@jbwoodco wrote:
I agree with everything you said until the Accounting error. This is no error.
Well, it is, in the sense that they're charging a seller fee on a seller expense. Given the quality of their coding, I don't think they honestly realized their screwup at the time (back when they announced that Final Value Fees would be extended to Shipping charges as well as the purchase price). It's fair for them to address the problem of sellers trying to cheat the system with a low price and high Shipping charge, but there's a direct expense for postage included that the seller does not get to keep as income from the sale. The postage can be deducted without any detrimental effect on keeping abusive seller pricing in line.
It's a process that's easily misunderstood, as far as what's fair and what isn't. It also doesn't help when people conflate "shipping" (what the seller is charging the buyer) with "postage" (what the seller is paying the carrier). The former is rightfully included in the Final Value Fee; the latter should not be (but is anyway). It is the only seller expense for which eBay is charging the seller a percentage. This discrepancy is more obvious for heavier or otherwise more expensive shipments than for lighter or cheaper ones.
For example, let's say that a $100 item requires $5 in postage. The buyer pays $105, but the seller only takes in $100, since the USPS gets $5. He still has to pay FVFs on $105 regardless.
Now look at another $100 item that needs $20 in postage. The buyer pays $120, but again the seller only takes in $100, since the USPS gets $20. He still has to pay FVFs on $120.
If the postage was deducted from both sales above before FVFs were calculated, then both sellers would pay the correct fee, based on the $100 that they actually took in.
This holds true for "Free Shipping" sales as well:
Again, let's say that a $100 item requires $5 in postage. The buyer pays $100 (Free Shipping), but the seller only takes in $95, because he has to eat $5 in postage. He is still charged FVFs on $100 regardless.
For another $100 item that needs $20 in postage, the buyer pays $100, but the seller only takes in $80 after eating $20 in postage. He still has to pay FVFs on $100.
If the postage was deducted from both sales above before FVFs were calculated, then again both sellers would pay the correct fee, on $95 and $80 respectively.
Finally, this still ensures that gouging sellers still pay their fair share. Suppose that an item sells for $10 with $100 in Shipping charges, even though it really only costs $5 in postage. The buyer pays $110, the $5 postage is deducted, and the seller is charged FVFs on $105, as it should be.
Postage is the only seller expense for which eBay imposes a fee, by not deducting the cost of postage even when it's purchased on-line and directly connected to the original transaction. If the postage paid was deducted from the buyer's payment before Final Value Fees were calculated, then the actual amount taken in by the seller would be recognized, and the playing field would then be leveled for sellers of all items. (I know this correction wouldn't account for sellers buying postage over the counter at full retail. They should look at it as another incentive to start printing their labels on-line instead.)
Now, having said all that, eBay has already stated in the past, "Tough, we know it's unfair, but it's not going to change." I suspect it's more likely due to no one wanting to take on the challenge of fixing what's really just a basic accounting error in code than anything else, but it is what it is, and it's not likely to change, so just factor it into your expenses when setting your price. Sorry.
