Use international money transfers to maximise your profits when you sell items overseas on eBay.
Whether you’re an ecommerce retailer or just selling some of your unwanted items online to make some extra cash, it’s important that you advertise your products to as wide an audience as possible. That often means not only selling products in Australia, but advertising them to overseas customers as well.
One of the best ways to do this is through eBay, the world’s biggest online auction website. With millions of customers each month from all around the globe, eBay can help you access a significantly larger customer base than you can find in Australia alone.
Let’s take a look at how to sell items overseas on eBay, and how you can use international money transfers to help make the process as profitable as possible.
Looking to sell an item on eBay? Compare your money transfer options first
Where does eBay operate?
Looking to expand your ecommerce business overseas or just advertise your products to a wider audience? The good news is that eBay operates websites in a long list of countries other than Australia:
- Czech Republic
- The Netherlands
However, before you start selling products to any of these countries, do some research to find out if this is a financially viable option for you. Each country has its own restrictions on the importation of goods and what can be legally listed for sale. You’ll also need to make sure any products you ship overseas comply with Australian export laws, as well as import/export tariffs and other taxes that may apply.
Finally, remember that customs fees will apply, so you’ll need to decide who will cover these fees – the buyer will be responsible for customs charges in most cases, but you will need to inform them of this before they make the purchase. Take a look at eBay’s international trading policy for more information on how to sell items overseas.
It’s also a good idea to research local markets to get an idea of how much demand there is for the products you want to sell. This will also help you form a clearer picture of how to price your products to attract the right buyers.
How to list items on overseas eBay websites
Before you can sell anything on an international eBay website, you must:
- Have an eBay account in good standing. If you’ve got too much negative feedback or your account is under investigation for dodgy trading, you won’t qualify
- Have a PayPal account and be PayPal Verified
- Have earned at least 10 Feedback Points as a seller
- Have made your first successful sale more than three months ago
- Meet the selling requirements of the individual eBay websites where you want your listings to appear. This may require a little research in some circumstances to make sure you’re not breaching any guidelines or regulations
There are two ways you can list an item for sale on eBay’s international websites:
- List it on eBay’s international website. When you list a product in English on eBay’s international website, select the “international site visibility listing” option. This is the ideal option if you only want to sell to English-speaking countries, as it only requires you to enter one listing and also means you will pay lower fees. There are additional requirements that need to be met, including where you can offer shipping to and listing PayPal as a payment method.
- List the item individually on different websites. This option is necessary if you want to list your product on sites in languages other than English. It can be a time-consuming process but does allow you to tailor your listing to individual markets.
International selling fees
You will also need to consider the cost of listing and selling your items on eBay. The following fees apply and are listed in US dollars:
- Insertion fee. $0.30 per item, but the first 50 items you list each month do not incur this fee.
- Final value fee. This fee is paid when the item sells and is 10% of the sale price (including shipping).
- International listing fee. If you select international listing visibility, the following fee structure applies:
Exchange rates and how to get the best deal
If everything goes to plan, you’ll soon be receiving bids for your products from buyers all over the world and will hopefully increase your online selling profits. However, where some sellers lose out is when they transfer the payment they receive in a foreign currency back into Australian dollars.
eBay’s payment provider of choice is PayPal. We’ve previously written an in-depth review of PayPal’s international money transfer service but, to summarise, PayPal’s exchange rates and high fees mean it is usually one of the more expensive options when you need to send money overseas. This can have a huge effect on your bottom line.
To make your overseas eBay sales as profitable as possible, receive payments in each eBay market’s local currency – euros in the Eurozone, US dollars in the USA, pounds sterling in the UK etc. In many cases you will need to open an international bank account in a country to hold your payments, so research a range of options before choosing an account. Once you have an account in the local currency, you can then pick and choose the best times to transfer money back to Australia based on fluctuations in exchange rates.
You can also find a much more cost-effective transfer method than sending an international transfer direct from your overseas bank account to your Australian bank account, not to mention a cheaper option than using PayPal.
Online international money transfer providers such as OFX, WorldFirst and Currency Online specialise in moving funds across international borders. Because they’re foreign exchange specialists trading large volumes of currency, they can offer superior exchange rates to PayPal and the banks. They also tend to charge much more reasonable transfer fees, and will sometimes waive their fees altogether on large transfers.
To give you a clearer idea of just how much money you could save by using an international money transfer to send your eBay profits back to Australia, let’s take a look at a case study.
PayPal vs international money transfer
Ben sells a range of essential oils online to eBay customers in the UK. He receives payment for his sales in pounds sterling and deposits his profits into an account with a leading UK bank.
After accumulating a balance of £1,000, Ben decides the time is right to transfer his earnings back to Australia. He gets quotes from PayPal, his bank and an online money transfer provider to see which one offers the cheapest transfer solution. The results of his quote comparison are shown in the table below.
|PayPal||Bank transfer||Online money transfer provider|
|Exchange rate||1 GBP = 1.5382 AUD||1 GBP = 1.5594 AUD||1 GBP = 1.6003 AUD|
|Processing time||2-5 days||1-4 days||1-2 days|
|Amount received (in AUD)||$1,538.20||$1,559.40||$1,600.30|
As you can see, the online money transfer provider easily offers the highest exchange rate of the three options, allowing Ben to send $40 extra when compared to a bank and more than $60 extra when compared with PayPal. It also offers the lowest transfer fee of all three options, allowing Ben to save as much as £17 on transaction charges.
How to choose a money transfer provider
Before you choose a money transfer service to help you transfer money to Australia from overseas, compare a range of providers across the following categories:
- Exchange rates. The exchange rate you receive has a huge bearing on the overall affordability of your transaction. Shop around to find the provider that regularly offers the best AUD exchange rates from the overseas countries where you receive eBay payments.
- Transfer fees. The other major cost to consider is the fee that will apply to your transfer. Compare the fees charged by different providers in relation to the exchange rates they offer, and remember that some companies waive their fees on large transfers.
- Transfer options. You may also wish to look for a company that offers flexible transfer options to help you save time and money. For example, you might be able to schedule recurring payments months or even years in advance, or use a forward contract to lock in an exchange rate now for a future transaction.
- Processing times. Consider how long it will take for the money you send to arrive into your Australian bank account. If speedy transfers are essential, look for the company that offers the quickest processing times.
- Supported currencies. You will need to make sure that the provider you choose allows you to transfer funds in any currency in which you receive sales payments.
- Customer support. This is a crucial factor that is sometimes overlooked. Make sure that you can easily access phone, email and/or live chat support if you ever need help with a transfer.
Other things to be aware of
There are a few other tips worth remembering when selling items overseas on eBay, including:
- Tax requirements. Remember that you need to report all foreign income to the ATO. There may also be taxation requirements specific to each country, such as the US/Australia Tax Treaty which prevents you from paying tax twice on your foreign income. Seek advice from your accountant to make sure you comply with all laws and regulations.
- Watch out for fraud. Make sure you’re aware of the risk of fraud when accepting payment from foreign buyers. eBay offers some handy advice on how to recognise counterfeit cashier’s cheques.
- International shipping. If there’s a specific country you don’t want to or can’t ship to, you can exclude shipping to those regions. Also, it’s a good idea to consider insuring any items shipped internationally with your courier or postal service.