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Shipping charges included in final value fee
Why do final value fees include shipping charges?
The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees.
28 comments
kh-gary
·3 years agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.
Thank you for understanding.
mam98031
·3 years agoYes, for EVERY seller that entered Managed Payments on or after August of 2020. It has been going on for years. Before we paid it in MP, we paid the fee to PayPal as they charged it too.
doc-holmes
·3 years agoIf ebay had one set of rules for people that purchased their label through ebay, and another set for people who pay at the post office like me, you'd then see a rash of "Ebay discriminates against people who purchase their own postage! Is this even legal? I'm gonna start a class action..." You get it.
luckythewinner
·3 years agoFor four reasons:
1) To prevent sellers from avoiding fees by lowering prices and raising shipping costs;
2) To remove the financial penalty for sellers offering free shipping;
3) Because eBay makes more money for the shareholders;
4) Because sellers here have largely continued to use the site since this was introduced
Note that in the old days, PayPal calculated their fees the same way. Credit card companies have charged their fees that way for 50 years.
dbfolks166mt
·3 years agoFor four reasons:
1) To prevent sellers from avoiding fees by lowering prices and raising shipping costs;
2) To remove the financial penalty for sellers offering free shipping;
3) Because eBay makes more money for the shareholders;
4) Because sellers here have largely continued to use the site since this was introduced
Note that in the old days, PayPal calculated their fees the same way. Credit card companies have charged their fees that way for 50 years.
This is one of those great canned answers that you should save and copy and paste into every post on this forum the complains about FVF's on shipping. I have several I use for identical questions that seem to come up at least once a week, often times more.
tdrake
·3 years agoEbay, and it's payment processor Adyen, operate the same as all retailer payment processors. The fee charged is for 100% - that's every penny - of the money collected and processed. The money is not itemized, it's every cent.
When you pay someone, whether it's a mail order business, grocery store, gas station - you name it - with a credit card, that money goes through a processor. When you buy your beer and cigarettes at the corner store with a credit card, the card processor charges the store for the full amount charged, including sales tax. Plus, more than likely, a transaction fee and maybe a monthly fee to boot. When you pay your tab at the local bar or restaurant with a credit card and you include a tip, the establishment's payment processor charges a fee for the whole amount - every penny - including tax and tip. No itemization, one number - fee is on the total amount. When you buy from online business, say LL Bean, and pay shipping and possibly tax, LL Bean has to pay their processor for processing the whole amount, including shipping $ and sales tax $.
I know, you think eBay is "different" and have people working night and day finding ways to screw you, and nothing anyone here says will change your mind. But yet... you keep coming back to sell, despite the fact that there is no law compelling you to do so.
dgatesca
·3 years agoYou just listed a ton of retail establishments for explain your narrative. Ebay is not a retail business. They have no stores, no delivery vehicles, no sales force out in company vehicles. They are an e-commerce site and nothing else. Their overhead if FAR lower than every example you gave. And by the way, other companies aren't charging an additional 14% when someone makes a purchase. Your comparisons and your math are wrong.
mam98031
·3 years agoI agree that Ebay is not a retail type business at least not a brick and mortar store. But that doesn't mean Ebay doesn't have overhead and lots of it. There are buildings for their employees and office equipment. I can imagine that the computer hardware it takes to runs a site this size is pretty substantial as well. Then there are the benefits and paychecks for those 11,000+ employees.
Ebay has plenty of overhead to cover. It may be different types of costs from a brick and mortar, but overhead all the same.
slippinjimmy
·3 years agoOf course eBay has lots of overhead but much less than most B&M retailers. On the other hand, eBay works on about 12% gross margin on the total GMV, I don't know of many retailers that could survive on a 12% gross margin, for most it wouldn't even cover their rent.
mam98031
·3 years agoI doubt it. The expenses may be different but that doesn't mean it cost less. Now for sellers here the overhead is lower, but as for Ebay, doubtful.
As I said before a B&M has their building lease or owned expenses, Ebay has office space to for employees. A B&M will likely have a few computers, Ebay will have 1,000s of them not to mention the Servers to support everything. And the list just goes on.
It is fine, we can disagree on this.
monroe67
·4 years ago"Why do final value fees include shipping charges?
The total amount of the sale includes the item price, any handling charges, the shipping service the buyer selects, sales tax , and any other applicable fees."
Once upon a time, a long time ago, when eBay was just a startup, a plan, a dream of a great way for people to sell, oh, old textbooks that had been sitting on a shelf for 15 years, one of eBay's founding principles was a belief that: People are basically good and honest.
