Final Value Fees are Insane
I usually don't post on the public forums at all. But I have been selling on Ebay for over 23 years and just
recently I sold a Sirius boombox with the receiver in great condition. Was listed for $35.00 after the fees were taken out my pay to me was $21.40 **bleep** am I not seeing something is wrong here?? I really am thinking outside the box here and is it worth my time and energy to let these people make actually more than I do ... I don't think so I will reconsider my selling options moving forward
119 comments
oldrockerdanny
·2 years agoI have experienced the same condition and feel the same way. In order to get what my item is worth , I would need to inflate the price to an unreasonable number. I have been on eBay for 25 years and don't remember fees being this high not long ago. I suggest there be a more reasonable scale of fees implemented , otherwise I can't see the future value of selling on eBay.
dbfolks166mt
·2 years agoI have experienced the same condition and feel the same way. In order to get what my item is worth , I would need to inflate the price to an unreasonable number. I have been on eBay for 25 years and don't remember fees being this high not long ago. I suggest there be a more reasonable scale of fees implemented , otherwise I can't see the future value of selling on eBay.
I too have been selling on eBay for quite some time and the fees have gone up slightly over the years but so has everything else. However, I have found that the shipping increases have had more of an impact on what I sell on eBay than the fees. A lot of items that years ago I would have listed on eBay I no longer even attempt to list since, like you stated, the price would be an unreasonable number. The exception is for those items that I am just trying to get rid of and even then I simply donate those to goodwill or the salvation army and take the tax deduction.
I am fortunate enough to live in a fairly large metropolitan area and a lot of items I sell these days are through local forums that have no, or low, fees and are local pickup or delivery where the buyer does not have to pay for shipping and I don't have to worry about shipping damage or loss. The buyer also gets to see and inspect the item before paying so the risk or returns is virtually 0.
The entire marketplace is changing and I don't see eBay lowering their fees, they are a business and like most businesses are out to make a profit.
mam98031
·2 years agoIn most categories Ebay has NOT raised fees for quite a while. When Managed Payments went site wide, in most categories we paid 10.2% FVFs to Ebay and 2.9% to PayPal. For a total of 13.10%
When Ebay started taking MP sitewide in mid summer 2020, they went to a simplified fee of 13.25% in most categories. Also at that time we started paying our FVF on sales tax too. Once Ebay became our Money processor the FVF was charged on the total amount a buyer paid. The same held true when PayPal was our money processor. We paid their fee on the total amount the buyer paid.
What is really increasing the costs to sellers are other factors. Carrier costs just keep climbing and is likely the biggest reason for higher costs. Then for those sellers using Promoted Listings, that can be a big factor too.
mam98031
·2 years agoThe name itself allows for variations. GAAP = Generally Accepted Accounting Principles.
4mysweetgirl
·2 years agoI feel your pain, though fees are easy to look up. I know what the fees are, which is why I don’t list much on eBay anymore. I’d rather donate many things instead of selling them here, simply because the margin is too small to make it worth my time. So Goodwill gets it, or my Buy Nothing group.
FB marketplace doesn’t charge fees, and there are a lot of selling groups. But eBay has a bigger reach and people are willing to pay a bit more, so for some items it is still worth it, sometimes barely, but yes. I do wonder how much business eBay loses due to their high fees, but I guess they must have done the math. Going in eyes wide open is always a good idea!
susanb1872
·2 years agoI agree for tax purposes, the shipping fees collected are revenue for tax purposes and needs to be reported that way. The IRS creates all sorts of rules and definitions that fit their needs of collecting taxes for the government. But the IRS definition of revenue is not a universal definition. Accounting definitions of revenue are different than the IRS. In the end, I am not selling shipping services, I am just collecting cash on behalf of the buyer who instructs me where to buy the shipping services (USPS or wherever). When computing the ebay effective FVF, I don’t follow the IRS definition. I would not include shipping as part of gross revenue since I am not selling the shipping-I am just selling an item.
A different example, if Walmart sells an Applebee’s gift card, it is not revenue to Walmart (except for some minor service fees). Just because cash is received, doesn’t automatically make it revenue.
dbfolks166mt
·2 years agoI agree for tax purposes, the shipping fees collected are revenue for tax purposes and needs to be reported that way. The IRS creates all sorts of rules and definitions that fit their needs of collecting taxes for the government. But the IRS definition of revenue is not a universal definition. Accounting definitions of revenue are different than the IRS. In the end, I am not selling shipping services, I am just collecting cash on behalf of the buyer who instructs me where to buy the shipping services (USPS or wherever). When computing the ebay effective FVF, I don’t follow the IRS definition. I would not include shipping as part of gross revenue since I am not selling the shipping-I am just selling an item.
A different example, if Walmart sells an Applebee’s gift card, it is not revenue to Walmart (except for some minor service fees). Just because cash is received, doesn’t automatically make it revenue.
