@my-cottage-books-and-antiques wrote:
Most FVFs are now 13.25% on ebay, so I'll use that for my examples. That percentage is calculated on the total price (item price, shipping cost, and sales tax). My example assumes no other fees (PLS, "bold" etc)
1. $100.00 item price, free shipping to a state with no sales tax:
13.25% x $100.00 = $13.25, leaving seller with $86.75 ($100.00 - $13.25) (However, seller has presumably paid some shipping, and that too will need to be deducted from the $100.00 selling price to arrive at the amount seller actually "makes")
2. $100.00 item price, $14.00 shipping, 6% sales tax ($6.00):
13.25% x $120.00= 15.90, leaving seller with $84.10 ($100.00 - $15.90)
3. $100.00 item price, $34.00 shipping, 6% sales tax ($6.00):
13.25% x $140.00= 18.55, leaving seller with $81.45 ($100.00- $18.55)
Now, of course, there are other costs involved here, particularly the amount the seller paid for the item in the first place.
In short, while ebay's FVF IS 13.25%, the IMPACT of the FVF is often higher, because it is calculated on the TOTAL price. This should be obvious to anyone with basic arithmetic skills.
Which means sellers need to estimate the IMPACT of fees when pricing their items (and indeed when buying items, so they are buying at a price that allows them sufficient margin of profit.)
As a seller, I never assume ebay's take will be 13.25% , I ALWAYS assume it will be higher, because most states have sales tax and shipping costs just keep going up.
Any seller who does not comprehend that 13.25% of the ITEM price is different from 13.25% of the TOTAL price should probably consider another line of work.
