Ebay is charging 50% final fees! How is that fair?

[denisemb2001]

I’ve read all the prior kumbaya responses justifying Ebay charging the final fee based on sale price plus shipping, but let’s just tell it like it is.  At first Ebay’s auto listing was putting things I list with a suggested starting auction of $.99.  Well after a couple of things sold at that amount I found myself in a negative position but wasn’t sure why.  I’m not a dealer, just an older person trying to sell off a few collectibles so I don’t have to throw them away or donate somewhere where they will be destroyed.  I raised all of my minimums to $5.00 and am still wondering why I end up with so little.  To charge a final value fee based on shipping is like usary and I do not know why there hasn’t been some sort of action or complaint.  I am buying the label from Ebay so it is not like I have hyper inflated the shipping cost in some sort of covert way.  And this **bleep** that it is to encourage people to offer free shipping doesn’t fly.  12% of the total is still 12% of the total whether it is inflated to hide the shipping cost or is the actual item price plus shipping.  I read lots of people defending Ebay because people were inflating shipping costs etc, but I have used Ebay for purchases for many years and never bought anything with high shipping - that’s on the seller to know what things cost to ship.  This is just a money grab from Ebay.  Tell it like it is - for small items, or heavy items YOU ARE CHARGING A 50%+ FINAL VALUE FEE.  Shame shame shame on Ebay.  I wasn’t selling here for some sort of get rich quick scheme.  I just thought I could recover some of the cost of the items I am selling - most of which were originally purchased on Ebay in the past - Well now they have definately double+ dipped into my pocket.

[clown_car_driver]

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@tobaccocardyahoo wrote:

A $5 minimum sales price is probably too low except for under 4 oz. items, and too low for me with them.

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Most definitely too low.  That is a BIG loser. 

I'd like OP @jerseyboymusic to consider the following:

I sharpened a pencil when I started this adventure, and I do so periodically to update.

But, I figure that the MINIMUM sales price here is about $12.  And that's for a 4oz product. And, that is only IF you charge a fair shipping cost of $3 or $4.  And IF you can buy it cheap. 

Here is a pretty typical sale of a $20 item:

Acquisition cost           $ 1.00

Shipping                             4.00

*Handling/fulfillment    3.00

eBay fees                           4.00     

                                        --------------

                                           $ 12.00

This results in $8 pre-tax profit on a $20 sale.  

That is acceptable to me.

If costs go up (shipping, ebay fees, etc) then my prices go up by the same amount.

I don't pay that - my customer does. 

If costs (prices) get so high as to prevent my customers from buying ... well, then I gotta find something with sufficient profit margin that is small and light and add it to existing inventory and slowly work out of the inventory type that is no longer desired by 'the people'. 

I already did that ten years ago with books. 

I won't 'work' at a loss.  If I'm not making money I'd rather go hunting/fishing, at least I'll be able to feed myself 

1)  You have to remind yourself that every dollar you give in 'discounts' comes right off your bottom line.  In my example above, that means that if I give 10% off on that $20 sale it takes $2 off the bottom line of $12 and that is MUCH more than 10% of MY money.  It is 16% of what I get to keep.  

2)  These are my numbers, you have to know YOUR numbers -- by heart.

3)  You make most of your money when you buy inventory.  Buy low or walk away.  You're a dealer which means you buy wholesale and sell at retail.

I went to school for six years and got two undergrad degrees in business and economics to learn all that - and I just gave it to you for free.   My good deed for the day.

Now: Go forth and be profitable.

* Fulfillment is the process of shipping or delivering a product that a customer has ordered from a retailer. That may sound like just shipping. But fulfillment is more than shipping.

Right from inventory data base creation and management, inventory storage, warehouse management, pick and pack, tracking, order updates, to returns management – it’s all included in the fulfillment process, even supplies.

Fulfillment is the bulk of the work and a lot of the cost in completing an ecommerce transaction.

[monroe67]

"I read lots of people defending Ebay because people were inflating shipping costs etc, but I have used Ebay for purchases for many years and never bought anything with high shipping - that’s on the seller to know what things cost to ship.  This is just a money grab from Ebay.  Tell it like it is - for small items, or heavy items YOU ARE CHARGING A 50%+ FINAL VALUE FEE.  Shame shame shame on Ebay."

It was hard to decide just which portion(s) of the OP's screed to copy into my response here.  
Firstly, congratulations on being a smart eBay shopper who has never bought anything with a high shipping price. 
Most experienced and smart eBay sellers definitely do look into, as you phrase it, "what things cost to ship."  Seems you are kind of admitting here that you did not know how the shipping cost of at least one of your listings has affected eBay's fees and your profits (if any).  

Just recently, a  newer eBay seller posted in another of eBay's community forums that she estimated the shipping cost when writing her listing, then was surprised that the post office needed at least $100.00 more than what the buyer paid as the shipping cost.  (That was only one of her mistakes.)  

However:  eBay's Final Value Fee (FVF) policies do not describe any type of sliding percentages based on the size and/or weight of the item when it comes to shipping it.  There is no eBay fee of 50% "for small items, or heavy items."  (How would one define a "small" or a "heavy" item?)  

eBay's FVF has two portions:  (1) a percentage of the total amount paid by the buyer plus (2) 30 cents per order.  
Your cute mid-century ceramic dust-collectors tchotchkes fall into eBay's general 13.25% FVF.  
Looking at your November sale of a set of 12 vintage elephant tchotchkes, and assuming that I had been the buyer, here's a hypothetical Final Value Fee calculation:

Selling price was $0.99.  (What a bargain!  A dozen elephants for less than 9 cents each!)
Shipping to me in southern California was shown as $6.07.  California does not tax shipping costs -- whew!
Sales tax on $0.99 at my local tax rate of 7.75% rounds up to $0.08.  