Because eBay officially believed that, in their early years eBay trusted sellers to list items at true and valid prices with -- here's the thing -- true and valid postage amounts. And eBay's original fee structure charged sellers a fee based on ONLY the cost of the item. (By the way, this was well before eBay was required to charge sales taxes on sales.) So, back then, a seller might list two old textbooks for $29.99 and what seemed to be a reasonable, true, and valid postage amount of $9.00. Back then, a buyer could actually write a check for $38.99 and put it in the mail to the seller. Ah, the good old days. But I digress . . . . .
And the seller was charged a Final Value Fee on only the $29.99, the cost of the books. Because the seller was a good and honest person and followed the plan that eBay had in place at that time.
But in those days there were, believe it or not, some people in the world who were not good and honest. (I know!) They saw that eBay would charge a fee on only the cost of the item and not the cost of postage that was in the listing. And they thought, "Hey, I can get rid of those old textbooks and get some good money for them!" So a lot of those bad people started taking advantage of eBay and its corporate official trusting nature.
Some of those dishonest people would do things like list two old textbooks for $8.99 and $30.00 postage. Some of those dishonest people might list their mother's wedding gown for $10.00 and $900.00 postage. And lots of other really outrageous listings. Of course, actually mailing that wedding gown didn't really cost $900.00. A dishonest seller would pocket, maybe, $850, without paying eBay their fee on that money.
Finally, eBay figured out what was happening. eBay had to admit that NOT every seller was good and honest. eBay did have a policy in place that would punish sellers who engaged in Fee Avoidance, by charging low prices with high postage. That was a lot of work, trying to check out e-v-e-r-y listing to catch the cheaters.
So eBay decided they had to do the only thing that was good and honest and rightful: eBay started including postage and/or other shipping charges in the Final Value, the amount on which eBay charges fees to the seller. Even to sellers who list a reasonable, true, and valid postage amount.
Just like in grade school: When one child acts up in class, the whole class can be punished.
That is why we sellers now have to pay a Final Value Fee on the total amount paid by the buyer, including postage.
geologicalspecimensupply
·3 years agoHowever, when we purchase shipping labels from eBay, they know that the money is going to the shipper and not into our pockets. In this case, the final value fee on shipping is ripping us off.
If eBay was not selling us the label, they wouldn't know if the shipping amount was honest or not, but because they do sell us the label, that circumvents the seller who would sell an item cheaply with an excessive shipping charge, thus cheating eBay. Instead, eBay cheats us.
blackcount456
·3 years agoHowever, when you purchase a shipping label through ebay, you get them at a discount, and I've found for a priority flat rate box, its almost like 20%. I suppose they assume this offsets the extra few bucks you're paying them on their fee that includes shipping. It's also likely they are getting a discount due to the volume and management of all those orders.
buyselljack2016
·3 years ago@blackcount456
eBay likes to make you think they are doing you a solid by saying "you saved XX by purchasing your label on eBay, but that is just smoke and mirrors.
Discount that you are seeing on that "Priority" is pretty much just the "commercial online shipping label" purchase price available most anywhere online. Some of us (TRS) get a little perk beyond the online price.
There was a recent "extra" discount on Priority labels, but that was just a short time perk.
theteamsetguy
·3 years ago@geologicalspecimensupply ,
Not everyone buys their shipping labels thru eBay. I use pirateship to print my shipping labels because I get the same rates or better and I get to put the charges on my American Express card that gets me 4 points per dollar.
I use the points to get free airline tickets. I average more the 2 cents per point in value when I redeem them.
sapphire_studio
·3 years agoI just got the Wells Fargo active cash card that's unlimited 2% cash back on all purchases. I should really start doing all my shipping on pirate ship like you and use that card.
theteamsetguy
·3 years ago@sapphire_studio ,
That would make sense. Especially when you spend 2k to 3k a month on shipping fees per month like I do.
sapphire_studio
·3 years agoI wonder if I could get credit card benefits by putting my credit card on PayPal and buying my eBay labels through eBay still and selecting to pay with PayPal instead of my eBay funds. That way I could still get the top rated Plus slight discount on shipping.
geologicalspecimensupply
·3 years agoI also use pirate ship for the same reason. But if we buy the labels directly from eBay, and the buyer pays $8 for shipping, and we buy an $8 label from eBay, the only one getting screwed by a final value fee on shipping is me. There is zero profit there, but eBay acts like there is. That is why we have a totally separate website for the store, with none of the nonsense, the ability to deal directly with customers, take phone orders and accept purchase orders from schools and colleges. It is significantly outselling the eBay store with nothing spent on marketing, and has done so for the past three years.
mybigsale
·3 years ago@garbagegrrl*z
@geologicalspecimensupply
I also use pirate ship for the same reason. But if we buy the labels directly from eBay, and the buyer pays $8 for shipping, and we buy an $8 label from eBay, the only one getting screwed by a final value fee on shipping is me.
