Ebay make final value fees more fair (sales tax and shipping)
Summary: pentacannon expressed concerns about eBay's final value fees being calculated based on the total buyer payment, including sales tax and shipping, which they feel is unfair to sellers with low item values. Several participants responded by explaining that excluding shipping from these fees previously led to exploitation by sellers through high shipping costs, which eBay addressed by changing the rules. Some participants defended the current fee structure, highlighting the benefits of eBay's tax compliance and large buyer pool. Others suggested practical solutions like adjusting prices, sourcing inventory smartly, or using fee calculators. There was a mixture of advice and opinions with some members emphasizing eBay's prominence as a selling platform despite potential drawbacks.
Open letter to Ebay,
Currently final value fees are calculated based on total buyer payment:
Including sales tax
Including shipping
For some types of items this is crippling (low item value relative to shipping cost), and is sure to drive sellers of such merchandise to other platforms.
For every sale this is unfair. It is up to sellers to understand and foresee fees no matter how counterintuitive.
Please change final value fee calculation to reflect the our gross payment only.
I understand that ebay encourages sellers to offer free shipping because this reduces friction for buyers, and we all benefit from what attracts buyers. If ebay excluded shipping from final value fees this could give sellers an arguably perverse incentive to avoid free shipping. But I believe such a change doesn't need to be executed in that way. Ebay already has automated tools that accurately estimate shipping fees, and I believe it's possible to build an offset into free shipping, knowing the average cost of shipping, to reduce the effective value of the item. I appreciate this is challenging: how can such an adjustment be fair and transparent? But I believe ebay is clever enough to sort that out.
Thanks
theteamsetguy
·1 month ago@pentacannon ,
Let's say eBay does what you want and only charges a FVF of 13.5% on only the item sales price eBay would end up paying the 3% credit card processing fees on the taxes and shipping out of their pocket in addition to losing the revenue from not charging the FVF on the taxes and shipping.
My guess would be if they only charged their FVF's on the item sales price they would raise the FVF percentage from 13.5% to 18% to make up the difference.
Instead of belly aching over whether the FVF's on shipping and taxes is fair or not. You can do any of the following.
Negotiate harder for a better price when it comes to sourcing inventory. I assume eBay takes 20% my items sales price when I source inventory and pay accordingly. I rarely pay more than 35% of the selling of my inventory and in many case less than that.
Raise your prices to cover the FVF's on shipping and taxes.
Find another platform to sell on that has no fee's. I can think of at least 3 places online you can list your items and sell for no fees. Many on here who leave claim they are doing better on those sites especially on Mr. Zuckerberg's site.
Sell at yard sales, flea markets, garage sales, open a brick and mortar store.
Sell at a local auction.
alix-1200
·1 month agoThe 20% rule is actually a pretty sensible way to stay on the safe side when sourcing, but the real percentage can vary quite a bit depending on the category, shipping, sales tax and whether the listing is promoted.
I built a simple US eBay fee calculator for this because I wanted to see the actual estimated margin instead of automatically assuming 20% on every item:
https://www.feescalculator.info/ebay-fee-calculator-us/
You can put in the item price, buyer-paid shipping, sales tax, category and your actual shipping/product costs and it shows the estimated fees and profit.
I still leave some extra margin for unexpected costs, but it’s useful for deciding the maximum I’m willing to pay for inventory before buying it.
christworks
·1 month ago@pentacannon As a seller who sells on multiple platforms, I can tell you without any hesitation that eBay remains king for both sellers and buyers. The reason the fees are how they are is because you are paying for the buying pool. No other reselling platform has the buyers that eBay does. While other platforms may have a different fee structure, your sales will probably be a third of what they are on eBay. Then what?
Most people would do well to sell on other platforms or have a booth or something else to generate an income stream from reselling. Certainly eBay should be a huge part of that.
As far as selling low dollar items. That is your choice. Knowing the day was coming, I started purging low dollar stuff months ago. I still have plenty though. I'm focused on Q4 now, but after Christmas most anything that is selling for $10 or less out the door will be gone, except for a few exceptions. Other items, like my small appliance parts, will be put into lots.
mr_lincoln
·1 month ago@oregon_bins
Actually, eBay gives Sellers a discount when they purchase their labels through their site. That offsets the fees charged on the shipping and sales tax (if applicable - 5 states don't charge that). I view shipping as a break-even proposition and up until the most recent USPS rate hike I was offering 20% off Retail shipping for Buyers and still doing a little better than breaking even with shipping for the bulk of the items I sell.
As to selling low value items I think those days are coming to a close due to high shipping costs. I am not aware of any other site where it is advantageous to sell low cost items, which venues were you referring when mentioning that this might " ... drive sellers of such merchandise to other platforms. ..."
stainlessenginecovers
·1 month agoOpen Letter to @pentacannon
We do NOT care if you go elsewhere as there are Hundreds of MILLIONS of listings that sellers will still find a way to be satisfied.
Thank you.
tobaccocardyahoo
·1 month agoHandling the sales tax is a service provided to you which would be quite expensive if you had to pay for it separately. Many sellers with their own websites discovered that.
Most states treat merchants as unpaid tax collectors, and fine them heavily if the fail to pay or are late in paying.
You have already been answered on why the shipping is subject to the FVF. Other sellers is the reason.
The major reason why you are hurting is that you do not list and sell enough on Ebay to make any real money, and there is unlikely to be enough pleasure in dealing with what you sell to to do the work for what you net.
kensgiftshop
·1 month agoI think the fee's are fair the way they are, all sellers are treated the same.
eoma689485
·1 month agoFair is a subjective idea. Everyone defines it based on their own needs and feelings. Because of this, it is common for two people to look at the exact same situation and disagree on what is fair.
Was it fair when sellers would sell a $100 item for $1.00 and charge $99.99 shipping - eBay didn't think so, they believed they were being cheated out of their final value fees, so they changed the rules.
eBay built a multi-million dollar enterprise tax compliance department so individual hobbyists and small businesses wouldn't have to register for, track, and file taxes across 45+ different states. The final value fee on the tax portion helps fund that continuous, high-stakes infrastructure.
oregon_bins
·1 month agoWhen they used to exclude shipping from final value fees people would just list things for less than $1 and put the majority of their profit in the extremely high shipping price.