "Premier" account requires that you pay PayPal 2.9%+$0.30 per transaction, even for cash transactions. (The processing fee is less if you are doing a high volume of business through them.)

So the total eBay selling cost is in the range of 6.15%. That's $50 on a $800 item.

You could avoid accepting PayPal, but since accepting PayPal is the norm on eBay, it's very likely that your auction will be shunned, and you will receive a lower price.

Besides the hefty fees, using PayPal is riskier for the seller than using cash. This is because it is possible for a disgruntled buyer to reverse the transaction. (Of course this same ability is a plus for the buyer, as is the ability to use credit cards.)

Even without using eBay to sell the product, it makes sense to use eBay as a price setter. eBay makes this easy to do by reporting the final price for closed auctions that you are "watching". Since auctions last between 3 and 10 days, and an auction must be active in order for you to watch it, you will need at least a week to track enough auctions of similar items to make a fairly accurate estimate of the market price.

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Albern UK said…
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