Selling fees

[e-sister11]

I don't know if this has been covered here, but I noticed a disdain for older topics anyhow, so I thought I'd better start fresh:

Please list pros and cons regarding the fees for listing a basic auction item such as a pre-owned handbag. 

I've noticed that a seller could actually lose money if not careful because eBay counts SHIPPING as part of your profit, even though for mine, the shipping calculated barely covered the actual price of shipping I paid, so the discount wasn't helpful since eBay is taiking a fee based on the larger shipping amount, and then Paypal takes their cuts on top of that (before eBay takes their cut, so on the gross, not net).

Don't offer me a discount, then, already, eBay?!

I calculated, as a new seller, based on my first ten sales, that on average, the fees ate up about 25% of the actual selling price of the item alone- once shippingcame out and eBay & PayPal took their cuts.

So I was wondering, if I charge free shipping and try to calculate a flat ship rate into the selling price, will eBay take a cut on the shipping I actually pay in addition to their 10% off the total sale?

Will I lose on shipping if someone farther away buys it?  Will people even look at my auction if the price is higher, but free shipping?

And finally, what polite advice can anyone offer to make the margins more appealing to a new seller? 

Feeling disappointed in the process. Thanks in advance.

[e-sister11]

Thank you, fern*wood. I appreciate your thoughtful reply and suggestions. 🙂

[e-sister11]

I've never charged a handling fee because I remember way back in the early eBay days, I bought an item and didn't see the handling fees for a small item. It was like $16! More than twice what the item sold for... big turn off! I don't want buyers to experience that, but of course I wouldn't charge an unreasonable cost. I just would like to recoup my own expenses as much as possible.

I imagine eBay will also take 10% off handling fees as well. But, yes, the time to take good photos, edit them, create the listing, edit, and then the cost of shipping supplies doesn't get factored into the asking price for me right now.

What's your experience offering handling fees?

Thanks for your polite and helpful answer!

[e-sister11]

I will be skipping all your unhelpful comments from here on out and I encourage any others with my issue to do the same. Good bye.

[jomor_61]

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@e-sister11wrote:
Thanks for the polite reply and I agree, it punishes the rest of us when they ding us for shipping.
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I just want to sell some of my junk that might be someone else's treasure. I wouldn't charge shipping at all if possible. The "calculated shipping" doesn't cover the fees on the shipping. That effectively means eBay takes about 20% off your selling price, and then PayPal gets theirs, which is twice 2.9% + 30 cents... about 25% off the sale price of the item alone. It's hidden to sellers unless they do the math.
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I'm flabbergasted that these repliers, many of them, do not see that it amounts to about 25% in fees off the item sale price! Do they actually sell things on eBay? Or did they not do the math? They think MY math is wonky! Hilarious!

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YOU DO NOT PAY 25%

You pay 10% for the TOTAL transaction (item cost + shipping).

The you pay the 2.9 % + .30 to PayPal.

At most you pay 13%

Most of us have sold her for many, many years and we would know if we were paying 25%.

Now here is how to price an item

Start with your the amount you need to profit.

Add in fees, packing materials, and anything else that causes you not to profit.

Next either add you shipping in or charge shipping. If you add shipping, put a handling cost in to cover the fees.

If you can't make a profit like that, you're either doing it wrong or selling the wrong stuff.

[sam9876]

"The "calculated shipping" doesn't cover the fees on the shipping. "

Add a handling fee or go with free shipping.

[ted_200 · Accepted solution]

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@jomor_61wrote:

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@e-sister11wrote:
Thanks for the polite reply and I agree, it punishes the rest of us when they ding us for shipping.
.
I just want to sell some of my junk that might be someone else's treasure. I wouldn't charge shipping at all if possible. The "calculated shipping" doesn't cover the fees on the shipping. That effectively means eBay takes about 20% off your selling price, and then PayPal gets theirs, which is twice 2.9% + 30 cents... about 25% off the sale price of the item alone. It's hidden to sellers unless they do the math.
.
I'm flabbergasted that these repliers, many of them, do not see that it amounts to about 25% in fees off the item sale price! Do they actually sell things on eBay? Or did they not do the math? They think MY math is wonky! Hilarious!