I have done accounting and prepared taxes for many years and I always record any funds received in the accounting spreadsheet that aligns with IRS and GAAP standards. I am curious if you don't record it as revenue where do you record it and how to you reconcile your books against your 1099 if you receive one? If you don't do you simply record your revenue as the amount you received less the shipping? If so I hope you are never audited.
I record expenses the same way including the shipping label cost, eBay fees, COGS, materials.............
In your Walmart example the cash received is revenue but there is a offsetting expense when Walmart pays Applebee's.
mam98031
·2 years agoIt is much similar than that. Most charge a small fee on top of the actual cost of shipping or they estimate it to be the highest costing zone they may have to ship to when they are doing stated shipping. Most sellers do not charge the exact amount of shipping because it can vary due to what state you would be shipping into.
Certainly for some sellers they try and charge the exact shipping, however they aren't always right either. Sometimes they are high and sometime they are low.
So the easiest and cleanest way to do this is to take the shipping the buyer pays, count it as income, then when the seller subtracts their actual costs, it all comes out in the wash. So much better than multiple rules and certainly less confusing.
lvr-3929
·2 years agoFWIW my last 30 days the fees off my net total are about 30%. That includes the eBay fees, the shipping labels, the sales tax, does not include my costs to print the labels or actually go mail the items. It does include some promoted listing fees. Some items I only make a few dollars on.
You can find all this stuff in your seller dashboard.
A large item like a boombox you should be shopping the shipping and buying the label on eBay. I don't know if I would even list something like that at all given the size and the need to pack it securely.
mam98031
·2 years ago@lvr-3929
Your post shows clearly where some confuse fees with other costs. Ebays FVF are just the fees that Ebay charges you for a regular sale. In most categories that is 13.25%.
What you are doing is calculating your COSTS for selling the item are 30%, NOT the FEES. While shipping is a Cost, it is NOT a fee charged by Ebay. Nor are your shipping supplies.
So your percentage may be accurate for your COSTS, but it isn't accurate as to the FEES Ebay charges.
You mentioned Sales tax as being one of your costs. It is NOT. Buyers always pay the sales tax, NOT the sellers. There are no exceptions to this.
You can find all the info you have cover in the Seller Hub, not the Seller Dashboard. While the Seller Dashboard is in the Seller Hub, your costs are covered in other sections in the Seller Hub.
lvr-3929
·2 years agoeBay fees are charged based on the total sale amount. This includes item price, handling, shipping charged, and sales tax. My gross sales includes all of those things.
After deducting all of these things, eBay themselves shows me the fees and expenses are about 30% of the gross sales. This is prior to any costs not run through eBay, such as fuel, shipping supplies and the like.
If I sell an item for $84 plus $10 shipping, at 8% tax I collect $100 and change. eBay takes the fees and sales tax off the top, almost $7 in taxes, $13.64 in fees, about $21 leaves me with $80. If I'm lucky I get 40% off the shipping with an eBay label so it only costs me $6 to ship for $27. Not quite 30% of $101 but you get the idea.
Assume this is a new item retailing for $105, I sell for $84 (20% off) and my cost is $63, I've made a whopping $11 ($74 back to me). Roughly 10% of the retail price is profit.
If it wasn't for the occasional find of things absurdly underpriced (used, collectible, etc.) it would barely be worth the trouble to sell on eBay. Even then you get stung, people return things and you have to eat the shipping costs so even if you resell it you maybe break even at best.
Not sure why this is hard to understand.
mam98031
·2 years ago@lvr-3929
Yes, FVFs are based on the total amount a buyer pays.
Yes, Fees AND EXPENSES can be 30% of the sale or more, however that does NOT mean that Ebay's FVFs are 30%, it means your COSTS are 30%.
Some posters are confusing the Cost / expenses of selling something with how much EBAY charges in a FVF. The two are NOT the same. Knowing your costs of sale is a very important thing to know, but it is also important to know what is an Ebay FVF and what isn't.
janet9988
·2 years agoIf I sell an item for $84 plus $10 shipping, at 8% tax I collect $100 and change. eBay takes the fees and sales tax off the top,
almost $7 in taxes,................................. NO Ebay's FVF for the sales tax the buyer paid is 13.25% which is 1.02
$13.64 in fees, about $21 ......................NO Ebay's FVF of 13.25% for the item sale price is 11 .13
plus $10 shipping....................................No EBAY'S fvf IS 13.25% for the bueyr paid shipping is 1.33
FVF is $13.28 it is13.25
The seller does not pay $7.00 is sales tax.
The buyer pays the shipping.
Any other thing a seller pays for is not a final value fee.
dbfolks166mt
·2 years agoFWIW my last 30 days the fees off my net total are about 30%. That includes the eBay fees, the shipping labels, the sales tax, does not include my costs to print the labels or actually go mail the items. It does include some promoted listing fees. Some items I only make a few dollars on.