In today's marketplace, every postage processer like Pirateship updates eBay shipping for packages sent. IF eBAY wanted Piratebay and others could easily pass postage cost to eBay for seller postage fee credit. eBay could also count seller shipping costs from "Free Shipping" sales from seller eBay postage costs or costs past back from 3rd party Postage Vendors (Pirtateship etc)
eBay is NOT LIKE every other seller like Walmart etc. Everybody charges the 2-3% processing fee. eBay charges the "ONE FEE" that combines processing fee PLUS A HIGH COMMISSION.
eBay earns the processing fee PLUS HIGH COMMISSION on postage (and tax) because they have done it in the past and vocal eBay Sellers defend this overpayment more than eBay.
They get a "second portion" of commission on shipping and tax since they started adding shipping and tax last June in calculating promoted listing ad rate charges.
theteamsetguy
·3 years ago@mybigsale ,
Promoted listing is optional and most sellers don't use. Therefore, ebay charging promoted listing fee on taxes and shipping doesn't apply to most sellers.
Also, I believe the third party postage sellers only forward the tracking number to ebay.
mybigsale
·3 years ago@theteamsetguy
Promoted listing is optional and most sellers don't use. Therefore, ebay charging promoted listing fee on taxes and shipping doesn't apply to most sellers.
Correct. Sellers that do not use promoted listings just overpay commission once on shipping and tax. Sellers that use promoted listings pay another fee again on tax and shipping.
Also, I believe the third party postage sellers only forward the tracking number to ebay.
Correct. eBay has no interest in receiving cost of shipping as eBay has no interest in crediting sellers shipping paid so they do not overcharge sellers commissions. IF eBay wished to calculate the "COMMISSION" correctly, the 3rd party vendors could easily pass the information to eBay.
dgatesca
·3 years agoYour reply nails it exactly. And for those that say it's just how Ebay does things now, I'd respond that it's also why fewer people are using them. Buyers and Ebay do well, but it's always the sellers that get the shaft.
mam98031
·3 years agoEbay has been doing this for about 13 YEARS. If it bothers you that much, why wait over a dozen years to complain. Besides it is industry standard. The other sites similar to Ebay were charging FVFs on shipping BEFORE Ebay started doing it.
OLD OLD OLD subject. You just need to get past it.
nobody*s_perfect
·4 years ago(1) To avoid penalizing sellers who offer free shipping (which means they have to add the shipping cost to their item price). eBay wants to encourage sellers to offer free shipping.
(2) Sellers used to avoid fees by undercharging the item price, and then inflating the shipping cost. Like $1 item and $50 shipping.
eBay has been charging a final value fee based on the buyer's entire payment, including shipping, since 2011.
mynewandusedstuff
·3 years agoThats actually not true, it was an excuses ebay had to make extra money. most shipping is done via ebays managed shipping discount portal, which they know how much you actually spent on shipping. that portion they could choose not to charge FVF, but they played dumb knowing most people wont realize and rake in the profits. The 30cent they charge on top of each transaction, is the actual overhead cost to run, servers/employees/accounting/legal cost/insurance ect.
nobody*s_perfect
·3 years agoIf eBay excused only sellers who used their own shipping labels, they would be accused of being coercive. Many sellers use alternative online postage resources, especially larger Sellers who sell on many venues and thus use one non-eBay source for all of their shipping. Others choose to use companies such as Pirateship which offer services that eBay does not, such as Priority Mail cubic. I have no idea what proportion of sellers use eBay's own postage labels; I don't know how you could even estimate that.
sakic92710
·3 years ago1) They do not offer free shipping. They hide it in the total price. Why penalized those who make it clear what the shipping cost is?
2) They temporarily suspend then permanently ban those you try to cheat the system. Instead, eBay went for the greedy option to make EVERYONE pay extra for something they do not even provide a service for.
If there was not a % paid to eBay for the shipping, it is not my problem if sellers choose to sell items for $30 with free shipping instead of selling for $20 + $10 for S/H. If they choose to pay the extra FVF on that $10 then let them do as they please.