Final Value Fee on shipping!?!? - what a rip off!

[bobo710]

I am told that ebay started charging FVF on shipping way back in 2011 and that it says so in the seller center..

But I just took a look at the seller center under Fees and Features and it specifically states NOT including shipping:

10% in all categories. Exceptions apply.

Percentage charged on total amount of the sale by category

• Maximum fee $750*
• Top Rated Plus listings get a 10% final value fee discount (not including shipping)

But even if I am misinterpreting that, It also says "total amount of the sale".. news flash for eBay: shipping is NOT part of the sale!  It is a fee charged to the buyer that passes straight to USPS to purchase a label.  It adds ZERO to a sellers profit margin, it IS NOT A SALE!  This is a total RIP OFF! I charge the buyer exactly what it costs me to ship something, and my margins have to be kept so low to compete with the scammers and thieves selling on here that it is hardly worth selling on ebay as it is, now I find out that my shipping actually cost more than I thought!

[buyselljack2016]

It is saying there is no TRS + 10% off on the shipping portion.

I do "free shipping". Should I pay more fees than you?

[therogue-trader]

A lot of sellers don't charge what it actually costs to ship, I've heard it used to be a fee dodging technique to charge an arbitrary item price with a high shipping price so eBay closed the loophole.  But yeah, as has been said, you're misreading the line; the TRS discount doesn't apply to the FVF charged on shipping

[kensgiftshop]

Have you noticed that Pay Pal also charges you a fee on the shipping charges you collect?

Just like Pay Pal, Ebay bases their fee's based on the total amount, item plus shipping.

[slippinjimmy]

News flash for you.....shipping absolutely IS part of the sale. Basic accounting, total revenues = total sale, shipping is an expense just like cost of goods.

FYI - When eBay readjusted the fee structure in 2011 they REDUCED the FVF's which were previously 12 - 13% instead of 10% (or less). For sellers where the shipping amount was 20% or lower than the item value saw a REDUCTION in fees, sellers who offered "free shipping" saw a large reduction in fees and only those who sold low value items with high shipping saw an increase.

$20 item with $5 shipping - Old fees ($20 @ 12%) = $2.40 ~ New fees  ($25 @ 10%) = $2.50

$30 item with $5 shipping - Old fees = $3.60 ~ New fees = $3.50

$10 item with "free" shipping - Old Fees = $1.20 ~ New fees = $1.00

Sellers who offered "free" shipping saw big reductions in fees

Sellers who sold higher value items saw big reductions in fees

Sellers of light weight cheap to ship items saw a reduction in fees

Sellers of cheap but heavy or bulky items saw an increase in fees

eBay's reported "take rate" (the rate of fees compared to sales based on all sales on the site) barely changed in the year prior to the restructuring and the year after the restructuring which shows that fees changes made little difference to eBay revenues.

eBay sellers no longer paid a penalty for offering "free" shipping and sellers who practised Fee Avoidance by way of excessive shipping charges had to change their way.

I personally faced a small increase in overall fees but in spite of that In retrospect I still think it was the right thing for eBay to do.

[johnrj1226]

@bobo710

 Sorry but  any revenue (aka sale) you receive from your buyer including a separate ship/handling fee is subject to the 10% final value fee.

And rest assured that this practice started in 2011.

A Top Rated + Sellers  receives a 10% discount in their monthly Final Value  Fees except for the the portion associated with the S & H charge.

[the*dog*ate*my*tablecloth]

eBay also started offering free listings and free pictures around the same time.

People who complain about FVF on shipping just aren’t seeing the big picture. The fees are the fees. eBay is not going to agree to take less, if the FVF didn’t include shipping the percentage would be much higher. 

Fees on the total sale is the most fair way to allocate fees to sales. This way sellers pay the same on the same total whether they use free shipping, actual shipping or shipping and handling.

[papermoneyforme]

Sorry, but come to Canada and see how much our shipping and tracking costs are and then it becomes a huge rip off to charge a FVF on shipping.

Not everyone lives in the US where shipping is dirt cheap compared to many other countries.

