EBay fee structure

[tubamirabilis100]

I was confused about how Ebay charges their commission of 12.5%. I sold an item for $165 and was charged $23.94 fees for Ebay's commission. This was way above their advertised 12.5% which should be $20.63.  So I called Ebay to ask for an explanation. It was a very convoluted answer. It turns out that they take out 12.5% from the total ( not the item sale price), which includes tax and shipping. I never heard of a commission for a sale that included shipping and tax. So Ebay is making money off of the fact that I have to pay tax on the sale item as well as making money off of the cost of shipping the item.  I'm not even sure if this is legal but it's beyond greedy and is definitely unethical. I could see a commission on the actual sale item, but the tax, the shipping ??? 

Also, Ebay says they charge 6% sales tax, 6%  of $165 should be $9.90, not the $14.02 they charged me.  The icing on the cake was for Ebay to charge me $7.43 to print out a shipping label even although the buyer had already paid $10.79 for shipping. If I were able to bypass Ebay's shipping and just take the package to the post office, they wouldn't charge me $7.43 to print out a label. What a total rip off.

This has been a good lesson for me. I'm positively done with selling on Ebay. There are other ways to sell things. 

[tdumonde2014]

The buyer paid the shipping to you and you in turn use their money to purchase a shipping label. The Post Office would have charged you the going rate for shipping, the fact that the buyer paid you for shipping on eBay would be irrelevant to them.

[rock.star]

EBay has charged the final value fee on the entire amount for many years .

The buyer pays the sales tax not the seller. 

The is no set sales tax the tax is based on the buyers location. 

[soh.maryl]

The final value fee is charged on the item price, the shipping cost and the state sales tax, if any.

If this were not legal, seems like at least one of the hundreds of attorneys employed by eBay would have noticed it.

eBay's final value fee has been charged on the shipping fee plus the item price for at least 8-10 yrs.

eBay's explanation was that there were some sellers who would list their $100 item for $1 plus $100 shipping, which meant that the FVF was only 10 cents.  

[alcoforever]

You are misunderstanding ebay's fee structure on so many levels, I find it hard to know where to begin.  But.

First, the ebay fee is 12.55% for most categories on the total amount of the sale (item + shipping + tax).   It is perfectly legal and is the same as is done by any money processor such as Visa or Mastercard.  The only difference is the percentage.

The $10.79 the buyer paid for shipping was paid to you, not to a carrier.   Out of the $10.79, you were charged $7.43 for a shipping label so you made a small profit there.   Had you gone to the post office you would have been charged more than $7.43 for your label.

Depending on which state the item was sent, there may have been sales tax on the shipping charge of $10.79.   Most states do apply sales tax to shipping.

As for finding another venue for selling that will give you more exposure and higher prices than ebay, I wish you luck.

[dhbookds]

The icing on the cake was for Ebay to charge me $7.43 to print out a shipping label even although the buyer had already paid $10.79 for shipping.

No, ebay charged you $7.43 for the shipping label.........the buyer paid YOU $10.79......so you actually made (kept) $3+ of what the buyer paid.......because of the discount ebay gives on the cost of labels.

[glasser]

You have a lot of different issues going on here:

1) Yes, eBay charges a commission on the total value of the transaction sale price+shipping + taxes collected.  Yes, eBay has done a horrible job educating to that fact. It's one throw away line in the fees section and most people don't even read or understand. They have been charging the fees on shipping for awhile the taxes are new and may have something to do with the way credit card processors 9read Managed payments) handle payments ( like they only look at total value of transactions not the parts). Illegal? No. Frustrating? Yes. It's like being taxed on the tax but it's a bigger issue then just eBay. Need some business trade organization to fix this like in congress.

2) eBay did not charge you extra for a label. Your buyer paid YOU (not eBay or the PO) for shipping $10.79 and you purchased shipping from eBay for $7.43 so you actually made money of the shipping via eBay's slightly discounted rates. Had you taken to the PO you would have paid $10.79.

[mamica]

 Same here but worse I was out of pocket 33%. It looks like my  almost 30 year involvement with them is about to be over. 

[alcoforever]

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@mamica wrote:

 Same here but worse I was out of pocket 33%. It looks like my  almost 30 year involvement with them is about to be over. 

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Unless you were selling an item for only 99 cents, I would question your math that arrives at 33% out of pocket.

[mtgraves7984]

Yes... eBay's fee is charged on the total: Item + s&h + sales tax (where applicable), then add $.30 per transaction. They've been charging fees this way for quite some time now. Yours sounds about right.

As to the amount of sales tax... that is based on where the item is being delivered (mine is 9 3/4%), not the rate from where it is being shipped from.

As to the shipping label, you still came out ahead. The buyer paid you $10.79, from which you'll keep $9.44. If the label cost $7.43, you got a bit more for handling, materials and your time.

If you're 'out', I understand. But if you understand, then you might stay 'in'.  Good luck to you moving forward.

[coolections]

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@tubamirabilis100 wrote:

Ebayt takes out 12.5% from the total ( not the item sale price), which includes tax and shipping. The icing on the cake was for Ebay to charge me $7.43 to print out a shipping label. If I were able to bypass Ebay's shipping and just take the package to the post office, they wouldn't charge me $7.43.

I'm positively done with selling on Ebay. 

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I cannot believe this day and age people still don't know the fee is from the total expense the buyer pays. With that said your post office does not ship for free. Even if you went to the PO you would still pay.

Don't forget to remove those 8 listed items before you leave.

[releasethekraken_1]

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@tubamirabilis100 wrote:

Also, Ebay says they charge 6% sales tax, 6%  of $165 should be $9.90, not the $14.02 they charged me. 

Sales tax is paid by the buyer.

The icing on the cake was for Ebay to charge me $7.43 to print out a shipping label even although the buyer had already paid $10.79 for shipping.

Your buyer paid you $10.79 for shipping. eBay charged you $7.43 for POSTAGE, not to print a label. They give that $7.43 to the USPS. You keep the extra $3.36. You've sold here before; why is this hard to understand?

If I were able to bypass Ebay's shipping and just take the package to the post office, they wouldn't charge me $7.43 to print out a label.

No, they'd charge you more for the POSTAGE. You get a discount when you buy your postage here.

Looks like you were in need of a good lesson. You don't seem to have any idea how eBay selling has worked for the past decade.

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[buyourextrastuff]

I cannot believe that in this day and age people still don't know that the fee is, essentially, padded over the selling price to include a commission based on costs that do not net a return to the seller. eBay puts P. T. Barnum to shame. 

[coolections]

@buyourextrastuff 

All payment providers charge on the amount transferred. Has nothing to do with Ebay.  Joining a circus ?

[buyourextrastuff]

“… there’s a sucker born every minute.”