How to Calculate Your Maximum Bid at Auction

Overbidding is the number one way resellers lose money. You see something you want, the auction heats up, and before you know it you've paid more than it's worth. The fix is simple: calculate your maximum bid before the auction ends, and never go above it.

Here's the exact formula.

The Max Bid Formula

Max Bid = (Expected Sell Price × Platform Fee Multiplier) − Buyer's Premium − Postage − Target Profit

Let's break that down with a real example.

Example: A pair of Nike trainers

• Expected eBay sell price: £80
• eBay fees (12.8%): £80 × 0.872 = £69.76 net
• Postage cost: £5
• Target profit: £15
• Buyer's premium (20%): added on top of hammer price

So your max hammer price before buyer's premium:

£69.76 − £5 − £15 = £49.76

Now account for buyer's premium. If the hammer price is £H, you pay H + 20% = 1.2H.

1.2H = £49.76
H = £41.47

Your maximum bid is £41.47. If the auction goes above that, you walk away.

Why Most Resellers Get This Wrong

Most people estimate in their head. They think "it sells for £80, I'll bid up to £50" — without factoring in:

• Buyer's premium (typically 15–25% on top of hammer price)
• VAT on the buyer's premium (20% VAT is often charged on top)
• eBay or platform fees (eBay takes 12.8% of final sale price)
• Postage both ways if the item doesn't sell
• Their own time and target profit margin

Once you factor all of this in, that £50 bid often means you'd need to sell for £95+ just to break even.

The Buyer's Premium Trap

Buyer's premium is added on top of the hammer price — it's not included in your bid. So if you bid £100 and the buyer's premium is 20%, you're actually paying £120 before you've even thought about VAT.

Some auction houses charge VAT on the buyer's premium too, making the effective cost 20% + 24% = 44% on top of your bid. Always check the auction house's fee schedule before bidding.

Platform Fees to Factor In

| Platform | Approximate Fee | |----------|----------------| | eBay | 12.8% of sale price | | Depop | 10% + payment fees | | Vinted | 5% seller protection | | Etsy | 6.5% + listing fees | | Facebook | 5% or £0.40 minimum |

Always calculate using the platform you're most likely to sell on.

How to Do This Faster

Running these numbers manually for every lot in a 300-item auction takes hours. Arbitrage AI's max bid calculator does it instantly — enter the expected sell price, buyer's premium, postage and your target profit and it gives you the exact ceiling price in seconds.

Try the max bid calculator free →

The Golden Rule

Never bid live. Decide your maximum before the auction opens, write it down, and do not exceed it. Auction rooms (and online auctions) are designed to create urgency and push you past your limit. Your pre-calculated max bid is your protection.

If you lose the lot at your maximum, you didn't lose — you saved yourself from a bad deal.