[luckythewinner]

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@bobo710 wrote:

news flash for eBay: shipping is NOT part of the sale!  It is a fee charged to the buyer that passes straight to USPS to purchase a label.  It adds ZERO to a sellers profit margin

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It does not necessarily pass straight to the USPS, and it does not necessarily add zero to a seller's profit margin. But whether it does that or not is entirely beside the point. 

eBay charges a fee on the "total amount of the sale" as it is defined by eBay, not as it is defined by you. 

And eBay very clearly defines the "total amount of the sale" on the fee schedule page:

"We charge a final value fee when your item sells. This fee is calculated as a percentage of the total amount of the sale. The total amount of the sale is the amount the buyer pays, including any shipping and handling charges. Sales tax isn't included in the calculation."

[slippinjimmy]

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@papermoneyforme wrote:

Sorry, but come to Canada and see how much our shipping and tracking costs are and then it becomes a huge rip off to charge a FVF on shipping.

Not everyone lives in the US where shipping is dirt cheap compared to many other countries.

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Take a look at current USPS International rates and you might be surprised, a lot has changed in the past 20 years and postage for international in the US is no longer "dirt cheap", in many cases it is in fact more expensive to ship US to Canada than from Canada to US.

Even domestic shipping in the US is no longer as great a deal as it was 10 - 15 years ago.

[luckythewinner]

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@slippinjimmy wrote:
Take a look at current USPS International rates and you might be surprised

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True, but when a US seller ships internationally and pays those high USPS international rates he does not pay Final Value Fees on those high USPS international rates.

He only pays Final Value Fees on his first qualifying domestic rate.

[a_c_green]

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@luckythewinner wrote:

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@slippinjimmy wrote:
Take a look at current USPS International rates and you might be surprised

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True, but when a US seller ships internationally and pays those high USPS international rates he does not pay Final Value Fees on those high USPS international rates.

He only pays Final Value Fees on his first qualifying domestic rate.

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Ayup, so if that domestic rate offers Free Shipping, no percentage charged, as I understand it. 

However, the OP is correct that in general, by not deducting the cost of postage from the buyer's payment, eBay is charging a percentage of the postage, which is a seller expense. It is the only expense for which eBay charges a fee. Thus sellers with high postage costs end up paying more in FVFs than sellers with low postage costs, even if the item itself in each case sold for the same price.

In order to level the playing field between sellers with high postage costs and sellers with low ones (I always use bowling balls vs. wristwatches as an example), the postage costs should be deducted before FVFs on the sale are calculated, but eBay does not do that. In a lively exchange in the Weekly Chat a few years ago now, an eBay exec did finally admit that it should be done that way (when printing labels on-line where eBay can see the amount of postage paid), but that they were not going to change it now. Their website coding is held together with spit and baling wire, and they were not about to go messing around with it if they didn't have to.

So in conclusion, it's not going to change. You need to factor your costs accordingly, and decide if it will be worthwhile to sell the item here, based on the fees that you can expect for a successful sale.

[luckythewinner]

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@a_c_green wrote:
In order to level the playing field between sellers with high postage costs and sellers with low ones (I always use bowling balls vs. wristwatches as an example), the postage costs should be deducted before FVFs on the sale are calculated

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When you pay a store with a credit card, they get charged a processing fee on the total including shipping cost - whether that shipping cost is high or low.

Some would argue that it is up to the seller to level his own playing field. I leveled the playing field a long time ago by seeing the writing on the wall five years ago by switching to items with low shipping costs. 

In other words, stop selling bowling balls. 

[the*dog*ate*my*tablecloth]

I grew up in Canada. 

Why do you think sellers who use “free” shipping should pay higher fees than those who charge actual? Why does it matter which bucket the money goes into? The same total should cost the same fee.

[bobo710]

WTH did you get that idea?  You charge free shipping... bull.. you build your shipping in to your SALE PRICE therefore it IS part of your sale and you pay the FVF on it. That is your decision..

Shipping is not a sale, it is a pass through cost and therefore should not have a final value fee.. If they want to charge someone let them charge USPS, or FedEx for all the business eBay brings them..