You can find all this stuff in your seller dashboard.
For the last 31 days mine have been 13.4% but the I don't purchase my labels off eBay.
A large item like a boombox you should be shopping the shipping and buying the label on eBay. I don't know if I would even list something like that at all given the size and the need to pack it securely.
sextons-sweet-deals
·2 years agoThe FVF can be complicated, over exaugurated, confusing, and possibly misleading.
I stand at a current 25.2% selling fee cost with eBay fees and shipping labels I purchase on eBay, and I don't do any charity donations.
mam98031
·2 years agoYour total costs isn't what this thread is about. Many are confusing that with what the FVFs are that Ebay charges. Those are simple. Some want to complicate that. The title of this thread is "Final Value Fees are Insane", not that the total costs for selling on the internet are insane. Because no matter what site you sell from you will have the same type of costs.
Your shipping costs are NOT an Ebay fee, they are a carrier fee, Ebay doesn't keep the money, it is remitted to the proper carrier.
I understand that your selling costs aka COGS [costs of sale] are about 25.2% not to be confused with Ebay's FVFs charged. They are two different things. Both important numbers for all sellers to know so they can stay profitable here or anywhere they may sell.
ed8108
·2 years agoManny are finding selling on ebay is no longer the gold mine it was in the past
tim3737
·2 years agoYes, there is something wrong here. Ebay has just gotten way too greedy like all other big corporations. I remember selling 20 years ago and the final value fee was something like 4%. Now it's over 12.5%. And they used to even have a thing called "eBay bucks" where you could get a percentage off your purchases. They even offered monthly, then quarterly deals where you could get 15% off anything in your cart! Sadly those days are long gone. Now that eBay has monopolized the industry, and it's the only place you can get such exposure to the masses, they can charge whatever they want to for selling on their site. A normal person can't compete now with all the drop-shippers and no way a normal person can even think of making money selling. If you add fees to your price, people will just purchase from a seller with a lower price, and I don't understand how those people are even making money. I just sold a $20 item with free shipping that I paid $20 for on eBay and I got $11.75 for my trouble, so basically a 40% loss! That is the opposite of making money. The world has just gone to hell with all the greed.
mam98031
·2 years ago@tim3737
" I remember selling 20 years ago and the final value fee was something like 4%. " So is it your belief that prices for labor, supplies, hardware, utilities, etc. etc. has not increased in the past 20 years. Have costs for you stayed the same this past 20 years? Ebay should be able to charge what they did 20 years ago and still be a profitable company? The reality of that would be that Ebay would not survive.
yuzuha
·2 years agoIf the price was $20 with free shipping, then it wasn't actually a $20 item. It would be more like a $13-15 item + shipping.
adkhighker
·2 years agoAin't that the truth. Either way the seller figures it, free shipping or not, they still would lose a little over 40% of their sold price for that transaction. Sometimes I think Free Shipping should be changed to Sellers Pays for Shipping.
mam98031
·2 years agoWhy? No one actually gets Free Shipping, someone has to pay for it. When a seller offers free shipping, they need to roll the cost of the shipping into the price of the item and therefore raise pricing.
Selling an item for $20 with free shipping.
Selling an item for $15 and $5 shipping.
Both are the same, just different methods of selling.
fern*wood
·2 years agoYou sourced this item for $20., then listed it at $20. with free shipping and feel that it's ebay's fault you didn't make money?
tim3737
·2 years agoNo, I was just trying to show how ebay and the shipping companies combined take 40% of your money. The part from a dealer would cost $20. The seller I bought it from listed it for $20 with free shipping. You can't list on eBay at a competitive price and make money.
buyselljack2016
·2 years ago@tim3737
You can't list on eBay at a competitive price and make money.
_________________________________________________________
I do everyday............................. because my COG's is not at the "retail" price.
yuzuha
·2 years agoSure you can. You just need to be smart about your sourcing because you make your money when you buy, not when you sell.
Buying an item for near retail price and then trying to sell it for retail price will ALWAYS be a losing proposition.
doc-holmes
·2 years agoIf only there was some kind of system where we could take the means of production and distribution away from these giant corporations and put it back in the hands of everyday people.
mam98031
·2 years ago@tim3737
I'm unsure as to how you thought you would make any money off this selling something for exactly what you paid for the item. This isn't or wasn't your first sale, so you know there are costs associated with selling here.
I'm also unsure as to how this equals Ebay's fault. You priced the item, NOT Ebay. You should have known that listing it for the exact amount you paid for the item and gave the buyer Free Shipping would mean that you would be in the hole. There would be absolutely no way for you to make any money on the sale and that is completely due to how you set the pricing on the item.
