How to get cost estimates for selling & why final value fee includes tax and shipping?
I am having a difficult time with two things here that I would think should be simple but are not.
1) When I put up an item for sale, it doesn't show me what the next selling costs are. I don't know what fees eBay is going to charge from the beginning. The only way to know this seems to go down the list of all the fees that they might charge you and then try to add them up. That doesn't seem very transparent to me because there are so many options to choose from and you don't know what each one is unless you search ebay for each option item to see if there is a fee and how much. So if I include several options, I don't know if the fee is going to be 13.25% or a total of 15% that will include other fees (buy it now, offer, etc.) or any hard costs until eBay eventually charges me.
2) I saw the post-sale breakdown and I find it highly misleading. The final value of an item is what it sells for. It is not shipping costs, which is completely separate. Tax is also not a value of the item.
eBay doesn't tell you that "saving" you on shipping and deduct the costs also means they will charge you 13.25% for the shipping as part of the final value fee. So let's say they enable me to get 5% off of what it would cost to send it with the shipper. If eBay is included the 'final value fee' for shipping, then they are saving me 5% and charging me more than double that savings and I end up losing 8.25% without realizing it because it should never have been a fee that they didn't disclose to me at the time of purchasing the shipping.
Maybe this is hidden in some of the fine print. From my perspective, this is totally not clear until it hits you the first time in your bill and you have a big **bleep**? when you see your net payment.
mustang707
·1 year agoIn another post, you mentioned insurance. You do not pay a fee on shipping insurance costs. You pay a fee on the postage that the buyer pays but insurance is paid by you afterwards. Also. if you ship USPS Ground Advantage, $100 of insurance is included in the price.
tycha27
OP1 year agoNot correct. Let's say the sale is $900. The risk of the package getting lost and the seller being out $800 (above the $100 insurance) is on the seller - unless you buy the insurance. What actually happens is ebay says "hey seller! before you finalize insurance, you'll want to up that coverage and pay eg $15! Don't worry, it will be taken out from the proceeds of your transaction. That $15 is not only taken paid by the seller, but the seller appears to get charged 13.25% for the privilege of adding insurance. eBay appears to inclues any charge it makes on your behalf that I've seen subject to its 13.25% fee.
johnrj1226
·1 year agoDo an eBay search by clicking on the Help and Contact link found on the top left of your eBay OVERVIW page or on the bottom right of most any other page including this page.. Type eBay fees in the search bar and you will find several links info on eBay fees. Easy to do even for this '44 model who didn't mess with a PC, laptop until I was 50, and one of those "Smarter Than Me Phones" 7 birthdays later.
After ready those links that apply to you if you have specific questions - come back and ask it on this forum.
Ciao & Pura Vida
tycha27
OP1 year agoThis is easily the most useful and honest response of all. It's a great way of setting expectations here on this platform. Thank you.
Seems most sellers posting here are saying the same thing. If you know exactly where to look, watched videos if it isn't clear, and then make sure you've checked every single line item one by one, a seller can make an educated guess what the applicable fees probably are. Nobody denies eBay knows with certainty that list and could produce it as a confirmation. They just aren't. It could be a trial and error experience. Got it.
Funny some of you are calling it a total transaction fee and insisting its the newer seller's fault here for not known that is what "final value fee" means in ebay's vernacular. So why not call it a total transaction fee?
Moving on. How about insurance that eBay upsells after selecting shipping? Insurance is a separate product. It may or may not be provided by the shipper. Let's say it will cost $50, which goes according to a chart and is a known amount. The seller chooses yes - but I didn't recall being informed at that time that an additional 13.25% will be applied. Instead of seeing cost will be $56.63, the seller is told insurance costs $50 and the seller finds out the surprise later.
Like the insurance under shipping fees, a Transaction Total Fee is the actual description of their fee, not a Final Value Fee because the amount used doesn't represent the final value of the item but much more than that.
Then there are taxes. I looked up fees imposed on a seller for taxes including in fees in a search engine that generated an AI result that I think is reasonably accurate about a pass through.
No, in most situations, sellers do not directly pay a fee based on the amount of sales tax a buyer pays; the buyer is typically responsible for paying the sales tax to the seller, who then remits it to the government, meaning the seller's fee is not directly tied to the tax amount paid by the buyer.
But here taxes are also subject to a fee. I don't understand why. So if a seller is in a jurisdiction that has a 10% sales tax versus one that doesn't, eBay gets an additional 13.25% of that 10% tax. I wonder how many sellers here keep track of all the tax tables around the globe. I don't think there are tools to limit what states to sell.