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YOU DO NOT PAY 25%

You pay 10% for the TOTAL transaction (item cost + shipping).

The you pay the 2.9 % + .30 to PayPal.

At most you pay 13%

Most of us have sold her for many, many years and we would know if we were paying 25%.

Now here is how to price an item

Start with your the amount you need to profit.

Add in fees, packing materials, and anything else that causes you not to profit.

Next either add you shipping in or charge shipping. If you add shipping, put a handling cost in to cover the fees.

If you can't make a profit like that, you're either doing it wrong or selling the wrong stuff.

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I sell every single listing I put up, and my fees run about 18%. 

Look.  If shipping is $20, and you charge $20 for it, you only get $17.42 after eBay/PayPal fees.  That's $2.58 in loss that is going to get counted against your profit. 

13% you say?  My ASP is $10, so the 0.30 PayPal flat fee makes that 16%.  That's on total revenue received.  I don't keep all that revenue, I have to pay some of it out for shipping. As a percentage of revenue I keep, it's higher.   As a percentage of PROFIT, the fees are even higher.   If your margins are fairly low, fees might well exceed 100% of profit.

The fees here are too high.  It is what it is, but it isn't 13%.

[e-sister11]

Thank you!! THank YOU!!! You get it!!!
.
And on that Dansko item, I decided out of the goodness of my heart to let the $47 buyer back out after she paid because she found out (before I shipped the item) that they wouldn't fit, which I noted in the description that they ran small & gave measurements, etc.! I gave her a full refund and got charged 30 cents by PayPal for the pleasure!
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The first time I listed the item, it didn't sell- I listed it for more... in the $30s. So I went lower to start (this also happened with my paper shredder!).
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Then I offered a second chance offer on my Danskos and waited around for 10 days for that bidder to not reply. Out of integrity I let the 2nd chance offer run the full course of time. I will never make that mistake again! SO I'm out a sale, 30 cents, and almost two weeks.

Finally relisted them and they sold for $37 plus shipping.

Also, the refund process took forever because eBay gave me the wrong advice and told me to tell the buyer who wanted a refund to file a claim! Well that took a couple weeks to figure out that she couldn't file a claim because the item had never been shipped to her! I could've been done with that in a matter of minutes, but NO!
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The learning curve has been maddening I tell ya!

[dtexley3]

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@e-sister11wrote:
Thanks for the polite reply and I agree, it punishes the rest of us when they ding us for shipping.
.
I just want to sell some of my junk that might be someone else's treasure. I wouldn't charge shipping at all if possible. The "calculated shipping" doesn't cover the fees on the shipping. That effectively means eBay takes about 20% off your selling price, and then PayPal gets theirs, which is twice 2.9% + 30 cents... about 25% off the sale price of the item alone. It's hidden to sellers unless they do the math.
.

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No, this is not correct you simply can't fold your shipping cost onto your fees like that.

Think of it this way, regardless of whether or not you offer free shipping:  You pay eBay 10% on the total sale, period.  You pay Paypal 2.9% + $0.30, period.   Those are your fees, but not your total selling cost.  Don't confuse the fees with selling costs.

You pay USPS or FedEx the shipping cost, which you can purchase through eBay (at a discount).  You also may or may not pay for packing materials, ink, paper, labels etc.  This is part of your selling costs, but is *not* part of your eBay and paypal fees.  

Many people get tangled up in the fees vs the selling costs and lump them together and say "eBay takes 25% in fees" (or more) which is not the case.  You have to slow down and bucket your seller costs to understand them.

