Listing fees on eBay are a significant expense. Upgrading to a store can help lower those expense. The easiest way is to look at the model from a listing fee standpoint to see when you should acquire a store or upgrade to a store. In order to do this you need to know the number of listings that operate as a breakeven point. Right now eBay has three store choices.
Basic Store ($19.95 Monthly/$15.95 Year Subscription)
Premium Store ($59.95 Monthly/$49.95 Year Subscription)
Anchor Store ($199.95 Monthly/$179.95 Year Subscription)
We assume that we are using regular listings, not the discounted listings such as the ones for video games or books. You can still do this breakeven but the input numbers will be different.
BREAK EVEN FOR UPGRADING TO A BASIC STORE
Monthly: 50 Free Listings + ($.30 Listing Fee x 67 Listings) = $20.10 (117 Listings)
Yearly: 50 Free Listings + ($.30 Listing Fee x 54 Listings) = $16.20 (104 Listings)
BREAK EVEN FOR UPGRADING FROM A BASIC STORE TO A PREMIUM STORE
Monthly: 150 Free Basic Listings + ($.20 Basic Listing Fee x 200 Listings) = $59.95 (350 Listings)
Yearly: 150 Free Basic Listings + ($.20 Basic Listing Fee x 170 Listings) = $49.95 (320 Listings)
BREAK EVEN FOR UPGRADING FROM A PREMIUM STORE TO AN ANCHOR STORE
Monthly: 500 Premium Listings + ($.10 Premium Listing Fee x 1400 Listings) = $199.95 (1900 Listings)
Yearly: 500 Premium Listings + ($.10 Premium Listing Fee x 1300 Listings) = $179.95 (1800 Listings)
If your just considering upgrading to a basic store you should also try and estimate the fee reduction that the store gives you. When you have a store you are charged a 9% Final Value Fee instead of 10%. I’m not even sure if I can make the proper equation to do this but the break even to upgrade to a basic store (monthly) is 117 listings. Let’s say, for example that your average sale is around $25.00 and you have a 20% sell through every month (the number of listings that sell in a single month). Your reduction on fees for 100 listings will be (20 Listings x $25.00) x 1% = $5.00. Your listing fees will be $15.00 but the upgrade would have saved you $5.00 which in this situation is an opportunity cost which should be added to your fees. In this situation, your actual break even is 100 listings, not 117. Remembers this isn’t as cut an dry as just looking at it from a listing fee standpoint as you have to make some predictions and estimates.