Curious to hear your thoughts.
nobody*s_perfect
·1 year agoThe sales tax charged on an eBay transaction is based on the address that the package is shipped to, not on the seller's location. Some states charge no sales tax at all; some charge on just the item price; and others charge sales tax on the whole transaction including shipping and handling. The average sales tax rate is about 8%, but that varies not only between states but also within states that allow local jurisdictions to add their own surcharges onto the state sales tax rate.
eBay charges their fee as a percentage of the whole transaction payment because they are the payment processor. Back when we used PayPal as the payment processor, PayPal charged their percentage (2.9% back then) on the whole transaction including sales tax and eBay charged the FVF only on the item price and shipping. Before 2011, eBay charged FVF on only the selling price, but this discouraged sellers from offering free shipping and also tempted sellers to inflate shipping prices while undercharging for their items in order to evade fees.
I sure would rather pay the FVF rate to eBay on all of those sales tax payments (i.e., about 13.25% of 8%) and let eBay figure out and pass along those sales tax payments, rather than trying to keep track of them all myself and submit them to the various jurisdictions.
isaiah53-57
·1 year agoYou are correct - No doubt they use smoke and mirror in their fee structure to keep you guessing - This board is full of sellers questioning their fees - especially new sellers, but even long time casual sellers...
I can make this simple for you...
Just figure you'll pay approximately 20% of the items selling price in fees on average...
If you use promoted listing at their "recommended" rate of say 13%, then figure approximately 40% of the items price in fees...
dbfolks166mt
·1 year agoYou are correct - No doubt they use smoke and mirror in their fee structure to keep you guessing - This board is full of sellers questioning their fees - especially new sellers, but even long time casual sellers...
I can make this simple for you...
Just figure you'll pay approximately 20% of the items price in on average...
If you use promoted listing at their "recommended" rate of say 13%, then figure approximately 40% of the items in ...
isaiah53-57
·1 year agoYou corrected my statement from:
"Just figure you'll pay approximately 20% of the items selling price in fees on average"
to:
"Just figure you'll pay approximately 20% of the items Total price in selling cost on average"
I'm not sure thats an actual sentence...
Look at it this way for clarification: In looking at the numbers in the chart you provided below, you have $30 as the items selling price - You also show $6.20 in fees(though it should actually be $6.30 using a .40 transaction fee).
$6.30 is WHAT PERCENTAGE of the items selling price? Yes exactly... Its 21% - You proved my point near perfectly with the numbers you provided.
As I said...To make it easy, figure you'll pay 20% of the items selling price in ebay fees on average...
dbfolks166mt
·1 year agoYou corrected my statement from:
"Just figure you'll pay approximately 20% of the items selling price in fees on average"
to:
"Just figure you'll pay approximately 20% of the items Total price in selling cost on average"
I'm not sure thats an actual sentence... It is.
Look at it this way for clarification: In looking at the numbers in the chart you provided below, you have $30 as the items selling price - You also show $6.20 in fees(though it should actually be $6.30 using a .40 transaction fee).
$6.30 is WHAT PERCENTAGE of the items selling price? Yes exactly... Its 21% - You proved my point near perfectly with the numbers you provided. What percentage is it of the total selling cost of the item.
As I said...To make it easy, figure you'll pay 20% of the items selling price in ebay fees on average... But that is a distorted figure. You are using your own calculations which differ from the eBay stated fee policy.
We have had this discussion multiple times and you have yet to show the math based on the fee policy. Yes the effective eBay fees are generally slightly above the 13.25% defined in the fee policy but the eBay fees are never 20% of the total cost of the item. Using your model what are the FVF's on an item that sells for $30 with frees shipping and is sold to a buyer in a state with 6% sales tax?
tycha27
OP1 year agoA sale with a US buyer outside of the mainland can result in several additional fees, including high taxes. So a $700 sale can result in a $840 total transaction cost (including shipping and tax and other related fees) so the seller ends up paying an extra 13.25% on the additional $140, which is near $19. Add that to the 92.75 and you get 16% in this instance. However I didn't add in the additional final sale fee and, if I had used a BuyItNow or a higher reserve price, I'd have likely been subjected to even higher fees.
The 15-20% rule is a good one. On a recent sale I ended up with nearly a 17.5% fee on the final value of what my item sold. It was a wake up call like a hard, cold, smack across the face. I'm ever so glad I didn't use the other options or it could have been worse.
isaiah53-57
·1 year agoYes we have had this discussion before
The whole point of my statement is "MAKING IT EASY" - When you sell something here, you have NO IDEA what the sales tax will be if any - You have NO IDEA what the shipping cost will be - So before you sell something, you have NO IDEA what the fees will be on those numbers - Heck, when you source items, those are not things you need to think about(other than will it be to heavy to sell online)... Using your chart is NOT keeping it simple...It's fine for final accounting for tax purposes after the sale, but when sourcing or getting a quick picture of what your fee costs will be upfront?, keep it shelved...
