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30% fees on most items sold?
All of my book item payouts come out as more than 30% in fees. I dont use free shipping or promotions. Here I get payed $2.76 on a $4.50 item. Thats almost 40% in fees. Am I making a mistake somewhere or is this normal.
29 comments
kh-shakhib
·1 year agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.
Thank you for understanding.
chariot_badges
·1 year agoYes. You are making a mistake.
You're not charging enough for that book
janet9988
·2 years agoThe buyer paid for for shipping than the cost of the item. I am sure the buyer is not happy about that either.lol
femmefan1946
·2 years agoOn a $10 book, a $2.75 profit sounds about right.
Actually less since you bought the book for about $1 or less, and that should be deducted.
But as everyone has told you, fees are calculated on your customer's TOTAL payment, not on the price of their purchase.
And "free" shipping means the costs of shipping are included in the asking price, which is popular with buyers, and one reason why the "total payment" is used as the basis for fees.
stainlessenginecovers
·2 years agoEbay gives you the opportunity to 'add' a 'handling' fee, which ALL sellers should- which is about 20% to the 'calculated' rate (allowing for the 15% Final Value Fee and 5% for packaging)...at 'minumum'.
If you are NOT doing that, you are simply doing it wrong (or figure the 'fees/shipping materials' into the Price of the Item, but you cannot look at selling something for $5 and figure you are selling it for $5, you are selling it for $5 MINUS Final Value Fees of the TOTAL.
gator08041971
·2 years agoI always thought this whole process was pretty simple.
Total of the sale including shipping and tax X the FVF % for the listing category + 30 cents is what you pay. Now those who deal in higher volume sales and/or are TRS, qualify for discounts on FVFs and insertions and that helps some in reducing the fees.
But you have to factor your shipping. I have been migrating more and more of my listings to free shipping. But for larger items or heavier items, I will charge to ship out, but still return them for free.
And its not really free shipping obviously. I have to calculate (and over guess it a bit) what I will have to pay to ship the item and add it to what I hope to sell it at. There are items that I still don't understand how some sellers can make any money on at all. For what I know of the cost of fees and shipping, they are practically giving the item away. Its a waste of time to list for so low a return in my opinion. I have some low cost items, but its mostly so I can get them gone, not to turn a profit on them. But I can't imagine everyone is listing items for that reason.
kensgiftshop
·2 years agoYour shipping label is not a fee, it's an expense.
bashort
·2 years agothe OP never said it was a fee. Item sold for $4.50 ebay kept $1.74 that is about 40%
slippinjimmy
·2 years agoThread Title "30% fees on most items sold?"
The OP like many others (incorrectly) consider shipping is a fee and then to be even more incorrect they do not include shipping paid by the buyer to be part of the sale.
If one really wants to pump up the fee rate they could also include the cost of the item sold and claim that is also a "fee".
When mailorder sellers online or offline sell something everything except the Sales Tax paid by the buyer is revenue while all shipping costs including packaging, cost of the goods themselves and any other costs (eBay fees) are expenses.
bashort
·2 years agoIf shipping charges were a wash then:
Item sold for $4.50 ebay kept $1.74 that is about 40% PERIOD
dbfolks166mt
·2 years agothe OP never said it was a fee. Item sold for $4.50 ebay kept $1.74 that is about 40%
The item sold for $9.65 which is what will go into the gross revenue on your 1099.
femmefan1946
·2 years agothe OP never said it was a fee. Item sold for $4.50 ebay kept $1.74 that is about 40%
The item sold for $9.65 which is what will go into the gross revenue on your 1099.
One reason for being very exact about terminology is that most of those who are angry about their low profit are blaming "fees" paid to eBay, while the "expenses" such as postage, bubblewrap, sales taxes, make up as much if not more of the seller's expenses.
Put blame and responsibility in the right columns.
It's easier on your ulcer.
monroe67
·2 years ago"All of my book item payouts come out as more than 30% in fees. I dont use free shipping or promotions. Here I get payed $2.76 on a $4.50 item. Thats almost 40% in fees. Am I making a mistake somewhere or is this normal."
eBay's order details, which you pasted, show a completely normal eBay transaction for selling a $4.50 book on eBay.
The mistake you are making is comparing your $2.76 "Order Earnings" to your $4.50 "Item Subtotal."
eBay's Final Value Fee (FVF) percentage on books is 14.75%.
The FVF percentage is charged on the Total Amount Paid By Your Buyer.
To quote from eBay's User Agreement, with plus signs (+) added for emphasis:
"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 + any other applicable fees."
Actually, in a sense, you kind of "lucked out" on this transaction.
Your order earnings could easily have been less than $2.76.
