Final Value Fee includes shipping cost, Why?

[adsc_4322]

This is actually what I was writing e-bay about when I noticed I chose Forum by accident. So, I went ahead and posted it to see if you guys can explain this to me. If you don't mind. 😕

Hi, I recently started selling items on E-bay and I noticed that you are collecting a Final Value Fee that includes the shipping cost. How can you include the shipping cost? What does the shipping have to do with the cost of the item being sold which is usually half that? And not that it matters any but I don't even buy my labels or anything from e-bay. And It never even ends up being the same shipping price once I get down to the Post Office as what they paid. So I always end up giving them a 4-dollar or so shipping refund, sometimes more. This doesn't make sense to me at all. The last thing I sold was a $10 dollar toy that e-bay then took $3.87 of it. But if I up the price I would never be able to sell it because as it is the shipping on things is way too much! Can you explain this, please?

[ajs_coins_and_alchemy]

@adsc_4322 

Simple answer...

SCENARIO 1:

I can take a $500 item, sell it for $1 and charge you $499 for shipping.

You think Ebay will allow this? This is fee avoidance.

SCENARIO 2:

I offer free shipping. My shipping is included in item price

So I should pay more in fees because my item costs $20, where you can get away with paying less in fees since you sell it for $15 and $5 shipping?

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

THERE ARE TONS OF POSTS EVERY DAY/WEEK ABOUT THIS. REFERENCE THOSE FOR DETAILED CONVERSATIONS ON THIS TOPIC.

Hope this helps you.

[mr_lincoln]

@adsc_4322     For internet sales they levy the fees on Item, Paid shipping and any tax on the transaction.  Years ago, Sellers were NOT charged FVFs on the shipping paid and what some / many did was list their $ 100 item for $ 1 and $ 99 for shipping thus avoiding paying eBay their just fees.

Regards,

Mr. L

[nobody*s_perfect]

In 2011, eBay started charging FVF based on the buyer's entire payment including shipping because:

(1) sellers had been avoiding fees by underpricing their items and inflating shipping charges, such as charging $1 and $24 shipping instead of $20 and $5 shipping.

(2) eBay wanted to encourage sellers to offer Free shipping, which means adding the shipping cost to the asking price, so the current system avoids penalizing sellers who do this.

[mtgraves7984]

Yep. The FVFs are set on the sale's total... item + s&h + sales tax (where applicable). It's all in the TOS.

On another note... you'll receive USPS Commercial rates if you buy your labels on eBay. 

[zero29zero]

Why? it brings in enormous profits to the company for doing absolutely nothing, the ebay bean counters ain't dumb

[ajs_coins_and_alchemy]

What in the world did you charge for shipping? You paid $3.87 in fees for a $10 toy?

You paid $.30 in a flat fee and $3.57 in percentage fee. I dont know the exact percentage for your category. What did you charge, $15 shipping? That's the problem with low value items and high cost shipping. 

I buy my labels online. I pay discounted price for the labels. The difference in what I pay compared to what I'm "charging" the buyer helps pay for my fees that I owe EBay for shipping cost & helps pay for my shipping materials (bubble envelope, box, padded envelope, whatever.)

[caldreamer]

EBAY fees charges on (purchase price + shipping + sales tax) plus 30 cent handling charge.   Additional fees could be charged if you "promoted item" or your customer is located in a "foreign country".

While I agree with you that fees are high you have to understand that EBAY owns the platform so they get to make the rules.

[tsme35]

Already mentioned about the avoiding fees by upping shipping cost, but as far as cost of shipping, that's is becoming more of a problem as of late. Shipping rates are thru the roof now and the PO is increasing rates twice a year now, so you have to find items that will sell. Me personally, have lost about 60% of items that I sold 5 years ago because high shipping makes them impossible to sell anymore.

 If you want to keep you asking shipping price down, it would be advisable to use ebay labels, they are alot cheaper then PO rates.

