Trying to understand selling fees. Help?

[choochoo510]

Haven't sold anything on Ebay in a long time, and just recently got back into it. I find the selling fees confusing, and pretty much deceitful. As an example, I'll use the latest low-cost item I sold. The item price was $4.99, shipping was $3.81, and sales tax was $0.26, for a total sale amount of $9.06.

Ebay's so-called "13%" final value fee (12.9% to be precise) is for some reason applied to ALL of that amount, shipping and tax included. Which means Ebay took $1.17 in fees for this order. (Then there's the extra fixed amount of $0.30 per order which they add on for fun, so the final fees were $1.47). The reason this is very strange to me is because the only amount I received on this order which can actually be called MINE is the item price of $4.99. The shipping money I received is not income for me, because obviously I have to pay back that exact amount in order to print a shipping label. And of course the sales tax is not part of my income either: that's just a tax the buyer paid to Ebay.

But nonetheless, Ebay is taking:

13% of the item price (which IS my money, so this makes sense).

13% of the shipping price (which is NOT my money, so this doesn't make sense).

13% of the sales tax (which is NOT my money, so this doesn't make sense).

So where is Ebay's 13% cut for shipping and sales tax actually coming from? It's ultimately coming out of the item price, the $4.99 I made on the item. And $1.17 is 23.5% of $4.99, not 13%. And again, once you factor in the $0.30 just-for-fun fee, then they took $1.47 which is 29.5%. This is the percentage Ebay actually takes from the sellers themselves.

Surely people have already pointed this out before. And I guess you just have to deal with it, or go sell stuff somewhere else. But it's pretty irritating that Ebay would advertise "13% selling fees," when in reality the percentage is more than double that, almost 30%. In my opinion, companies should have more respect for their users (and more self-respect for that matter). This legitimately has me wondering whether Ebay is worth using.

[wrong66]

Why do so many sellers simply not get this? It staggers the imagination.

[choochoo510]

I understand that Ebay needs to make money too. I don't expect to use their service for free. I just think they could be more honest in the way they present themselves. When I google "what are ebay selling fees" the first thing I see is 12.9%. I don't believe most people would ever assume the 12.9% factors in other amounts which have nothing to do with their actual earnings.

I also understand the need to combat sellers who manipulate the system via overcharging for shipping. But is there really no other way to combat that? Couldn't they make it so that if you pick calculated shipping, then the shipping cost is not included in the 12.9%? Whereas, if you pick a custom amount for shipping, then the 12.9% does include shipping cost. Or, if you pick a custom amount for shipping, then you have to actually pay at least that amount to ship the item. I don't know, I'm just throwing out ideas at this point. I don't pretend to know all the ins and outs of this sort of thing.

I don't see how offering free shipping solves anything. It just hides the cost of shipping behind the price of the item. It doesn't matter whether I sold the item for 4.99 + 3.81 shipping, or whether I sold the item for 8.80  with free shipping. Everything would have worked out exactly the same, for both myself and Ebay.

[dbfolks166mt]

I understand that Ebay needs to make money too. I don't expect to use their service for free. I just think they could be more honest in the way they present themselves. When I google "what are ebay selling fees" the first thing I see is 12.9%. I don't believe most people would ever assume the 12.9% factors in other amounts which have nothing to do with their actual earnings.

I also understand the need to combat sellers who manipulate the system via overcharging for shipping. But is there really no other way to combat that? Couldn't they make it so that if you pick calculated shipping, then the shipping cost is not included in the 12.9%? Whereas, if you pick a custom amount for shipping, then the 12.9% does include shipping cost. Or, if you pick a custom amount for shipping, then you have to actually pay at least that amount to ship the item. I don't know, I'm just throwing out ideas at this point. I don't pretend to know all the ins and outs of this sort of thing.

I don't see how offering free shipping solves anything. It just hides the cost of shipping behind the price of the item. It doesn't matter whether I sold the item for 4.99 + 3.81 shipping, or whether I sold the item for 8.80  with free shipping. Everything would have worked out exactly the same, for both myself and Ebay.

Rather than using Google simply read the eBay policy that I attached in my other response. 

[dhbookds]

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@wrong66 wrote:

Why do so many sellers simply not get this? It staggers the imagination.

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I think it's because they "disagree" with it.....plus they didn't realize/remember/know that paypal charged on the total also (not counting sales tax as it was handled by sellers .......those who paid it to the states).

Plus they just flat get mad when they make virtually nothing on a $5 item........can't be their fault. 

[monroe67]

"(3) Also, what's the logic of them taking a percentage (from ME) based on the sales tax? What did I have to do with the sales tax?"

Besides the fact that Marketplace Facilitator laws require eBay to collect the sales tax on sales transacted on their internet platform -- and I am pretty sure those laws also allow eBay to charge a fee to do so - -

What is the option to eBay collecting the sales tax and sending it to the buyer's state?
Are you going to do that by yourself?  
Do you keep a handy list of all the 11,000 or so taxing jurisdictions within the United States? 
Maybe have it saved as a .pdf on your cellphone?  
Elections are coming up in a couple months and I wouldn't be surprised if one or two of those jurisdictions might increase their tax percentages as a result of the elections.  Are you going to stay up all night and into the next day to monitor all those changes to tax rates?  
Do you have access to all the cover-documentation for sending those taxes to each state? 
Are you willing to sign that documentation, very likely under the penalty of perjury, that your calculations are correct?  

