› Kerr Bids Big! - January 22 2001

Dawson's Creek star Kerr Smith finds great buys at online auctions.

When Dawson's Creek's Kerr Smith wants a hard-to-find item at a good price, he looks on the popular Web site eBay.

For a movie, Kerr needed to research Montgomery Clift, a legendary actor. Kerr turned to eBay. He told MATH, "I bought one of [Cliff's] programs for a Broadway show he did. It cost me, like, 8 bucks!"

eBay is an auction site where people sell virtually everything! (You must be 18 or older to use the site.) The sellers decide the minimum amount they'll accept for an item. Buyers bid what they're willing to pay. The person who bids the highest amount of money by the end of the auction "wins" that item.

eBay makes money by charging fees to the sellers. Read "Online Auction Fees" below. Then, you'll be going, going, gone-to out questions!

Step 1

When a seller lists an item on eBay, he or she pays an "Insertion Fee." The fee is based on the opening value of the item (the minimum amount the seller will accept for the item):

Once the auction is over, the seller also pays a "Final Value Fee" to eBay. Here's how to calculate the Final Value Fee:

Step 2

If the final price of the item is $25 or less, multiply the final price times .05. Round to the nearest penny, and skip to Step 5. If the price is greater than $25, multiply $25 times .05 and proceed to Step 3.

Step 3

If the final price is $1,000 or less, subtract $25 from the final price. Multiply the difference times .025. Round to the nearest penny, and skip to Step 5. If the price is greater than $1,000, multiply $975 times .025, round to the nearest penny, and go to Step 4.

Step 4

Subtract $1,000 from the final price. Multiply the difference times .0125. Round to the nearest penny.

Step 5

Add together your answers from Steps 2, 3, and 4 (whichever ones you found). The sum is the Final Value Fee.

Step 6

Add the Final Value Fee and the Insertion Fee (from Step 1). The sum is the seller's total cost.

What To Do

Use the information on page 4 to answer these questions.

1. Say Kerr is the highest bidder on a pair of stereo speakers. The opening value was $45, and the final price was $75.

a. What is the item's Insertion Fee?

b. The final price is greater than $25, so multiply $25 times .05:

c. Subtract $25 from the final price, and multiply the difference times .025:

d. To find the Final Value Fee, add your answers to parts b and c:

e. To find the seller's total cost, add the Final Value Fee and the Insertion Fee:

2. Kerr bought an old TIME magazine with Montgomery Clift on the cover for $12. If the opening value was $2, what was the seller's total cost?

3. Say Kerr buys a laptop computer on eBay for $1,445. The opening value was $900. What is the seller's total cost?

4. In October, a Dawson's Creek poster with an opening value of $5 sold on eBay for $15.01. How much money did the seller make? (Subtract the seller's total cost from the final price.)

S. Say Kerr raises money for charity by selling his autographed picture on eBay. The opening value is $10. His total cost is $1.67. What was the final price?

- Cari Entin

1a. $1

b. $1.25

c. $1.25

d. $2.50

e. $3.50

2. $.85

3. $33.19

4. $14.01

5. $23.40