Back to shipping: For items > 1lb I use calculated shipping, offer USPS Parcel Select, Prioity Mail and Fed Ex Ground.  I then add a handling charge of $2 - $5 based on the weight AND SIZE of the item to cover the ~13% fees the cost of the box, label, etc.   If the item will fit in a flat rate box I throw that in as an option, but this can bite you if the buyer decides to order multiple items and then selected the FR shipping for a combined rate! (been there, done that, lost money).

Hope that helps.  (And you'll quickly learn which posters to ignore, don't let them get to you, they can't help themselves )

[ted_200]

And on that Dansko item, I decided out of the goodness of my heart to let the $47 buyer back out after she paid because she found out (before I shipped the item) that they wouldn't fit...

That sucks, but you made the right call... you don't let them out, you'll be getting it back, and then you'll be out some shipping costs which you can then deduct from your dwindling profits.  ALWAYS, if they want out, and you haven't shipped it yet, let them out.  It only goes downhill from there...

[soh.maryl]

Just want to address a couple of points in your post:  The final value fee is 10% of the total paid to the seller by the buyer, no matter how you slice it.  You sell the bag for $60 plus $10 shipping, buyer pays you $70, eBay takes 10% or $7.  You sell the bag for $70 with free shipping, buyer pays you $70, eBay  takes 10% or $7.  You sell the bag for $10 with $60 shipping, buyer pays you $70, eBay takes 10% or $7.

Also, since Paypal's fee for processing payment is 2.9% plus 30 cents and eBay's final value fee is 10%, I cannot figure out what math you used to get your fees to add up to 25%.  I would sincerely like to see how you figured that.    

And what's a "disdain for older topics"? 

[dtexley3]

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@soh.marylwrote:

And what's a "disdain for older topics"? 

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Many posters, including myself really hate it when someone starts a new question on a 10 page, year old thread.   It really confuses the issue because for those that start at the beginning and don't realize how old the thread is, they start answering the wrong questions and/or issues.

[*eponymous*]

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@dtexley3wrote:

eBay and Paypal charge FFV fees on the total sale including shipping.  If you offer free shipping, they don't charge you twice on the shipping, it's included in the total selling price.

You need to look at the fees and adjust your price accordingly.  Free shipping works well for items under 1lb, or items that ship in FR boxes.  Anything else the cost of shipping varies and you can quite easily lose a considerable chunk of your profit if you aren't careful.

If you live in the middle of the US you don't have as much variation in shipping costs as those of us that live in coastal states.  Personally I use free shipping on < 1lb items and calculated for the rest.  ymmv.

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eBay now owns it and charges a subscription fee.  The "last sold" price can be 20 or more years old.  As a previous poster said, check completed listings on eBay that are recycled quite often.

Sell lightweight stuff and ship by first-class package - erates go up to 15.99 oz and include tracking.

You make money when you buy, not when you sell.  Buy something for .50 that you can sell (not list) for $20.

eBay is here to make money off your sales, and they don't care how much you make.  Neither do buyers, which includes sellers looking for a steal to relist on eBay.

[thatsallfolks]

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@e-sister11wrote:
You should quit thumbs upping yourself.
"DOES NOT PLAY WELL WITH OTHERS"

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LOL. Thumbs up are all from other posters who agree with me.

[thatsallfolks]

“I'm flabbergasted that these repliers, many of them, do not see that it amounts to about 25% in fees off the item sale price! Do they actually sell things on eBay? Or did they not do the math? They think MY math is wonky! Hilarious!”

Right. None of us have ever sold anything. We can’t do arithmetic. You’ve broken the secret code. Congratulations!

[thatsallfolks]

“Look. If shipping is $20, and you charge $20 for it, you only get $17.42 after eBay/PayPal fees. That's $2.58 in loss that is going to get counted against your profit. ”

If your shipping cost is $20, AND you’re going to pay $2.58 in fees, don’t charge $20. Seems awfully straightforward.