Why were you surprised at the outcome of you losing money? You set it up that way.
tim3737
·2 years ago40% loss! are you paying attention? I wasn't expecting to make money, but I didn't expect to lose that much either. I just wanted to sell the item because I didn't really need it. If I would have priced in eBay fees and shipping fees no one would be stupid enough to pay that amount and it would not have sold.
The OP said final value fees are insane. I was merely confirming that based on a recent sale. eBay is a multi Billion dollar corporation and they don't need to take over 13% for fees, and they shouldn't charge fees on shipping since they aren't a shipping company, and shouldn't charge fees on taxes since they aren't the IRS. That's why people call it Feebay because they charge too much in fees.
mam98031
·2 years agoYou are not new to selling, so you knew that selling something for exactly what it cost you would be a loss. You knew before you listed it that you would have FVFs on the transaction when it sold. You knew you would have to pay for shipping to get it to your customer.
All of that was known to you when you listing the item at your cost. Ebay charged the fees they state they will charge you. And the carrier costs you could have figured out before listing it.
Sometimes stuff is just cheaper to donate.
dogofwar777
·2 years agoAnother reason I stopped selling here. I only buy here now. When I do have something to sell I usually take it to local buyers who hand me cash, no fees to pay, no hassle.
broto_64
·2 years agoSure thing but selling local doesn't get anywhere near the coverage, and the buyers also know there are no fees so they expect a lower price and many want to haggle, last but not least a good half of all buyers are no shows so I don't know about that "no hassle" part... It all involves hassle if you ask me, just depends which hassle I want to deal with.
mtgraves7984
·2 years ago"I don't think so I will reconsider my selling options moving forward"
@24-7shopper
You've got other listings up... think long, think wrong. 🙄
johnrj1226
·2 years agoHere is how eBay calculates your selling fees - never had eBay or eBay/PayPal overcharge on fees
https://www.ebay.com/help/selling/fees-credits-invoices/fees-selling-costs-charged?id=5297&st=3&pos=2&query=How%20fees%20and%20selling%20costs%20are%20charged&intent=Selling%20fees&lucenceai=lucenceai&docId=HELP1679
How did you calculate your selling fees?? - show us item by item - maybe we can help you
fashunu4eeuh
·2 years agoYes, i agree with the OP—not everything is suitable for listing on eBay.
Also agree with some others that a seller should not be surprised by their fees. One cannot set adequate pricing without knowing upfront what all the costs will be for listing and selling their items on eBay.
mam98031
·2 years agoThere has to be something else in that amount other than the FVFs on the transaction. You can go and look at the details of that on your Order or in your MP account.
35.00 Product
36.90 S&H
5.75 Estimated sales tax at 8%
77.65 Total
77.65 times the FVF of 13.25% = 10.29 + .30 fixed transaction fee = $10.59 in FVFs.
Clearly you had high price shipping on this item, so I'm unsure as to what you expected.
35.00 - 10.59 = 24.41
So while there is a small difference in numbers, you get the idea. You just need to remember you don't get to keep the shipping money the buyer pays you, that goes to the carrier. And that is likely why this transaction tricked you into thinking the Ebay fees were really high. They weren't. They were normal.
broto_64
·2 years agoFinal Value fees are charged on the total sum of item price PLUS shipping.
dbfolks166mt
·2 years agoLooking at your sold item if I had purchased the item the shipping cost to me would have been as shown below. Virginia has a 6% sales tax in my area so assuming your shipping cost was actually the same as what I would have paid yes the effective eBay FVF % is a bit above what is stated in the policy.
As for how much eBay makes I never really worried too much about that I am more focused on my ROI. EBay is a business just like I am the major difference is eBay's responsibility is to maximize their value to their shareholders. For me I am the only shareholder. Like any business eBay has expenses just as I do so what they are making is all relative. I fine eBay's fees to be one of the smaller of my selling expenses. COGS and taxes are generally at the top of that list.
soh.maryl
·2 years agoSo your previous 23 years of experience selling here gave you no insight as to what the final value fee would be? How about the information that eBay offers about various fees?
tobaccocardyahoo
·2 years agoOn any site, the more your item weighs, the more the shipping costs, and the higher you pay in fees on the shipping. Whether it is a FVF or a credit card interchange fee.
The higher the sales tax rate is in the destination state or city, the more you pay in fees on the sales tax.
Whether it is a FVF or a credit card interchange fee.
If you calculate the fees as a percentage of the actual sell price, your percentage paid will always be higher than the calculated FVF rate.
No deception is required.
I often see listings on Ebay which are economically unjustifiable. It is reflex to assume that those who discover they are selling items which make no business sense, to complain about Ebay fees.
Some of us make our decisions what to sell on numbers other than percentages. My minimum price is based on a dollar margin target. Sell price - fees - cogs. If it does not meet the goal, it is not listed. There is usually a little extra in the price to support a small discount for sale events or accepting offers.
