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.

[choochoo510]

I'll say it again. This was a sale where ebay calculated shipping at 3.81, and they know that's what I paid. So they KNOW I didn't overcharge on shipping. So again, where is the logical need for them to take 13% of the shipping cost? The reason you just gave doesn't apply here.

[buyselljack2016]

Logic is eBay is going to make money. The alternative to "simplified fees" base upon the current policy would be to charge us 20% or more on just the selling price to obtain profits for the shareholders, and then we would be back to 2010 where selling price vs shipping was skewed.

eBay can't sit here all day looking to see if someone is charging a realistic shipping cost on items sold. Not everyone buys their shipping through eBay. Just think what a goat rope it would be trying to keep track.

They took the "easy for eBay" route.    Simplified fees.

[choochoo510]

I don't think your analogy is the same. And I understand Ebay lays everything. I just believe it functionally amounts to them taking 29.5% of my earnings, rather than 13%.

The shipping cost went straight from the buyer, into my hand, then straight to ebay. No one thinks of that as money they personally earned, or profited from. There's no reason for ebay to tax that money. They advertise saving money on shipping through ebay, but the reality is they then turn around and tax you on shipping costs.

[dhbookds]

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@choochoo510 wrote:

I'll say it again. This was a sale where ebay calculated shipping at 3.81, and they know that's what I paid. So they KNOW I didn't overcharge on shipping. So again, where is the logical need for them to take 13% of the shipping cost? The reason you just gave doesn't apply here.

They have a billion listings.....millions of sellers.......they instituted one rule that applies to everyone equally............  they had a need to solve the problem and they did............

[monica-sells]

You missed my obvious point/statement.....

The shipping in your example was 3.81 (a number you determined....not ebay, not a calculator, not the man in the moon...YOU!)

IF you made the shipping 7.81 and it only cost 3.81.......

7.81 is YOUR Income....you "deduct" whatever it costs to deliver the item to your buyer

(not everyone uses ebay shipping labels)

the platform MUST charge a fee on the shipping to keep the playing field EQUAL for everyone.....

It changes the whole dynamic of your convoluted formula

[collectfest]

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@choochoo510 wrote:

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.

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It really does not matter if its logical. Prices we feel are unacceptable, well there's no end to it.

It is LOGICAL that they base their "cut" on the total amount because they are processing that total amount. I may disagree with the amount of fees. If it gets to the point of diminishing returns, I will discontinue the service.

There was a day when MacD's use to have a promotion for big macs for $1.00 each, then it went two for $5, I whined but still bought them. Any more than that, I'm out, no more big macks for me 😪

Shipping cost to some are or are not profit but it IS ALWAYS income. It may help at tax which will tell if its income.

Bottom line you are responsible that your prices are profitable for the system you are selling. You are feeling the stress we all are feeling. Prices have to go up in some cases. If the buyers are not there at that price you either take a loss, put them on a shelf or find a better place to sell them. 

[stephenmorgan]

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@choochoo510 wrote:

I'll say it again. This was a sale where ebay calculated shipping at 3.81, and they know that's what I paid. So they KNOW I didn't overcharge on shipping. So again, where is the logical need for them to take 13% of the shipping cost? The reason you just gave doesn't apply here.

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The logic for collecting fees on shipping was one thing years ago.  It is not that same reason today.

If you purchased you shipping from eBay they know exactly what you paid, so if they wanted they could not charge you a fee on this amount. 

Today fees on shipping has nothing to do with making sure you do not inflating shipping cost to avoid fees.  As internet sales evolved so did techniques to acquire the most fees.  It is not likely to ever go back to the way things were years ago.

In 1998 the highest fee that could be charged was $75.  A $8000 sale cost $75 and there was no Sales Tax or Money Processing Fees.  I don't see this happing again.  Today that same sale would be over $1032 and more if it is an International Sale.

I think the more successful a company becomes the more they expect you to contribute to them in order to deal with them.

[buyselljack2016]

No money saved by purchasing shipping labels on eBay. Well no more savings than than purchased anywhere else online. We pay the online price on eBay, but that same price is available from many sources.  Talking 1st Class USPS. Priority I get a little sprout from eBay. Media Mail same price as at the PO.

I've sold 2 items while this thread has been going.  eBay has not charged 29.5% fees on my earnings on either one.

as an aside.............    my buyers pay all my fees.

[choochoo510]

So the logic for the shipping tax used to be to prevent manipulation.

Now the logic for doing it is because they like getting more money from sellers.

[stainlessenginecovers]

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@choochoo510 wrote:

I don't think your analogy is the same. And I understand Ebay lays everything. I just believe it functionally amounts to them taking 29.5% of my earnings, rather than 13%.

The shipping cost went straight from the buyer, into my hand, then straight to ebay. No one thinks of that as money they personally earned, or profited from. There's no reason for ebay to tax that money. They advertise saving money on shipping through ebay, but the reality is they then turn around and tax you on shipping costs.

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Why didn't you just click that blue underlined '.....FEES....." that would have quickly showed you what they charge and what they charge against? 

The simple thing to do is add a % to the Handling Fee to cover all those costs. 

Those that choose to NOT see how much things cost in the first place will fail to then cover what things cost. 

[earthdreamer]

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? 

I have a bricks and mortar store where most customers pay with a card of some description.

The bank takes a straight percentage of all those sales, say 2%. They don't ask me if a portion of the sale was for shipping, or for wrapping paper, or a freebie, or whatever. The fee is a percentage of the total sale, period.  The bank also adds a fee per transaction, usually 30 cents. 

It has not occured to me to question the logic or reasonableness of the bank's system of fees.

In exactly  the same way, ebay's FVF is a percentage of the total transaction, plus a little transcation fee.

It is quite simple, really. 

[choochoo510]

I agree, it's simple. They take way more than 13% of a sellers' earnings. Sometimes as much as 29.5%. They know that I only paid 3.81 for shipping and that none of that is a profit for me. But they tax it anyway, so they can get a bigger piece of my overall earnings.

[stephenmorgan]

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@choochoo510 wrote:

So the logic for the shipping tax used to be to prevent manipulation.

Now the logic for doing it is because they like getting more money from sellers.

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Yep, that is exactly it, you got it.

[fab_finds4u]

Sellers used to take a $25 item that cost $5 to ship, and to  avoid fees they charged a penny for the item and $29.99 shipping. 

Thus, eBay started charging a fee based on the item cost and shipping.

Bad deceitful sellers caused that.

[earthdreamer]

For my own sales, it averages out to about 25%, mainly because I add insurance to higher priced items, and cannot add this to the buyer's shipping cost.

Considering ebay provides a world-wide platform for my items, plus manages my transactions, I believe this to be a fair cost of doing business.