My "math" is evident and I have shown it many times...Its shown in my statement above - Many of the people who come here complaining about fees are smart enough to realize the only source of profit in the transaction is the items selling price - Taxes and shipping the buyer pays for - they wash out - ebays watered down version of how fees are ONLY 13.25%(high to begin with) is why people come here complaining those same fees eat up 20% of the items selling price, again, the only profit bearing figure in the transaction...
And I cant for the life of me understand why you think I'll calculate my FINAL value fees after the sale any differently than you do - We dont have any choice - Anyone who has sold here for any length of time knows ebay charges 13.25% of the "Entire Transaction"(on most items). When it comes tax time, I'll calculate those numbers down to the penny, but I certainly dont need to waste that time before every sale when I can use a simple 20% of the selling price on average to quickly assess my fees - When I consider buying something to sell, I just need to know I'll profit at least 4 times what I paid for it with a bare minimum of $20 after paying 20% of its value in selling fees(while of course, steering clear of weighty/bulky items) -
That said, the final value fees will be $4.21 - Same as they would be for someone selling that same item for $25 with $5 shipping and 6% sales tax - And all things being equal, after the transaction fee, they will both make the same profit after paying their approx 20% of the items value in fees(18.5% in this case) - In either case the only value to the seller is the items value. Its why we sell - We are not selling shipping - It is ARTIFICIAL revenue - We make nothing from it and in most cases, after accounting for time and shipping materials(what do you think that will do to that $3 shipping overcharge in your chart), its a loss - We came here to sell a $25 item, not a $30 item including shipping.
dbfolks166mt
·1 year agoWhile you cannot the selling cost precisely prior to listing an item you can get pretty close. The eBay fees are pretty well defined and explained in the following.
https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822
As eBay fully details the FVF's are applied to the total amount the buyer pays for the transaction (item cost + shipping + sales tax + $.30 or $.40) I have a simple cost model that will give me an idea of what my payout will be before I ever list an item. I have a more extensive cost model that takes into account the total cost of all selling expenses that include not only the eBay selling expenses but cost of goods sold, supplies, pov, state and federal income tax............
With regards to shipping the FVF's are applied to what the buyer pays you for shipping. Unless you are passing the discounted shipping rate along to your buyer the difference between what the buyer pays you for shipping and the actual cost of what you pay for the label generally covers your FVF's as well as packing materials. You have nothing listed or sold on this account so I cannot use one of your listings as an example but following is a simple price/cost model that I use before I post an item. I adjust the RED numbers until I have the payout I am looking for and see if I can post the item in a competitive market range. If you use promote listings or other options that increase the FVF's you will need to incorporate those into a model.
luckythewinner
·1 year agoI am having a difficult time with two things here that I would think should be simple but are not.
They are not simple because eBay's fee structure is not simple.
When I put up an item for sale, it doesn't show me what the next selling costs are.
eBay cannot tell you what the selling costs are, because some costs are not known until the buyer pays you.
I don't know what fees eBay is going to charge from the beginning. The only way to know this seems to go down the list of all the fees that they might charge you and then try to add them up.
That is correct, which is why I calculate the worst-case scenario by assuming:
Then I make sure that my pricing supports a profit under these assumptions. If the fees turn out to be less, I treat that as a bonus 🙂
deltilogical
·1 year ago"2) I saw the post-sale breakdown and I find it highly misleading. The final value of an item is what it sells for. It is not shipping costs, which is completely separate. Tax is also not a value of the item. "
No, the shipping costs are part of the final value, they usually incur sales tax and will incur the FVF. That tax gets FVF'ed so that is included.
dbfolks166mt
·1 year ago"2) I saw the post-sale breakdown and I find it highly misleading. The final value of an item is what it sells for. It is not shipping costs, which is completely separate. Tax is also not a value of the item. "
I find nothing confusing about the following as defined in the eBay fee policy.
Final value fees
We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus a per order fee. For orders $10.00 or less the per order fee is $0.30, for orders over $10.00 the per order fee is $0.40.
The total amount of the sale includes the item price, any handling charges, any shipping costs collected from the buyer (some exceptions apply), sales tax, and any other applicable fees.
An order is defined as any number of items purchased by the same buyer at checkout with the same shipping method.
tycha27
OP1 year agoThis is funny to me. So the total amount of the sale in the first paragraph is exactly what it seems to mean (and is in lower case plain English) plus a small per order fee! I don't have to worry about third party processing fees, great. They take care of it all for you! I'm relieved!!!