As for being an Ebay cheerleader. At this moment in time, Ebay is the best venue on the Internet to sell what I sell. It wasn't a few years back, but other venues made it harder to list what I want to sell there, and buyers decided it wasn't a good place to find it.
Ebay varies as a venue to sell on, based on what you want to sell, how competitive with the entire world you are, and who the buyers for the item are.
Some Ebay sellers are not important to Ebay because there are few buyers for what they sell, or the buyers for what they sell have higher standards than some of the Ebay sellers.
ebeths_eclectic_collectibles
·2 years agoAnd some items are not with selling due to price/weight consideration and are better off sold for local pickup on FB marketplace. Of course sometimes you just have to bite the bullet, pay the fees and earn some money
yoonix1
·2 years agoEBay is transparent on all fees. Roughly 20% of the sale goes to EBay ( for fees, subscription, etc), not including shipping cost. In your case you're over this 20%. I wonder what happened.
soh.maryl
·2 years ago"Subscription"? The cost of a subscription to a store is NOT part of the final value fee.
adkhighker
·2 years agoCorrect. Whoever said that is mistaken. That would not be fun if eBay ever started charging a fvf on our stores.
tobaccocardyahoo
·2 years agoI believe many sellers did not know what they were paying in fees when the PayPal fees were separate from the Ebay fees.
Ebay Managed Payments has opened a lot of eyes to what has been the case for a long time.
It is true that the marketplace facilitator tax has exacerbated the problem. Ebay decided not to be an unpaid tax collector, and that means the seller pays for that service. I always resented being an unpaid tax collector for the state I was operating in, and had no option but to do it.
I now live and operate in a no sales tax state.
When the cost of shipping is close to or more than item price, it is a dubious choice to offer the item, especially if it is going to most coastal states or older cities.
Most of my items are small enough to fit in a half inch tall mail slot in the lobby of my building. This was buy design. None of my items are short margin.
I have thousands of items which do not meet my current strategy. In the past, my solution to items which were not suited for online sales was in-person auctions. Most of my auctioneers who ran them are not running any more. I may have to have an on-site auction run by one of these auctioneers in the spring.
Remember most buyers will adjust what they are willing to pay for an item to allow for shipping costs. The Ebay fees have the same effect on your profit and my profit as the shipping costs, which have just had their annual increase.
adkhighker
·2 years agoI believe many sellers did not know what they were paying in fees when the PayPal fees were separate from the Ebay fees.
The same can be said for a lot of the ones on this forum who are the first ones to holler at someone who's been here for over 20 years, scolding them that they ought to know how eBay works, when it's clearly obvious the OP knows more about how it works than the ones doing the scolding. Half of those eBay cheerleaders don't even know themselves that 13.25% in fees often ends up costing sellers twice as much as 13.25% or more. At least the OP can see it just isn't worth it to sell something at such a high percentage of cost to sell, which as far as I can tell was the point of their post.
hartungcards
·2 years ago"Half of those eBay cheerleaders don't even know themselves that 13.25% in fees often ends up costing sellers twice as much as 13.25% or more."
This must be some of that "new math" that I don't understand.
coastaltechsolution
·2 years agoIt is the new "I did not calculate before posting"
How many times have we seen here a seller upset because they had to "buy" the shipping label after a sale when they charged the buyer for shipping.
ðŸ˜
inhawaii
·2 years agoMy 13.25% in fees comes out to exactly 13.25%.
I must be doing something wrong. 😉
adkhighker
·2 years agoAnyone who can't figure out that there's a difference between 13.25% fees and what it actually costs to sell something here, then yes, they're doing something wrong, lol.
dbfolks166mt
·2 years ago"Half of those eBay cheerleaders don't even know themselves that 13.25% in fees often ends up costing sellers twice as much as 13.25% or more."
This must be some of that "new math" that I don't understand.
You are 1/2 correct. There is an effective FVF percentage that is slightly higher than the 13.25% stated by eBay. This is due to the FVF's being applied to the sales tax, which eBay clearly states. Generally the effective eBay FVF %, when the stated rate is 13.25%, comes out to actually be between 13.25% for states with no sales tax and 16% for states that have 10% sales tax. The exact percentage of course depends on the price of the item but it is twice as much unless the seller is promoting their listings or has other self imposed fees.
soh.maryl
·2 years agoDid you mean to say that "it is not twice as much . . ."?
dbfolks166mt
·2 years agoDid you mean to say that "it is not twice as much . . ."?
If you are talking about just the FVF's then yes I may have incorrectly typed. If you are talking about selling costs that is a different animal. That is the problem with a lot of these postings the two are never separated and the math is one incorrectly in calculating the fees which are a bit above the 13.25% published rate but are NOT twice as much.
isaiah53-57
·2 years agoAnd you are only 1/2 correct, because you want so desperately for the shipping cost the buyer paid $36.90 for in this transaction to be true revenue, which it isnt. Was shipping revenue before we didnt get charged a fee on it? No - There was a line item for it on our tax form, now it is artificially built into the gross revenue.
