It is very easy for a new seller to get caught up in the excitement of selling and not pay attention to the costs involved in selling. Before deciding whether to sell an item on eBay, and what to sell it for (i.e. reserve or Dutch auction price), you need to understand all the costs involved.

First of all there is the “listing fee.” There is also a “selling fee” that will be set by what price the item actually sells for. There may be a fee to process a Billpoint, PayPal or credit card sale. If you use an auction management service such as Andale or AuctionWorks then you have their fees. Don’t forget shipping, and the cost of the shipping materials.

If you are selling items you purchased wholesale, were there shipping charges to get it to you? Did you pay sales tax on the item?

Many businesses fail because they are either under financed, or because they do not understand their costs. A program such as Quicken’s “Quick Books” could be one of your best investments. Quick Books will allow you to track every expense, down to the penny, and allocate the costs to different categories so you will fully understand where every dollar is going and if it was well spent.