[bonjourami]

You may want to rethink that $11.65 shipping fee on those two lightweight hand puppets. Your shipping seems to be all over the place. Are you packaging your items,weighing and measuring the boxes before you list?

[monroe67]

You are not the first new seller to ask this, and I would bet a small amount of money that you will not be the last new seller to ask the very same thing.

At least you didn't say eBay should do what you want, or liken them to failed political regimes, or threaten legal action.  

The simple explanation is that this is eBay's playground, their playing field, and they get to charge whatever fees they want to.   

A deeper explanation is that, when eBay first started this site they charged their selling fee on only the item's selling price, the highest bid.   But word got around about that and people started taking advantage of eBay, selling expensive items for $5.00 but with postage/shipping listed as $150.00.  This was an obvious cheat and eBay did, in my opinion, the only thing they could do to stay in business:  They started charging the selling fee on the total paid by the buyer, meaning cost of the Thing plus the cost of postage.  

You weren't around, I assume, when laws required that eBay start calculating and collecting sales taxes.  OMG, the world was coming to an end.   There was a great hue and cry.  Yes, BTW, eBay does add sales tax into the amount they charge their fees on.  

It seems to me that too many new sellers do not take time to learn eBay's policies.  

They are found in the User Agreement.  A link is at the bottom of each page.  There are numerous hyperlinks throughout it which you may want/need to click to get additional details.   For example:  Item 5 of the User Agreement is about Fees and Taxes.   In the second paragraph there's a hyperlink to Selling Fees, a page that lists all of the fee percentages, based on categories of items, and how they are calculated.  

On most categories, eBay's Final Value Fee (FVF) is 12.9% of the Final Value, which is defined as the total paid by the buyer:  Item price plus postage plus sales tax.  Once you accept this, your life on eBay will go much smoother.  

Another thing you should do -- oh, I used that word -- you should come back and read through this Selling forum at least two or three times a week.  Reading the Buying forum can be helpful, too, to see what the buyers' experiences are.  (Some of them could read the User Agreement as well.)  

Best of luck !

[monica-sells]

You are treating shipping too lightly in your selling calculations.....

This is from one of your current listings..

FVF will be based in 19.35 + applicable state sales tax + .30 tran fee......

so, 2.79 IF there was no sales tax in a 12.9% category...you need to predetermine your shipping to the penny based on the item....with all the different sizes and weights from your stuff that I see. I would probably "pre-box" them and have them ready to go (measured and weighed) I don't see how the little bear could cost 12.35 to ship (I could be wrong)

Anytime shipping is more than the item, you FVF is going to look (and be) higher than you expect

• $7.00
• or Best Offer
• +$12.35 shipping

[adsc_4322]

It's a toy. My son only wanted 10 dollars for it. I had to use a box (a small box) and it says to put the measurements down and it will come up with the cost. I actually went under what the actual measurements were trying to save them some money. Because it would say it needs $9 dollar shipping on one 10-dollar item I sold and 14 on another. It's absolutely ridiculous! Believe it or not though when I take it down to the Post Office and ship it, it was actually that much! On one occasion it was a bit cheaper and I refunded her. But she still had to pay $11 dollars in shipping! And again, the toy I was selling for my son was only $10.00. That's why I am upset. No one is winning here. Not the customer, not me. Oh, that's right, E-Bay is winning! But I don't understand why shipping is this much. Oh, and I am only using First Class which is the cheapest shipping. Maybe it's because I live in California? Or is how they caculate shipping the same everywhere?

[adsc_4322]

Oh, and because the shipping is so high I don't charge them for all the bubble wrap, boxes etc. that I have to buy so I am losing out there too. I am going to have to tell my son we can't sell his toys. its not worth it. If I put the cost of the toys higher they won't sell. He has Beanie babies that have been on there for a year!

[adsc_4322]

Nope, I don't promote anything. And everyone has been here close to me.