The seller did not come here to sell his $71.90 item artificially inflated in value due to the shipping cost, he came here to sell his $35.00 item - If someone did a "local pickup" on the item, would it still be a $71.90 item? Of course not, because it NEVER WAS a $71.90 item.
Your "ebay effective fee" is based on a percentage of a figure with sales tax taken out because the seller never sees that money - But in truth, the seller never "SEES" the shipping cost the buyer paid $36.90 for - A seller retains NONE OF IT as profit - In your example above, you show the buyer paid $36.90 and the actual cost to ship was $36.90. And in reality, when you account for "shipping related costs" such as shipping material, gas, and most importantly YOUR TIME, shipping is ALWAYS a wash or a loss.
So since you willingly base your effective rate on a number minus dollars you never see by taking sales tax out, when doing a quick accounting for profit, (not formal end of year accounting, which we have no choice but to do), you can just as easily base the effective rate on a dollar amount minus other costs ebay has their fingers in that you never see, such as the shipping cost...Especially when considering the ONLY profit bearing figure in this transaction is the items price.
The true "ebay effective fee" of $10.40 against the item is 30%.
mam98031
·2 years agoSome do what to complicate the FVF calculation and it simply is not necessary. Ebay charges 13.25% in most categories on the total amount received from the buyer, period. Whatever the buyer pays for the item is what the 13.25% FVF is calculated on. THEN Ebay adds the 30 cent fix fee per transaction, regardless of the amount of the transaction.
You are trying to calculate different numbers. The "effective fee" is NOT Ebay's FVF. You have to manipulate the number to arrive at that value.
IDK why some what to complicate the Ebay FVF calculation, it is simple and straight forward. Rearranging numbers or adding other number into the calculation get you different outcomes, like profit, COGS [cost of sale] etc. But Ebay's actual FVF calculation remains the same.
Calculating other numbers is important to understanding if you are making a profit or if selling certain things are worthwhile, but even in trying to figure that out, Ebay's FVF calculation is what it is. It is stable and it is constant.
adkhighker
·2 years agoNobody is trying to complicate anything. Everyone knows that eBay's FVF calculation is exactly what they say it is and is correct to the penny for whatever fee category they charge. There's no reason for you to flip out anytime someone explains that the percentage of what it actually costs to sell an item is whatever percentage it turns out to be for any transaction. For the numbers given to Isaiah53-57 in the example they used, the 30% percentage rate for what they were referring to is absolutely correct. No one is saying eBay is cheating or that they're charging more than they advertise. And yes we know that eBay is completely transparent in the fees they charge.
adkhighker
·2 years agoisaiah, you are correct that the "ebay effective fee" is 30% as far as using the numbers in dbfolk's line item numbers where they have the seller/revenue payout as $24.60. But the OP has their payout after fees as being $21.40, not $24.60, which means they ended up with $13.60 less than their selling price, not $10.40 less, right? So if the OP is correct that their payout was only $21.40 shouldn't the "true ebay effective fee", as you call it, be 38.8% in their case? Your calculations are correct for the numbers in dbfolk's line item spread, but I'm just wondering if the "$24.60" should have been "$21.40" since that's what the OP said their payout was.
dbfolks166mt
·2 years agoisaiah, you are correct that the "ebay effective fee" is 30% as far as using the numbers in dbfolk's line item numbers where they have the seller/revenue payout as $24.60. But the OP has their payout after fees as being $21.40, not $24.60, which means they ended up with $13.60 less than their selling price, not $10.40 less, right? So if the OP is correct that their payout was only $21.40 shouldn't the "true ebay effective fee", as you call it, be 38.8% in their case? Your calculations are correct for the numbers in dbfolk's line item spread, but I'm just wondering if the "$24.60" should have been "$21.40" since that's what the OP said their payout was.
The difference in the payout is due to the fact that OP never revealed where there buyer was located so I had to make an estimate on the sales tax rate. OP also never stated what they actually paid for the shipping label which I am assuming they purchased through eBay otherwise their payout would have been higher. Of course they would have had to purchase the label elsewhere assuming out of that profit. However, just looking at it from the eBay segment it would look like the following. There is NO getting around the fact that the seller received the funds paid by the buyer for this shipping and it is revenue plain and simple.
dbfolks166mt
·2 years agoAnd you are only 1/2 correct, because you want so desperately for the shipping cost the buyer paid $36.90 for in this transaction to be true revenue, which it isnt. Was shipping revenue before we didnt get charged a fee on it? No - There was a line item for it on our tax form, now it is artificially built into the gross revenue.