But you do have to worry about stopping after that first paragraph to realize that the remaining paragraphs now redefine what the term "total amount of the sale" actually means. The next paragraph breaks down the "amount of the sale" as a term to be defined on ebay as not the amount of the item that you see prominently as the amount of the sale of the auction. It includes shipping costs too. And sales tax. And any other applicable fees whatever those may be. I'm guessing that even in the 1980s payment processors first defined terms and made sure that was clear.
monroe67
·1 year ago"But you do have to worry about stopping after that first paragraph to realize that the remaining paragraphs now redefine what the term "total amount of the sale" actually means. The next paragraph breaks down the "amount of the sale" as a term to be defined on ebay as not the amount of the item that you see prominently as the amount of the sale of the auction. It includes shipping costs too. And sales tax. And any other applicable fees whatever those may be. I'm guessing that even in the 1980s payment processors first defined terms and made sure that was clear."
Most Americans are intimately familiar with sales taxes. Only five of the 50 United States do not charge a state-wide sales tax.
We all know that, when we choose a t-shirt from a shelf at Walmart that has a prominent sign saying "$6.99", we will actually, legally, have to pay more than $7.00 to leave Walmart with that shirt. People in Los Angeles pay around 10% sales taxes, so they will have to pay approximately $7.70 for that shirt, whereas I, shopping at my closest Walmart about a two-hour drive south of Los Angeles, would pay "only" $7.53. (My sales tax rate is 7.75%.)
Buyers on eBay are shown the shipping cost when they open the listing they might be interested in buying. Sellers can offer a variety of shipping methods, such as FedEx Next Day and USPS Ground Advantage, and buyers can choose the method and price of shipping from those options. In addition, if the seller adds a handling cost to his/her listings, the shipping cost shown to the buyer will include the handling cost.
"Other applicable fees" is kind of a broad phrase that generally means fees charged by the state where the Item will be delivered. These are usually very specific things like California's Tire Recycling Fee or North Carolina's White Goods Disposal Tax (applies to things like refrigerators, washing machines, dryers, etc.). Obviously those fees will apply only to sales of those specific items.
When an eBay buyer selects an item to purchase, he/she will see the Total Amount Of The Sale. If the shipping, handling, and sales taxes add "too much" to the item's listing price, that buyer can always choose to click on "Cancel."
Of course, from the point of view of an eBay seller, if nobody buys the things you have listed, then your Final Value Fees will be $0.00. But your income will be $0.00 also.
tycha27
OP1 year agoAs a concept, yes. But the practice is very different. If you go into Walmart and buy clothing in some high tax states, clothing is actually tax free under a certain dollar amount. And if I'm selling on eBay, I have no idea what the tax is going to be in the Shipper's state for the city of Podunk. But eBay does already. It has a database. It charges a very hefty fee to make all of this painless.
So if eBay knows all of these details instantly, I can't understand a good reason why it isn't disclosed to users who have to play a guessing game without any necessity.
fab_finds4u
·1 year agoWhen you list an item it is impossible to know what your final value fee will be because you do not know where your buyer is located. Some states do not charge sales tax and some states may not charge sales tax on shipping. Sales tax varies.
loose_goose_garage
·1 year agoFor the first part, whatever category you list in is the fee you will be charged. The chart of fees is pretty straightforward on what categories are charged which percentage. Any additional options you choose on the listing page should show you right next to the option or at the bottom of page before you click List Item, what the charges are.
As to the fees being charged on shipping costs, this started years ago when sellers would list, say a new video game system that retails for $400, for $0.99 Buy it Now and then charge $399 shipping. They would only be charged the FVF on the $0.99 sale price, not the $399 shipping. Obviously eBay became aware of this tactic and implemented the current FVF on both Sale Price and Shipping Charges.
This is from the eBay Selling Fees Page: (https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822#section2)
Final value fees
We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus a per order fee. For orders $10.00 or less the per order fee is $0.30, for orders over $10.00 the per order fee is $0.40.
The total amount of the sale includes the item price, any handling charges, any shipping costs collected from the buyer (some exceptions apply), sales tax, and any other applicable fees.
In addition, not sure if you noticed or if your state has Sales Tax, the FVF is applied to this as well. This is legal and allowed, as eBay handles the task of Collecting and Remitting sales tax to the proper states, saving you the hassle, and therefore they are allowed to collect a fee based on it.
klhmdg
·1 year agoThe costs or FVFs are not hidden at all.
There are many places that the fees are explained.
You just need to read the Start Selling, All about Listings and there is a video about understanding fees.
If you listed items and sold them without knowing how everything works and without reading all the resources available, you honestly cant blame anyone but yourself, from my perspective.
dnasilver
·1 year agoMoney processors have been charging on the total transaction for years. We know of it going back to the 1980's.
Sales Tax - what eBay's money processor charges for on sales tax is less than it would cost you to handle sales tax reporting and payout to all the states and locales within. This is one item that actually is saving you time and money.