How to Set a Max Bid on Liquidation Pallets and Online Auction Lots
Set a max bid on liquidation pallets and auction lots from resale value, not retail: buyer's premiums, freight, eBay fees, returns and a worked formula.
Most resellers lose money on liquidation the same way: they bid against the retail value on the manifest, get excited in the last minute, and find out what the lot really cost three months later when half of it is still on the shelf.
The fix is boring and it works. Decide your maximum bid before the auction closes, from what the items actually sell for, after every fee, label and return. This article gives you the formula, two worked examples, and the mistakes that quietly turn a "good deal" into a loss.
Retail value is not resale value
Liquidation listings love big numbers. A pallet with "$3,000 retail" sounds like a steal at $400. But retail value is what a store once asked for new merchandise. You are selling customer returns, shelf pulls and overstock, often open box, on eBay or Facebook Marketplace, against other sellers.
Start every lot from sold comps, not retail:
- On eBay, search the item and filter to Sold Items. Use the middle of the recent sold prices for the same condition, not the highest one.
- On Facebook Marketplace, look at what similar items are listed for locally, then assume you will take a little less.
- For mixed lots with no manifest, value only what you can see clearly in the photos. Treat everything else as a bonus.
Your max bid comes from what the items sell for after fees, not from the retail number on the listing.
Know the fees on both ends
Buying fees
Auction platforms add costs on top of your bid. These change, so read the terms on the listing every time:
- Nellis Auction adds a buyer's premium that its terms describe as "typically 15%," and you schedule pickup within 7 days of winning, so your drive time and mileage are part of the cost. Its return window is limited to eligible items and starts at pickup.
- B-Stock states in its FAQ that its standard fee on B-Stock Supply is 10% of the final bid price, and freight is either a flat rate in the listing or arranged by you. B-Stock also requires a state resale certificate.
- Sales tax may apply where you buy unless a valid resale certificate is on file with that auction.
Selling fees
eBay's final value fee for most categories is 13.6% of the total sale plus a $0.40 per-order fee on orders over $10 (as of October 2026). Facebook Marketplace local cash sales have no selling fee, but they cost you time and messages. If you offer free shipping on eBay, the label is your cost too, and USPS labels carry temporary holiday prices until January 17, 2027.
The max bid formula
Work it in this order:
- Expected sales: sold-comp value of the items you are confident you can sell.
- Minus selling fees: 13.6% plus $0.40 per order on eBay (adjust for your category and store level).
- Minus shipping: your label cost if you offer free shipping, plus supplies.
- Minus a returns and damage reserve: a percentage of sales you set from your own history. Customer-return merchandise has defects you cannot see in photos.
- Minus your target profit. What is left is your maximum all-in cost.
- Minus freight or pickup cost.
- Divide by (1 + buyer's premium), and by (1 + sales tax) if you pay it. That is your max bid.
Write the number down. When the auction is closing, you are not deciding anything; you are just checking whether the price is under your number.
Worked example 1: a single auction item
A countertop air fryer with recent eBay sold comps around $80. You plan free shipping, and a label for its weight and your typical zone runs about $14.
- Sale: $80.00
- eBay fees: $80 x 13.6% = $10.88, plus $0.40 = $11.28
- Label: $14.00
- Supplies: $2.00
- Returns reserve (5% of sale, example): $4.00
- Left before cost: $80 - $11.28 - $14 - $2 - $4 = $48.72
You want at least $25 profit on an item like this, so your max all-in cost is $48.72 - $25 = $23.72.
With a 15% buyer's premium and no sales tax (resale certificate on file): $23.72 / 1.15 = $20.63. Your max bid is $20.
If you would pay 8% sales tax on top: $23.72 / (1.15 x 1.08) = $23.72 / 1.242 = $19.10. Your max bid drops to $19.
That one dollar matters. Across a few hundred lots a year, sloppy rounding is real money.
Worked example 2: a pallet with freight
A pallet listed as "$3,000 retail," 30 units, 10% buyer fee, $250 freight to your door.
You run sold comps on the manifest and the sellable items total about $1,500. Customer-return pallets always include broken, incomplete or unsellable units, so you haircut that by 20% to $1,200 of realistic sales.
- Expected sales: $1,200.00
- eBay fees: $1,200 x 13.6% = $163.20, plus $0.40 x 30 orders = $12.00, total $175.20
- Labels at about $10 average on free shipping: $300.00
- Left before cost: $1,200 - $175.20 - $300 = $724.80
You want $350 profit for the work of testing, photographing, listing and shipping 30 items. Max all-in cost: $724.80 - $350 = $374.80.
Now take out freight: $374.80 - $250 = $124.80. Divide by 1.10 for the buyer fee: $113.45.
So your max bid on a "$3,000" pallet is about $113. If it is already at $300 with an hour left, you let it go. Freight alone ate two thirds of your room. That is the most common surprise in pallet buying, and it is why local pickup auctions and nearby warehouses often beat cheaper pallets across the country.
Returns, time and the stuff that does not sell
Plan for returns twice
You get returns on both sides. The auction may let you return a dead item within a short window, and your own buyers will return some of what you sell. On eBay, a buyer can still return an item that does not match the listing even if you say no returns, under the eBay Money Back Guarantee. Test what you can before listing, and describe flaws plainly.
Count your hours
A pallet of 30 small items takes far more hours than one item worth the same amount. If two lots promise the same profit, buy the one with fewer, bigger items.
Leave room for slow sellers
Some items will sit. Price that into the haircut, and have a plan to mark them down or bundle them after 60 to 90 days instead of letting cash sit on a shelf.
Track every lot after you buy it
The formula only gets better if you check it against what really happened. After each lot sells through, compare what you estimated to what you actually made, per item and per source. That tells you which auctions, categories and pallet types are worth your next dollar, and which ones only look busy.
In our shop we buy at auction and sell on eBay and locally, and splitting a lot's cost across every item is the only way we know which purchases actually paid off.
AI Flip Ledger splits a pallet or auction lot's all-in cost (bid, buyer's premium, tax and pickup) across its items, evenly or by asking price, so every sale carries its real cost. Its AI Advisor then ranks your sources by real profit per item and days to sell. If you get stuck setting up your first pallet, email the owner, Johnathon Lawson, at [email protected]. A real person answers.
The bottom line
A good max bid is set at your desk, not in the last 30 seconds of an auction. Start from sold comps, subtract fees, labels, a returns reserve and your target profit, then remove freight and the buyer's premium. If the bidding passes your number, the lot was not a deal for you, no matter what the retail value says.
Frequently asked questions
What percentage of retail should I pay for a liquidation pallet?
There is no safe fixed percentage, because condition, category and freight vary too much. Build the max bid from sold comps and your costs instead. A "10% of retail" pallet can still lose money once freight and unsellable units are counted.
Is the buyer's premium included in my bid?
Usually not. Nellis Auction and B-Stock add their fee on top of the winning bid, so divide your max all-in cost by 1.15 or 1.10 (or whatever the listing states) to get your max bid.
How do I account for items I cannot sell?
Take a haircut on expected sales before you bid, for example 15% to 25% on customer-return pallets, and adjust it from your own results. Items that fail testing can often still sell as for parts or not working.
Should I buy pallets that ship or local pickup lots?
Run both through the formula. Freight is often the largest single cost on a shipped pallet, so local pickup lots tend to leave more room for profit if you can get to them.