Shipping paid by the buyer to the seller has ALWAYS been considered revenue. If you get the IRS to change that and remove that from the Gross Revenue on my 1099-K then I will agree with you along with adjusting my cost odels.
The seller did not come here to sell his $71.90 item artificially inflated in value due to the shipping cost, he came here to sell his $35.00 item - If someone did a "local pickup" on the item, would it still be a $71.90 item? Of course not, because it NEVER WAS a $71.90 item.
Apples and oranges but if you wish I can rework the cost model to show you those percentages.
Your "ebay effective fee" is based on a percentage of a figure with sales tax taken out because the seller never sees that money - But in truth, the seller never "SEES" the shipping cost the buyer paid $36.90 for - A seller retains NONE OF IT as profit - In your example above, you show the buyer paid $36.90 and the actual cost to ship was $36.90. And in reality, when you account for "shipping related costs" such as shipping material, gas, and most importantly YOUR TIME, shipping is ALWAYS a wash or a loss.
Something you cannot be sure of. The OP never returned and said what they paid for the actual shipping label. In most cases the shipping the buyer paid is always greater than what the seller paid for the actual shipping label. That difference is net profit and fully taxable by the IRS.
So since you willingly base your effective rate on a number minus dollars you never see by taking sales tax out, when doing a quick accounting for profit, (not formal end of year accounting, which we have no choice but to do), you can just as easily base the effective rate on a dollar amount minus other costs ebay has their fingers in that you never see, such as the shipping cost...Especially when considering the ONLY profit bearing figure in this transaction is the items price.
Again apples and oranges. You are correct the sales tax is taken out of the revenue figure since the seller never sees the money. The difference is you do see the shipping money the buyer pays you and it is included in your 1099-K gross revenue where the sales tax is not. As you stated, and as the IRS looks at it, shipping is revenue and an expense.
The true "ebay effective fee" of $10.40 against the item is 30%.
Sorry but we will have to continue to disagree on this one.
isaiah53-57
·2 years agosoh.maryl
·2 years agoWhat are "older cities"? And why is the shipping cost more to those cities? And isn't the buyer expected to pay the shipping cost?
adkhighker
·2 years agoI was wondering about the "older cities" as well. Everything else in that post was very well stated, so I'm guessing that the "older" part was just a typo.
laststopgeneralstore
·2 years agoThat's your fault. Seeing as you've been on here for 23 years that means you've accepted and read the updated terms and conditions and seller updates roughly 46 times. Looks like you also charged the exact amount in shipping that it costs to ship out the item which means right off the bat you lose almost $4 in fee's just to shipping, not including fee's taken out of the item price & taxes. Next time calculate what you actually need to charge so you come out on top instead of ending up with less than expected and proceed to blame eBay for your lack of due-diligence even though they lay everything out very clearly for us.
johnson_junk_company
·2 years agoFudging shipping costs to save on FVF’s is against those lovely “terms of service†you’re trying to use to make your point……
stainlessenginecovers
·2 years agoWhere did you get that wrong information from?
What do you consider 'shipping costs?? Just the label?
If a label cost $10, seller needs to add at least $4 ($14 total to the customer for shipping) to cover 14% ebay Fees, cost of box, bubblewrap, tape, label, ink etc.
This site allows a seller to use 'Calculated' and then ADD a Handling Fee- which is obviously MORE than what the shipping label costs
yuzuha
·2 years agoExactly. Shipping is more than just the cost of the postage itself.
coastaltechsolution
·2 years agoYou are correct
Material and time need to be considered in the equation
Also sellers should also be keeping track of supplies and mileage for taxes
fab_finds4u
·2 years agoWhat do you mean exactly by fudging shipping costs? Charging more than actual shipping?
It's allowed.
Many sellers charge the buyer retail but pay for discount shipping.
Many sellers also add a handling cost to the shipping.
Is that what you mean by fudging?
There is no saving on FFV's. It's based on the total cost the buyer pays.
Excuse me if I'm wrong but it looks like you didn't know that.
laststopgeneralstore
·2 years agofudging shipping costs? what are you talking about? Explain in detail without a doubt how what I said not only goes against terms of service but is also "fudging" them to save on FVF's.
Making sure you charge enough in shipping to cover back end expenses as well as the label is not "fudging" and does not go against any terms of service. It's basic business 101. Make sure you're charging enough to cover all expenses. If you're charging the exact amount to the customer that it cost's to ship the item, your effectively losing money on every single transaction and that's your fault.
adkhighker
·2 years agoIf you're charging the exact amount to the customer that it cost's to ship the item, your effectively losing money on every single transaction and that's your fault.
