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.

[partial*eclipse]

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@e-sister11wrote:

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 ... 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?... 

eBay's final value fee is based on the buyer's total payment.  It doesn't matter how that's split between item price and shipping/handling.  Whether  a buyer pays you $10 plus $5 shipping or $15 plus free shipping, the FVF is $1.50 either way.

[thatsallfolks]

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@e-sister11wrote:

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

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Pros and cons? It's pretty basic. Decide:

• what your time is worth;
• what an acceptable profit is, based on your time investment
• what ALL of your costs are/will be
• what price you can ask for the item, based on previous sales on eBay.

If the arithmetic works out, list it. If it doesn't, don't list it.

[dtexley3]

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.

[thatsallfolks]

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@e-sister11wrote:

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. 

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If you're charging the buyer for shipping, that's effectively a pass-through. Adding that to "fees" and calculating a % against the selling price of the item isn't a very effective way of looking at things, unless you're aiming to make a profit on shipping.

[e-sister11]

"based on previous sales on eBay"
Please direct me to that site where I can look it up. I came across it once and forgot to bookmark it. Thanks!

[e-sister11]

"If you live in the middle of the US you don't have as much variation in shipping costs "

Thanks for the input. I would like to point out, though, that for example, an item that costs $7.10 to ship locally can cost $17.60 in that range, shipping to the coasts. To me, that's pretty big, but I suppose it would be more going from California to New York.

In some cases Fed Ex Economy actually came out lower priced than USPS.

[thatsallfolks]

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@e-sister11wrote:
"based on previous sales on eBay"
Please direct me to that site where I can look it up. I came across it once and forgot to bookmark it. Thanks!

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That site is eBay. Do a search, then select "Sold listings" on the left side of the screen.

[the*dog*ate*my*tablecloth]

I ship corner to corner a lot. So I don't sell big heavy items. I sell smaller fabric items that I can fit into a flat rate envelope or multiples into a Regional Rate A box.

Look into all your options. The Medium FR probably won't work for you but the RRA and RRB may.

[e-sister11]

I guess I'm not understanding you.

" that's effectively a pass-through."
"Adding that to "fees" and calculating a % against the selling price of the item isn't a very effective way of looking at things"

This makes no sense to me and doesn't answer the questions. I'm not "looking at things," I'm asking if trying a different approach might be more advantageous.

I'm certainly not looking to make a profit on shipping at all. If I could, I'd prefer no actual shipping at all, but that only happens if you're shipping from China.

I want to know the best formula to reduce the hit I take on the actual profit.

so far, Member of the Grumpy Old Man crew has offered the most useful answer to my actual question.

What soes "a pass-through" mean anyway? Never heard this term before except when you're looking at stuff real fast, you execute a quick "pass-through."

[sam9876]

"I want to know the best formula to reduce the hit I take on the actual profit."

There aren't any tricks.

The fee is based on the total amount of the payment.

[castlemagicmemories]

Free Shipping is not free.  The seller has hidden the cost of shipping into the item price for the listing.  You are figuring shipping by taking it off the item cost and skewing your FVF to be much more than it is.  Generally it would be 10%.  Paypal is around 3%.

Yes, you would lose on shipping if someone farther away buys the item from you, unless you have taken that contingency into consideration by figuring the cost of shipping to the location farthest from you and adding that to the item price to come up with a free shipping cost for the item to the buyer.

Some buyers go for free shipping; others do not.  Free Shipping might be attractive to a buyer who gets Ebay Bucks as they would get more Bucks on a free shipping item as opposed to one with shipping cost separated out.

You might want to go to calculated shipping and set your listings up to offer this.  You would need a scale and a tape measure, and a printer to print the postage labels, although I suppose you could still take the package to the post office and pay for postage that way.

There is a world of info in the Ebay A-Z Index and seller help pages.  The fee pages are listed there.

[partial*eclipse]

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@castlemagicmemorieswrote: ... There is a world of info in the Ebay A-Z Index and seller help pages.  The fee pages are listed there.

Alas, the A-Z index was not carried over to the new Help pages, though there is an A-Z index of policies.

[thatsallfolks]

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@e-sister11wrote:
I guess I'm not understanding you.

" that's effectively a pass-through."
"Adding that to "fees" and calculating a % against the selling price of the item isn't a very effective way of looking at things"

This makes no sense to me and doesn't answer the questions. I'm not "looking at things," I'm asking if trying a different approach might be more advantageous.

I'm certainly not looking to make a profit on shipping at all. If I could, I'd prefer no actual shipping at all, but that only happens if you're shipping from China.

I want to know the best formula to reduce the hit I take on the actual profit.

so far, Member of the Grumpy Old Man crew has offered the most useful answer to my actual question.

What soes "a pass-through" mean anyway? Never heard this term before except when you're looking at stuff real fast, you execute a quick "pass-through."

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"Pass-through": buyer gives you the shipping money, you turn around and use that money to buy postage. It's not the money you keep; it's "passing through". You're not expecting to make a profit on that money, right? So it skews your results if you include that as a fee against what the buyer pays you for the item. "Looking at things" simply meant the way you were calculating your fee %, and IMO, throwing postage cost into your fee total and coming up with a figure of 25% is the wrong way to "look at things". Sorry, I didn't think the language would cause so much difficulty.

You're going to pay 2.9% + 30 cents to PayPal, and 10% to eBay, out of the buyer's full payment to you. You don't get dinged again when you buy postage. 

[dtexley3]

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@e-sister11wrote:
I guess I'm not understanding you.


What soes "a pass-through" mean anyway? Never heard this term before except when you're looking at stuff real fast, you execute a quick "pass-through."

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Referring to a "Pass through cost".  You are charging the buyer what it costs you for shipping, "passing along" a cost that you don't profit from.

Getting a handle on how to charge for shipping is one of the hardest parts of selling on eBay.  It doesn't help that eBay's own calculators aren't always accurate.