Or maybe you might want to hire a tax accountant to handle that work.   Again, I would bet any tax accountant who would agree to do that would want more than 12.9% of the sales tax paid by the buyer as his/her compensation.  

I think most of us sellers have accepted eBay's fee on sales tax as a very reasonable price to pay so that we don't have to do it.  

[choochoo510]

Thanks for the response, but it didn't really answer anything I've brought up. I'm questioning whether the system is logical, and you basically just keep saying "but that's the way the system works!"

The bottom line is, ebay took 29.5% of my earnings. Because shipping costs and sales tax are not earnings.

[choochoo510]

Fair enough. I just want to know that I'm actually not crazy in seeing that Ebay took 29.5% of my earnings.

[wrong66]

Ok. It's logical. There you have it.

[monroe67]

"Why do so many sellers simply not get this? It staggers the imagination."

I think too many sellers, especially those who are new to eBay, just don't understand eBay's fee system.  

They remind me of 16 or 17 year old kids who get their first paycheck from McDonalds or KFC, and freak the f**k right out - - because nobody ever explained to them the facts of life of withholding taxes.  

My favorite are still the posters here who seem to think "free shipping" is free.  

[monroe67]

"I just think they [eBay] could be more honest in the way they present themselves."

eBay is honest.  

eBay's FVFs are a percentage of the total paid by the buyer.  Period.  (Plus thirty cents, of course.)  

It is not eBay's fault when users do not understand the meaning of "The Total Paid By The Buyer."  

[dhbookds]

Sure it's logical.........Ebay provides you with

1. A sales platform (and all that entails)

2. Payment services to take the sale money and disburse it to you (old paypal functions) and sales tax to the states......

3.  And to have a level playing field, it charges on shipping so that sellers who provide free shipping don't have to pay, while others don't.  As a by product.....that keeps sellers from overloading the shipping costs and lowballing the sale price to avoid paying the sale fee.........

Frankly, it makes no hill of beans whether it's logical to you or anyone else....it's the way Ebay operates...you either accept it or not....       

[choochoo510]

I understand the system just fine. The reason I think the system is bad is *because* I understand it. I was hoping that by writing this post, people would help me see things differently, or help me see things I didn't already see. But so far nobody has done that. They've just confirmed what I already could see.

I'm not complaining about having to give Ebay a cut. I'm complaining about the system by which they calculate their cut. It's unreasonable and excessive. Ebay took 29.5% of my earnings.

If ebay themselves calculated the shipping cost at 3.81, and they themselves can see that's exactly what the buyer paid, and they themselves can confirm that's exactly what I paid them for a label, then where is the need for them to take a percentage of the shipping cost? There is none. It's just a weaselly way that ebay takes more from a seller's earnings. They want to keep being able to advertise 13% selling fees, but they know they're really getting more from sellers than that.

[buyselljack2016]

That %age was even worse on  the $2.99 item.

Not as bad on items that you sold for more.

That $1.49 item is going to eat your lunch.

It is what it is, and that is what we have to work with.

Bundling low selling price items might be a better business model.

I have pretty much stopped selling anything under $10. Just doing some that I have left rather than discarding them. As I have been selling steadily I am up to speed on the changes.

The lower the sell, the higher the %age., but as an overall %age eBays cut is not 29.5% of MY earnings.

I could also select one of my low sell items that is not representative of my "overall" fees, but it would be just that.......................  not representative, and not a true picture of what is happening. YMMV

[monroe67]

"If ebay themselves calculated the shipping cost at 3.81, and they themselves can see that's exactly what the buyer paid, and they themselves can confirm that's exactly what I paid them for a label, then where is the need for them to take a percentage of the shipping cost? There is none. It's just a weaselly way that ebay takes more from a seller's earnings."

I think at least one other poster tried to explain to you that, more than 11-12 years ago now, eBay found itself getting robbed blind by sellers taking advantage of their original policy not to charge a final value fee on postage, the shipping cost.  Other people were cheating eBay.  Other people were weaseling out of final value fees by charging $10.00 for their mother's wedding dress but $500 to mail it, and paying FVFs on only $10.00.   THAT is why all sellers now have to pay final value fees on postage costs.   

I give up now.  I can't try any more tonight. 
Your viewpoint is set.   And so is mine.  

[stainlessenginecovers]

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@choochoo510 wrote:

Fair enough. I just want to know that I'm actually not crazy in seeing that Ebay took 29.5% of my earnings.

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@choochoo510 

No, they did NOT take 29.5% of your earnings. 

It's like saying that the Social Security Portion deduction on your paycheck is really 12% and not 7.8% like they stated.

Like this: $1000 paycheck minus Federal & State Tax leaves you with $700, and then Social Security takes $78.00 so.... $78 of $700 is NOT 8.8%; it's REALLY 11.9% !!!!

See, that is simply using the WRONG math.

That information is RIGHT THERE- at the bottom of the 'listing page' when it says 'you will incur fees' and it is UNDERLINED IN BLUE for YOU to click on and SEE that they take their Percentage on the Item, Shipping and Taxes.

Clear as a bell. Should NOT be a surprise- to anyone.