That's not necessarily true, especially for anyone doing auctions. I always charge exact calculated shipping cost and I never lose money because my buyers are smart enough to know that the lower the shipping cost is for them, the more they'll pay for it.
adkhighker
·2 years agoWhy is it the OP's fault? What did they do, other than realize it costs too much to sell an item in that price range that requires a high shipping cost? That's their fault for seeing the writing on the wall? And where do you get that the OP was blaming eBay? I didn't see them blaming eBay. All I saw from their post is that they are smart enough to reconsider their selling options moving forward. I don't blame the OP at all for reconsidering their selling options when the cost to sell here in nowadays is obscenely higher than it was more than 20 years ago for them.
fern*wood
·2 years agoThey seemed angry that "these people" were making more than they were. I assume they meant ebay, which seems to blame ebay.
adkhighker
·2 years agoYes, I believe that "these people" meant eBay, too, but I didn't see the OP blaming eBay. It looks pretty clear to me that the OP was just saying it was wrong for them to continue selling something like that if it was going to cost that much to sell it. It wasn't like they said eBay were crooks or anything.
janet9988
·2 years agoThe OP's post title was FINAL VALUE FEES. Also the OP stated after the FVF were taken out they were left with .... nothing else outside of FVF were mentioned . The OP is doing something wrong or does not understand what the term Final Value fee actually means.
adkhighker
·2 years agoThe OP's title is actually Final Value Fees are Insane, but I hear ya, and that's a good point you make. I do think people could be more clearly taken if they would differentiate more often between final value fees for selling any particular item and the actual cost of selling that item, which are two different things. Maybe if their title had been The Cost of Selling Here is Insane rather than Final Value Fees are Insane, things might have gone more smoothly.
soh.maryl
·2 years agoRespectfully, have to disagree. It's evident that the OP did NOT see the "writing on the wall". The writing on the wall included the information about how eBay fees are calculated. Although it's available for anyone to read, and especially should be read by sellers before pricing their item, it looks like the OP may have skipped that step for some reason.
adkhighker
·2 years agoI think the writing on the wall that the OP saw was that it wasn't worth it for them to sell something heavy with a relatively low selling price due to the higher shipping cost involved. But yes, you could be right that they weren't aware of how everything is calculated as far as their fees. If they weren't aware about it then, they are now.
mam98031
·2 years agoA seller does not have to stated the exact amount it will cost them to ship the item when a buyer purchases it. That is a mistake many sellers make. You are allowed to have a reasonable handling fee which is why this subject has been known as S&H [shipping and handling] for decades.
If a seller chooses to set the price they are charging the buyer for shipping at the exact or near exact cost of the shipping to the seller that is perfectly fine, but they need to consider the FVF on the shipping when calculating what to charge for the item they are selling because it is a cost they have to pay.
theteamsetguy
·2 years ago@mam98031 ,
Exactly!. I've always charges a flat rate shipping to keep things simply. On some orders I come out ahead and some I lose a little bit. At the end of the day I just want the shipping I collect to cover the actual shipping, 30 cent fee, FVF on taxes, and FVF on shipping. I charge $3.75 for one item and 50 cent for each additional item. Most of my items weight about 2 ounces. I collect on average $5.25 per order on shipping because most of my buyers purchase more than one item.
According to Pirateship my average actual shipping per package was $4.28 last year. My shipping supplies are pennies because I buy bubble envelopes by the case of 500 that costs 6 cent each. I will be raising my shipping to $3.99 plus 50 cent for each additional item shortly to cover the recent postage increase when i get a chance to change them on all 6,500 listing which takes a little time.
lilyswan2
·2 years agoso don't supermarkets yet a lot of people complain about rising prices...if op or any seller feels the fees are unjust they have the right to complain...that's how things can maybe be changed...going along with something does not equate to agreement with it...
monroe67
·2 years ago" . . . I have been selling on Ebay for over 23 years and just recently I sold a Sirius boombox with the receiver in great condition. Was listed for $35.00 after the fees were taken out my pay to me was $21.40 **bleep** am I not seeing something is wrong here??"
This type of question always makes me wonder if the seller has never paid any attention to eBay's Order Details on any other sale they made during the past 22 or 23 years. No, only this most recent sale brings up questions about eBay's fees.
The only thing that "is wrong here" is the seller's knowledge, understanding, and acceptance of eBay's fee structure. If I had been the buyer of that boombox: in addition to $35.00 for the boombox, it would have cost me more than $36.00 to have it sent to me. That's $71.00. Then, I would have to pay sales tax on $35.00. That would have been an additional $2.71, for a total payment of $73.71.
Using those numbers, with the assumption that I had purchased that boombox, the seller would have netted about $24.93. The sales tax percentage in my area is less than 8% and my state (California) does not tax postage paid by the buyer.
Assuming the buyer was in a state with closer to 10% sales tax that would apply to both the boombox and the postage:
a $21.40 payout seems reasonable.
Like many other sellers, including "toysaver", my selling ID takes the position that my buyers pay my fees.