mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@dbfolks166mt wrote:"Half of those eBay cheerleaders don't even know themselves that 13.25% in fees often ends up costing sellers twice as much as 13.25% or more."
This must be some of that "new math" that I don't understand.
You are 1/2 correct. There is an effective FVF percentage that is slightly higher than the 13.25% stated by eBay. This is due to the FVF's being applied to the sales tax, which eBay clearly states.
And you are only 1/2 correct, because you want so desperately for the shipping cost the buyer paid $36.90 for in this transaction to be true revenue, which it isnt. Was shipping revenue before we didnt get charged a fee on it? No - There was a line item for it on our tax form, now it is artificially built into the gross revenue.
Shipping paid by the buyer to the seller has ALWAYS been considered revenue. If you get the IRS to change that and remove that from the Gross Revenue on my 1099-K then I will agree with you along with adjusting my cost odels.
The seller did not come here to sell his $71.90 item artificially inflated in value due to the shipping cost, he came here to sell his $35.00 item - If someone did a "local pickup" on the item, would it still be a $71.90 item? Of course not, because it NEVER WAS a $71.90 item.
Apples and oranges but if you wish I can rework the cost model to show you those percentages.
Your "ebay effective fee" is based on a percentage of a figure with sales tax taken out because the seller never sees that money - But in truth, the seller never "SEES" the shipping cost the buyer paid $36.90 for - A seller retains NONE OF IT as profit - In your example above, you show the buyer paid $36.90 and the actual cost to ship was $36.90. And in reality, when you account for "shipping related costs" such as shipping material, gas, and most importantly YOUR TIME, shipping is ALWAYS a wash or a loss.
Something you cannot be sure of. The OP never returned and said what they paid for the actual shipping label. In most cases the shipping the buyer paid is always greater than what the seller paid for the actual shipping label. That difference is net profit and fully taxable by the IRS.
So since you willingly base your effective rate on a number minus dollars you never see by taking sales tax out, when doing a quick accounting for profit, (not formal end of year accounting, which we have no choice but to do), you can just as easily base the effective rate on a dollar amount minus other costs ebay has their fingers in that you never see, such as the shipping cost...Especially when considering the ONLY profit bearing figure in this transaction is the items price.
Again apples and oranges. You are correct the sales tax is taken out of the revenue figure since the seller never sees the money. The difference is you do see the shipping money the buyer pays you and it is included in your 1099-K gross revenue where the sales tax is not. As you stated, and as the IRS looks at it, shipping is revenue and an expense.
The true "ebay effective fee" of $10.40 against the item is 30%.
Sorry but we will have to continue to disagree on this one.
isaiah, you are correct that the "ebay effective fee" is 30% as far as using the numbers in dbfolk's line item numbers where they have the seller/revenue payout as $24.60. But the OP has their payout after fees as being $21.40, not $24.60, which means they ended up with $13.60 less than their selling price, not $10.40 less, right? So if the OP is correct that their payout was only $21.40 shouldn't the "true ebay effective fee", as you call it, be 38.8% in their case? Your calculations are correct for the numbers in dbfolk's line item spread, but I'm just wondering if the "$24.60" should have been "$21.40" since that's what the OP said their payout was.
The difference in the payout is due to the fact that OP never revealed where there buyer was located so I had to make an estimate on the sales tax rate. OP also never stated what they actually paid for the shipping label which I am assuming they purchased through eBay otherwise their payout would have been higher. Of course they would have had to purchase the label elsewhere assuming out of that profit. However, just looking at it from the eBay segment it would look like the following. There is NO getting around the fact that the seller received the funds paid by the buyer for this shipping and it is revenue plain and simple.
@tim3737 wrote:40% loss! are you paying attention? I wasn't expecting to make money, but I didn't expect to lose that much either. I just wanted to sell the item because I didn't really need it. If I would have priced in eBay fees and shipping fees no one would be stupid enough to pay that amount and it would not have sold.
The OP said final value fees are insane. I was merely confirming that based on a recent sale. eBay is a multi Billion dollar corporation and they don't need to take over 13% for fees, and they shouldn't charge fees on shipping since they aren't a shipping company, and shouldn't charge fees on taxes since they aren't the IRS. That's why people call it Feebay because they charge too much in fees.
You are not new to selling, so you knew that selling something for exactly what it cost you would be a loss. You knew before you listed it that you would have FVFs on the transaction when it sold. You knew you would have to pay for shipping to get it to your customer.
All of that was known to you when you listing the item at your cost. Ebay charged the fees they state they will charge you. And the carrier costs you could have figured out before listing it.
Sometimes stuff is just cheaper to donate.
@susanb1872 wrote:dbfolks166mt said "There is NO getting around the fact that the seller received the funds paid by the buyer for this shipping and it is revenue plain and simple. "
Shipping received from the buyer is not revenue. A better description would be "total Payments Received" and not "Total Revenue" because the FVF is based on the total payment. Revenue is the value of the item sold only and does not include the shipping cost.
Yes it is. For the purposes of the numbers in which you claim on your taxes, you claim the amount you receive from your buyer [including shipping but excluding sales tax because sellers don't actually receive it]. Then When you are entering your costs, that is when you enter your shipping costs. Not to mention other costs like FVFs, product sourcing, shipping supplies, office supplies, etc. To arrive at a net taxable income.
@lvr-3929 wrote:FWIW my last 30 days the fees off my net total are about 30%. That includes the eBay fees, the shipping labels, the sales tax, does not include my costs to print the labels or actually go mail the items. It does include some promoted listing fees. Some items I only make a few dollars on.
You can find all this stuff in your seller dashboard.
A large item like a boombox you should be shopping the shipping and buying the label on eBay. I don't know if I would even list something like that at all given the size and the need to pack it securely.
Your post shows clearly where some confuse fees with other costs. Ebays FVF are just the fees that Ebay charges you for a regular sale. In most categories that is 13.25%.
What you are doing is calculating your COSTS for selling the item are 30%, NOT the FEES. While shipping is a Cost, it is NOT a fee charged by Ebay. Nor are your shipping supplies.
So your percentage may be accurate for your COSTS, but it isn't accurate as to the FEES Ebay charges.
You mentioned Sales tax as being one of your costs. It is NOT. Buyers always pay the sales tax, NOT the sellers. There are no exceptions to this.
You can find all the info you have cover in the Seller Hub, not the Seller Dashboard. While the Seller Dashboard is in the Seller Hub, your costs are covered in other sections in the Seller Hub.