Your buyer paid sales tax of $0.28 on a $4.50 item which indicates the delivery address is in an area with only about a 6.2% sales tax, in a state that does not charge sales tax on postage. That sales tax could have been a lot more, had your buyer's delivery address been in, say, Los Angeles where sales taxes are 10% or slightly higher OR to a state such as Texas where the $4.87 shipping charges would also have been taxed.
yuzuha
·2 years agoYour mistake was only charging the exact amount that the shipping cost to purchase. Shipping is more than just the price of the postage-- it covers the cost of your shipping supplies, gas to take the packages to the post office, fees on the shipping, etc. as well.
isaiah53-57
·2 years ago@ivad87
You are correct - you paid 39% in fees against the items price, which is the only source of profit in the transaction - And its utterly disgusting
You didn't come here to sell a $9.37 item, you came here to sell a $4.50 item with a $4.87 shipping amount - Shipping was a wash and shipping is always a wash(or more likely a loss if you account for shipping expenses and your time properly) Many here will try to convince you otherwise - They'll artificially inflate revenue with the shipping cost, to water down the rate you are actually paying - But you are smarter than that and I applaud you for it!
Mind you, you'll need to deal with shipping in your top line come tax time, but as I said, its a wash at best within pennies and it has ABSOLUTELY NOTHING to do with your bottom-line profit, which is what most people pay taxes on - You're good with your figures - Now its time to decide if its worth selling here...
nobody*s_perfect
·2 years agoAs a percentage of the selling price, the final value fee will seem to be doubled when the shipping cost is roughly equal to the selling price.
So in a category where the FVF percentage is 15%, the FVF will indeed be 30% of the item price alone. Add on the 30-cent flat fee and as noted in another post, that can be a significant additional percentage for a low-price item.
To answer your bottom-line question: Yes, this is "normal" for low-priced items.
slippinjimmy
·2 years agoWhen you sell low value items the 30 cent fixed transaction fee is a killer. On a $10 sale that is 3% on a $5 sale it is 6%.
In any event your sale amount $9.37, fees were $1.74, that is 18.57% not 30%.
theteamsetguy
·2 years ago@slippinjimmy ,
That's why I factor in the 30 cents with my shipping charges. My buyer buys an average of 4 items which means I collect $5.25 from the average buyer for shipping. My average shipping label costs me $4.10 or so. The $1.15 covers the FVF on shipping, taxes, and 30 cents.
heckofagame
·2 years agoIf you offer free shipping, you will eat the cost of shipping unless you work it into your item price, but then you would be back to paying more fees. It's a personal choice.
inhawaii
·2 years agoYou're confusing "fees" with the "cost of selling".
Your fees are 13.25% just like mine.
bashort
·2 years agoYes the fees are 12.35% but the EFFECTIVE fees which are as far as I am concerned the only number that matters are really close to 40% on this transaction.
The reason that they are so high is because of the shipping cost to item price ratio and the $.30 transaction fee makes a sizable difference on these type of sales.
nobody*s_perfect
·2 years agoThey're selling books, so their FVF rate is 14.95%.
inhawaii
·2 years agoJust trying to point out the "fees" are different than the "cost of doing business."
777mahd11
·1 year agoI hear ppl saying they dont charge 30% . Correct they dont . 13.% But the truth is you pay out 30% and or loose 30% on every transaction because of fees, tax etc. But, I am learning to charge more to recieve what I expect to bring in.
wastingtime101
·1 year ago@777mahd11
When it comes to shipping, the question is whether you want to charge buyers retail rates or discounted rates. Keep in mind that you have access to discounted rates when you purchase labels on eBay regardless of how much you charge the buyer.
The setting to offer buyers discounted rates can be found on your shipping preferences page under the carrier specific discounts setting: https://www.ebay.com/ship/prf
Since eBay charges a fee on total cost buyer pays (item + ship + tax), by charging discounted rates you are losing money on every single package. If you want to make up for that you can add a handling fee or increase your item costs - or simply charge retail rates for a built in cushion instead of passing on the discounts.
heckofagame
·2 years agoThe fees are charged on the total of item + shipping + tax, not on just the item. Try the math again.
ivad87
OP2 years agoAnd offering "free shipping"/"pay shipping"/"buy/dont buy shipping label from Ebay" makes no difference in overall fees paid, correct?
dbfolks166mt
·2 years agoAnd offering "free shipping"/"pay shipping"/"buy/dont buy shipping label from Ebay" makes no difference in overall fees paid, correct?
Potentially it depends on whether the shipping cost is factored into the price of the item, how much was factored in and whether the buyer was located in a state that does or does not apply sales tax to shipping costs. However, the variances are small from the fee perspective, what may vary is the net but that too is generally small unless the shipping cost is excessive. Example.
Seller A lists a 30 dollar item with free shipping having factored in the highest possible shipping cost of $10 into the price of the item. Item sells and actual shipping is only $6.
Seller B lists a $20 item with calculated shipping. The item sells and buyer pays $7 in shipping and lives in a state that does not tax shipping costs. Actual shipping is only $6.
mtgraves7984
·2 years ago@ivad87
^^^ Tagging on... also, remember that your shipping cost is not a fee.