Should you use eBay’s promoted listings? The answer is incredibly simple: yes!
Well, probably, at least.
OK, so it’s not that simple.
While many kinds of ads can waste your money, these are well worth the cost in almost every situation. But if you don’t understand them, you could slash your profits for no reason. Here’s how they work and when to use them.
What Are Promoted Listings on eBay?
They’re the listings that appear as “SPONSORED” all over eBay. In traditional listing-based searches, they appear in spots 4 and 5 in the search results.
So, using promoted listings isn’t as good as dominating the Cassini search engine, but it gives you a huge boost if you’re normally buried at the bottom! Plus, your ad appears in addition to your listing’s normal spot in search.
Promotions can also appear on item pages, just like any other suggested item.
In product-based search (grouped listings), promos currently don’t show up in spots 4 and 5. However, they still appear on item pages like normal.
(Lost on this whole product-based vs. listing-based search thing? Read up on eBay business strategy in 2019.)
eBay has also stated that promos are appearing on their homepage, but we’ve yet to find an example we could prove was sponsored.
As you may have surmised from looking at the screenshots, each promoted listing is a copy of your normal listing. The only difference is the appearance of the word “SPONSORED.” If you change your listing, the change will appear in your ad as well.
Why Should I Use Them?
Because you’re only charged for the ad if you make a sale through it.
That almost makes promoted listings a no-brainer. If it doesn’t work for you, you won’t get charged a dime. And if it does work, you’ll have made sales you wouldn’t have otherwise.
eBay claims that the average promoted listing sees a 30% boost in views. That means a lot of extra sales, and you only pay the fees on the ones the ad brought in. Sales you won through normal eBay searches are not charged the advertising fee.
For example, say you’re ranked #6 in the search results. A buyer scrolls past your ad because she’s trained her brain to ignore anything with “sponsored” involved. Then she clicks on your standard listing and buys. Because that sale didn’t come from an ad, you don’t pay the fee.
In short, you get:
- More sales than normal.
- No extra fees on the sales you make the old-fashioned way.
What’s not to like?
Which Listings Can You Promote?
Only fixed-price listings. So, sadly, no using this to get a ton of bidders on your auctions. eBay may also choose not to allow you to promote all of your listings. If so, you’ll only see the allowed listings when you start setting up your promotions.
How Much Do They Cost?
You decide how much you’re willing to pay. You set the amount as a percentage of the item price (the fees don’t apply to any separate shipping charges or taxes), which can be as low as 1%. This is called the “ad rate.”
When a buyer searches for your item or something like it, eBay decides if it wants to promote your listing. The higher your ad rate, the more likely your listing will be chosen. You can see the trending rates here.
Which Ads Get Featured?
Ad rate isn’t everything! If your listing is more relevant to the buyer’s search, you might get chosen over a competitor with a higher ad rate. The same thing can happen if your listing sells better.
eBay wants their money. Our educated guess is that their algorithm works something like this:
- Sellers A, B and C sell orange widgets and use promoted listings.
- A buyer searches for “big orange widgets.” Seller C sells small orange widgets, so eBay decides not to show his ad.
- eBay sees that seller A has an ad rate of 10%, while seller B only bid 5%.
- eBay’s data shows that when people visit seller B’s listing, they’re three times more likely to buy than when they visit seller A’s listing.
- The fees from three sales of seller B’s listing would be worth a lot more than just one sale of seller A’s!
- eBay chooses to promote seller B first, then seller A second.
That is a huge oversimplification, of course. But you see the point. You can get away with bidding low if your listing outdoes the competition.
When Are Promoted Listings Not Worth It?
When they ruin your margins.
Using these ads can wreak havoc on your profits. Most ad rates trend around 5–10% in the US. If you’re already running on razor-thin margins of 5% or less, you probably won’t be able to afford them.
When you combine this with the standard cost of selling on eBay, you can easily lose over 20% of your sale price to fees. Ad fees, payment processing, and normal eBay fees all add up. Not all of us can afford that stack of charges.
Sure, you could raise your price to cover the added cost. Or you could switch from offering free shipping to charging shipping fees separately. (Remember, ad rates are not charged on your shipping fees.) But of course, taking either of these actions could deter customers.
Is It Ever a Good Idea to Use Them Even If You Lose Money?
Occasionally, yes. For example, if you need to sink a competitor or improve an item’s sales history, it can be a good strategy. Besides, the losses will only occur on the sales made through the promotion. You’ll still make a profit on the people who buy without having clicked on the ad.
Take a good look at the effect on your margins. If the squeeze would be so bad that the increase in sales wouldn’t be worth it, don’t use Promoted Listings.
Are There Any Catches?
If someone clicks on one of your ads and doesn’t buy, eBay records that they clicked the ad. If they come back to your listing and buy the item within the next 30 days, even if they return through normal search, you have to pay the ad rate.
The rate you pay is whatever you had in place at the time of the buyer’s first click in that 30-day period. So, even if you lower your ad rate or end your promotion, you may still have to pay your old rate on some sales for weeks to come.
Although you may be charged on the old rate, it will be calculated on the price at the time of sale. If you’ve reduced your price, that’s a good thing. But it could be bad if you jack the price up after ending your promotion!
How Can I Start Using Them?
That depends on where you’re selling. On the US eBay site (ebay.com), any Top Rated Seller can use Promoted Listings. You can also use them if you’re a Store subscriber in Canada, the US, the UK, Germany, Spain, Italy, France, or Australia.
If you don’t meet the requirements above, you should still qualify to use the Lite version. This works similarly, but you have to use the quick listing tool. You also have to use eBay’s recommended ad rate and can’t set your own.
Will These Ads Guarantee More Sales?
Definitely not. The odds are good that your sales will go up, but success still depends on the quality of your listing. Here are a few ways to improve your chances of a successful promotion:
- Make sure you know how to take photos for eBay.
- Keep your feedback score high.
- Set a compelling price.
If you can do that (and afford a competitive ad rate), you’ll do well with eBay’s promoted listings. Give them a try and see how they work for you!