Final Value Fees on Shipping and Taxes Inherently Unfair

[thriftiquetrader57]

I've read many comments on Final Value Fees placed on orders which are to not the item itself, but to sales tax and shipping in total. I've read the complaints. I've read the explanations. The unfair truth is in the math itself. I do large orders. I do small orders.  The following example is on a $6 item which included free shipping and $.41 tax:

What you earned

Order total

$6.41

eBay collected from buyer

Sales tax

-$0.41

Selling costs

Transaction fees

-$1.47

Shipping label

-$4.81

Order earnings

-$0.28

On this particular order you see that I made $0.28. Ebay made $1.47.  Absurd right? Why? Because Ebay made more money off the sales and shipping in combination with my item than I did on just the real value of the item. Totally unfair. I know it's their platform. And I appreciate the opportunity to sell on this great plafform, But sellers are  being taken advantage of. 

[lakefor94]

Low value items with Free Shipping will always be a struggle, margin wise.

Sellers are just going through the motions with that type of Item. 

[soh.maryl]

The current fee schedule has been in place now for several years and is not kept a secret from sellers.

Most experienced sellers here agree that selling any item for less than $20, especially with F/S, is a losing game.  

[thriftiquetrader57]

I just wanted to amend my previous post. Without shipping and tax the $6.41 order place the retail price of the item I was selling at $1.75 where Ebay's cut essentially became $1.47 while I received $0.28. 

[bonjourami]

That sounds about right for a $6 listing.What did you expect to make?

[fab_finds4u]

Wherever you shop online or in person in a walk in retail store, when your purchase is rung up the  store's credit card/payment processor charges the store a fee based on the total cost. This is how payment clearing houses work.

ADYEN  Is the payment processor for eBay. They process the  payment and they don't  do it for free. eBay makes sure the money ends up in the right pockets and they don't do that for free. 

You know how  it is, everywhere you go somebody has their hand out.

[soh.maryl]

Your message is confusing to me, but will try to respond without being sounding snarky.

You have been an eBayer since 2012, so 11 years.  Not sure how long you have been selling, but was this the first time you noticed the fees? 

The FVF has been charged on shipping since, I believe, the late 90s, perhaps earlier.

The FVF on the state sales tax has been charged since about 2021, again maybe earlier.

It coincided with the Supreme Court ruling that allowed individual states to levy sales tax on internet sales.  eBay collects those funds and remits them to the individual state treasuries.  As the individual states enacted legislation enabling them to do so, eBay began collecting and remitting these funds. There are now, I think, about 47 states who are enrolled.  

[thriftiquetrader57]

Hello,

   Thanks for your response and not trying to be "snarky" as you stated in your reply to me, I never stated that this was the first time I had noticed the, what I believe unjustified fees attached to both shipping and federal taxes. This is however, the first time I have vented my displeasure with this policy on this forum board. I don't need to be told where the money goes in regards to state taxes. My post never complained about that. It is what it is, and I understand the states are entitled to their money. I find it interesting that you never addressed the issue of how a seller can sell an item and receive only 25 percent of the final sale revenue while eBay receives 75 percent? BTW,  I notice that you are a very active responder to seller's issues and complaints and wonder, if you are not a seller, are  you a moderator who responds on eBay's behalf? Not being "snarky" of course 🙂

[monroe67]

OP posted:  "I've read many comments on Final Value Fees . . . .  I've read the complaints. I've read the explanations. The unfair truth is in the math itself.  I do large orders. I do small orders.  The following example is on a $6 item which included free shipping and $.41 tax:

What you earned

Order total

$6.41

eBay collected from buyer

Sales tax

-$0.41

Selling costs

Transaction fees

-$1.47

Shipping label

-$4.81

Order earnings

-$0.28

On this particular order you see that I made $0.28. Ebay made $1.47.  Absurd right? Why? Because Ebay made more money off the sales and shipping in combination with my item than I did on just the real value of the item. Totally unfair. . . ."

I don't usually copy so much of a post that I respond to but, in this case, I think it's necessary in order to  try to convey the points I wish to make.  

First of all, OP, you did not make $0.28 on this transaction.
See that little "minus" symbol in front of $0.28, your "order earnings"?  It means a negative 28 cents.
OP, you OWE 28 cents to eBay.

The second point is -- in this particular sale, the absurdity  lies in "free shipping" of an item that the OP actually had to pay $4.81 to (presumably) the United States Postal Service.   Look at your numbers again.  

Your buyer paid $6.41.  We know that 41 cents will be sent to the buyer's state, as sales taxes.  Subtotal is $6.00.
eBay's fees came to $1.47.  $6.00 minus $1.47 = next subtotal of $4.53.
USPS needed $4.81 to deliver the item to your buyer.  Subtotal of $4.53 minus $4.81 = negative $0.28.
Again:  The OP owes 28 cents to eBay.   

None of the above is eBay's fault.  Nor is it the fault of the USPS.  Math is not inherently unfair.  

The way to fix situations like this in the future is not to list anything else with "free shipping."  Free shipping does not exist.  

[soh.maryl]

As I mentioned, when a seller lists low-priced items and, in addition, offers free shipping, he should be able to see that he is shooting himself in the foot because there is almost nothing that anyone can ship anywhere via any courier for any less than $3.  That's how the seller can receive so little.  And, that 75 percent that you feel eBay receives, if you are referring to the shipping fee and the state sales tax, eBay DOES receive it, yes, but the shipping money goes to the courier and the sales tax goes -- well, you know where it goes.  

This does not involve Federal taxes.  The state sales tax is what the buyer pays based on his delivery address and the state sales tax is included in the total upon which eBay bases their FVF.

Actually, you have no idea whether or not I am a seller.  eBayers can have several IDs and many do, maybe one for selling, one for buying and one for posting on the Boards.

No, I am not a moderator nor am I employed by eBay in any way.  eBay employees, who very rarely post on the Boards, are very clearly identified as such.

[soh.maryl]

"The way to fix situations like this in the future is not to list anything else with free shipping."

And also not to list anything to sell as low a $6.00.  

[naeem]

The buyer pays the tax. What was the item? Before you listed it you knew the final value fee was going to be 30 cents for the transaction and around 10% (10.8% here) of the $6 + $4.81 = $1.17

Actually it looks like you lost money.

$6.41  income and they back out the 41 cents tax because the buyer paid that. $6 - $1.47 fees - $4.81 shipping = NEGATIVE 28 cents.

What is the item? You may need to re-evaluate buy it now items and when if at all to offer free shipping.

This was a losing sale the day you listed it unfortunately...... "unless" the $6 was opening bid and you thought bidders would drive it up.

As far as fees go I'm troubled by a 17.5% final value fee I had to pay on the sale of an item. CRAZY too high.

[naeem]

TYPO >>   and around 10% (10.8% here) of the $6 + $4.81 = $1.17

That should have been $6 - shipping (which turned out to be $4.81) = $1.17

Also you should weight and calculate shipping to the furthest zip code from your house. before listing it with free shipping

[monroe67]

". . .  the final value fee was going to be 30 cents for the transaction and around 10% (10.8% here) . . . ."

Just curious:  Where ("here") is eBay's final value fee only 10.8% ?  

Your listings say you are located in South Carolina, in the United States.  
Therefore, your sales are subject to eBay's fee schedule for sellers registered in the United States.  
That Final Value Fee percentage (for most categories) was raised to 13.25% in February of this year, 2023.  

[soh.maryl]

Can you show us the actual figures for the transaction for which you paid an FVF of 17.5%?