How to choose a Promoted Listings ad rate: work out your ceiling, pick a starting rate and test it

What is a Promoted Listings ad rate?

A Promoted Listings ad rate is the percentage of a sale you agree to pay eBay when a promoted item sells after a buyer clicks your ad. In a general campaign, the cost per sale type, eBay says you pay only when the promoted item sells within 30 days of a click on the ad, and the fee is your ad rate applied to the item's total sale amount, including the item price, postage and taxes, at the rate in effect at the time of the sale. A listing can be in only one general campaign at a time.

Choosing the rate well means knowing the most you can afford, starting below it, and testing. This guide shows you how, with a worked example. If you are deciding between campaign types first, our comparison of general vs priority campaigns covers that choice.

What are the rules for setting an ad rate?

eBay's general campaign strategy page sets out the options:

• Range: you choose an ad rate between 2% and 100% of the item's total sale amount. eBay says a higher rate gives a greater chance of ad placement and more visibility.
• Dynamic ad rate: eBay updates your rate daily to its suggested rate, so you do not have to adjust it by hand.
• Fixed ad rate: the rate stays where you set it until you change it.
• Suggested rate: eBay calculates it from factors that may include item attributes, seasonality, past performance and current competition.
• What counts as a click: any interaction with your ad, including adding to a watchlist or basket and Quick View.
• Timing: the fee uses the rate in effect when the sale happens, including for later sales from a multi-quantity listing.

eBay's main Promoted Listings page describes the attribution as last click: the sale is credited to the ad if it was the last ad clicked within 30 days.

How do you work out the highest ad rate you can afford?

Your ceiling is the rate at which the ad fee would take all your profit. Above it, every promoted sale loses money.

1. Find the total sale amount the buyer pays: item price plus postage (and VAT if it is in the price).
2. Work out your profit before ads: total sale amount minus your item cost, postage cost, packaging and eBay's other fees.
3. Divide profit before ads by the total sale amount. That percentage is your break-even ad rate.

A worked example

Example: suppose you sell an item for £22 plus £3 postage, so the total sale amount is £25. Your item cost is £10, postage costs you £2.80, packaging £0.40, and eBay's other fees, using a hypothetical 14% of the total for the arithmetic, are £3.50. Profit before ads is £25 minus £16.70, which is £8.30.

• Break-even ad rate: £8.30 divided by £25 is about 33%.
• At a 5% ad rate, the ad fee on a promoted sale is £1.25, leaving £7.05 profit.
• At a 10% ad rate, the fee is £2.50, leaving £5.80.
• At 33%, the fee is about £8.30, leaving nothing.

Check your real fee rate on eBay's fee pages; the 14% is only for this example. The same sum on a low-margin item might give a ceiling of 8% or less, which changes the answer completely.

How should you pick a starting rate?

The ceiling is not the target. A useful way to set a starting rate is to decide how much of your profit you are willing to give up for an extra sale, then compare that with eBay's suggestion.

Two points of judgement matter here. First, with last-click attribution, you can pay an ad fee on a sale that might have happened without the ad, for example when a buyer who would have found you in normal search clicks your ad first. Second, the suggested rate reflects competition for placement, not your margin. If the suggestion is above your ceiling, it is not a rate for you on that item.

Dynamic or fixed: which should you use?

• Dynamic suits sellers with many listings and healthy margins who do not want to manage rates. Set a check so a rising suggestion cannot pass your ceiling on low-margin items: group those separately with a fixed rate.
• Fixed suits sellers who price tightly. You know the cost of every promoted sale in advance and can include it in your price.

Whichever you choose, include the ad rate in your pricing. If you price from a formula, add the ad rate as its own percentage alongside eBay's fees, so a promoted sale still meets your profit floor. Our guides to an eBay pricing formula and the break-even price show how.

How do you test whether a rate is working?

1. Make two comparable groups of listings, with similar products, prices and past sales.
2. Give each group a different fixed rate, for example 3% and 7%, in separate campaigns.
3. Leave everything else unchanged for at least four weeks: price, title, photos and postage.
4. Compare total profit per group, not ad sales. Add organic and promoted sales together and subtract every fee, including ad fees.
5. Move to the better rate and test again against a new rate.

Look at the campaign report for ad clicks and sales, and at each listing's traffic history, which splits views from ads and views that do not come from ads. If a higher rate brings more views but total profit falls, the extra visibility is costing more than it earns.

Which listings should you leave out of promotion?

Not every listing needs an ad. Leaving some out is often the quickest way to lower your ad cost without losing sales:

• Listings where you are the only seller of a specific item. Buyers who search for it will find you anyway.
• Low-margin items whose ceiling is close to the minimum 2% rate. There is no room for a meaningful rate.
• Items you cannot restock quickly. Paying to sell the last unit faster rarely helps if the listing then sits at zero.
• Listings with a weak page. If views do not turn into sales because of poor photos or a missing detail, an ad buys more views of the same problem. Fix the listing first.

Offers and price changes

eBay says the ad fee is based on the rate in effect at the time of the sale, and that this applies when a listing is revised or sells through Best Offer. If you accept an offer, the fee is charged on the lower total sale amount, at the current rate. If you raise a rate for a short promotion, any sale in that window is charged the higher rate, even if the click came earlier. Keep a note of each rate change with the date, so you can match ad fees on your invoice to the rate that applied.

Which ad rate mistakes cost sellers most?

• One rate for the whole store, including items whose margin cannot carry it.
• Forgetting postage and taxes are in the total sale amount the rate is charged on.
• Leaving peak rates on after the peak, since the rate in effect at the time of sale applies.
• Following the suggested rate without checking it against your ceiling.
• Judging by ad sales alone, instead of total profit.

An ad rate checklist

1. Work out the break-even ad rate for each product group from its total sale amount.
2. Set starting rates well below the ceiling, lowest on low-margin items.
3. Use fixed rates where margins are tight; consider dynamic where they are healthy.
4. Add the ad rate to your pricing formula so promoted sales meet your profit floor.
5. Test two rates on similar groups for four weeks and compare total profit.
6. Review rates after every peak season and every price change.

The same method works on eBay US, where you should check eBay.com's Promoted Listings help for the current options. Set from your margin and tested on your own listings, an ad rate becomes a controlled cost rather than a guess.