The total amount paid by me as the hypothetical buyer would have been $7.14:
$0.99 for a dozen elephants + $6.07 postage + $0.08 sales tax = $7.14.  
eBay is required to send my 8 cents of sales tax to Sacramento to help keep California beautiful. 
I assume $6.07 is the actual amount you paid to eBay for buying postage through eBay.  
That leaves only the item price of $0.99 from which eBay will retain their Final Value Fees.  

eBay's FVF percentage is 13.25%.   $7.14 x .1325 = $0.95 + 30 cents (per order) = $1.25.  
There would have been no money, other than the 99 cent item price, for eBay to retain their full $1.25 FV fees from that transaction.  You would have owed 26 cents to eBay.  eBay would have taken or kept those 26 cents from your next sale.  

BTW, this post is not intended as a "defense" of eBay.  It is intended as an example of how eBay's FVFs work.  It is math.  

[fern*wood]

Even worse, many states like mine also change sales tax on the shipping. 

[soh.maryl]

Although it's pretty clear, at least from the responses to the OP's claim, that "people" here are not just accepting certain "bold accusations" as fact.

Seems like most of us want to see the figures the OP is using to claim 50% FVF.  

[soh.maryl]

It's not "just a different way to look at it".

It's the wrong way to look at it.  

[jerseyboymusic]

I'm not the OP... @denisemb2001  is, but thanks for thinking of me with your very thorough explanation!

[luckythewinner]

Right from inventory data base creation and management, inventory storage, warehouse management, pick and pack, tracking, order updates, to returns management – it’s all included in the fulfillment process, even supplies.

I do not consider inventory database creation, inventory storage, or warehouse management as a cost per transaction - because an item that never sells still incurs those costs. 

To me, those are operating costs similar to administrative costs. They are sunk costs that you pay even if you never sell an item and IMHO it is way too much work to attribute them to a particular transaction. 

[susanb1872]

@soh.maryl  I stand by by explanation that it is a different way of analyzing the information. Neither way is right or wrong-just a different approach.

[gloryglorygifts]

Increasing the shipping cost or the product price is not going to change the percentage charged by ebay. It's currently 13.25% plus 30 cents. You aren't being charged to list the items. 

You do need to increase your prices to absorb the fees, which isn't inflating them, it is business if you want to make a profit.

[fern*wood]

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@susanb1872 wrote:

We all know they are not charging 50% and we all know that the fee is 13.25% of the total paid by the buyer. However, if you sell an item for $1.00 and the fees end up being 50 cents then the fee is 50% of the item selling price. Just a different way to look at it.

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I have no problem with looking at it that way, but it is wrong for the OP to claim it is because ebay is charging 50% final value fees, because that is not accurate, so I'm not sure everyone does know how it works.  Folks need to understand the math to price properly, but they also need to understand why it turns out as it does so they can price accordingly or to not sell certain items at all.  

[stainlessenginecovers]

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@susanb1872 wrote:

@soh.maryl  I stand by by explanation that it is a different way of analyzing the information. Neither way is right or wrong-just a different approach.

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Not really because if you DO it right, the Label Cost, Fees, Shipping Box/Envelope/Bubble Wrap, Label, Ink should ALL be figured and passed ON to the buyer. 

That amount can be added as 'handling' to all 'calculated' shipping pricing.

THEN, the FEE is 13.25% (or whatever it is for that particular category)

Example
$10 shipping label

$1.40 Fee

$.10c Label/Ink

$1.50 Box, Shipping Materials

Total 'Shipping Charged/Shown' SHOULD be $13. 

[ed8108]

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@klhmdg wrote:

It is up to you the seller to set the price, NOT eBay.

eBay "suggested" a price and you went along with it.

Why are YOU blaming eBay for not pricing correctly. A suggestion is just that, a suggestion.

You are in control of your listing price. 

Blaming eBay for your bad business decisions .... Shame shame!

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If ebay's suggestions are not being based upon expert knowledge & experience, ebay should refrain from influencing sellers toward what turns out to be the making of .bad decisions.

[soh.maryl]

Actually, yes, there IS a wrong way and the OP is apparently using it.

Have not yet seen his breakdown of how he comes up with 50%, but if he's using other figures except the item price, the shipping cost and the state sales tax, if any, to calculate the fee, then it is definitely wrong.  

[denisemb2001]

I guess you proved my point. I am not upset about owing money to EBay on the foolish $.99 transactions. What does concern me is the idea that selling a $5 nets only 50% or less.  Ex: item $5, shipping $10, EBay charges 12+% of 15.00 plus some additional fee. I am not benefiting from what the seller pays for shipping but yet I have a fee charged against it. It ends up being almost 50% fee taken from the seller.  Sure if you are selling something for $100 and have $10 shipping it’s not relevant.  Also I had a typo in my post- I meant that it’s on the ‘buyer’ to know what things should cost for shipping. I see some listings for $70 shipping for something that weights under 5 lbs!   Anyway it still sounds like everyone is defending EBay. I checked Etsy and it appears they do not charge their fees on the shipping only the cost of goods.  

[denisemb2001]

Just calculate any transaction $5 and under with a $10 or over shipping charge and it will be clear.  I’m not talking about large transactions. I used to buy everything on EBay but those days are long gone. I would feel guilty now buying anything less than $20 because obviously the sellers are making so little.