Shipping included in final value fees

[oldladysally]

I feel sorta silly asking this, but I just realized that the cost of shipping an item is also added  to  the item itself and calculated with the 12.9% fee , along with final value fee. I knew 12.9% was calculated with tax added, but not the cost of shipping too! My question is if I offer free shipping, will my cost I have to pay for shipping be calculated with the 12.9%? I don't even use Ebay shipping.

Thanks!

[kensgiftshop]

The cost you pay for shipping has nothing to do with their fees.

Their fees are based on the total amount the buyer pays.

[mtgraves7984]

You'll find that the FVFs are charged on the Item + s&h + sales tax (where applicable). Shipping is on you.

[carne.kay]

Keep in mind that your fees are calculated on the total amount including sales tax. Then remember that they are going to send you a 1099, so you will also be paying income tax on the item. You can usually count on paying out a total of about 50% on any inexpensive item. Makes it really hard to even bother with $5 - $10 items.

[soh.maryl]

Yes, the final value fee that the seller pays is calculated on the item price, the shipping cost and the state sales tax, if applicable.

And it's gone up, I think 13.45%?

If you, as a seller, offer free shipping, you need to make sure you have calculated  shipping into the item price, because, ultimately, with F/S, the seller pays the shipping.  

Why not use eBay shipping? It's a little cheaper.  Have you had a bad experience with it? 

[monroe67 · Accepted solution]

"I feel sorta silly asking this, but I just realized that the cost of shipping an item is also added  to  the item itself and calculated with the 12.9% fee , along with final value fee. I knew 12.9% was calculated with tax added, but not the cost of shipping too!"

First -- your understanding of the Final Value Fee (FVF) percentage is mistaken.  
Last week, February 15, 2023, to be exact, eBay raised the fee percentage on many categories.  The amount of the increase was 0.35%, less than one-half of one percent.  
Categories that were (past tense) 12.9% are now (present tense) 13.25%.  

"My question is if I offer free shipping, will my cost I have to pay for shipping be calculated with the [13.25]%?"

Second -- This is a serious misunderstanding.   

The "cost [you] have to pay for shipping" is determined by the size and weight of the package and the carrier you choose to deliver it, whether that is the US Postal Service or FedEx or UPS.  
Since you say you don't use eBay shipping, there is no way eBay could possibly know whether you spend $3.75 to send something small via the USPS or $15.00 to send it via FedEx.  

eBay's FVF consists of two parts:  $0.30 per order and a percentage of the Final Value, which is now 13.25% or could be more or less, depending on the category of item you sell.  If you sell a guitar, eBay's fee is 6.35%; if you sell a "fashion jewelry" string of faux pearls, eBay's fee is 15%.  

The percentage is calculated on the total amount paid by the buyer.  
Let's say a buyer in Oregon buys that food chopper you have listed.  You are asking $11.00 for it, plus $12.25 shipping (at least that's what the listing shows me).  Oregon has no sales tax.  You may not have added a handling charge to your listing.  That buyer in Oregon would pay you a total amount of $23.25:  $11.00  + $12.25.

eBay's fee would be $3.08 (13.25% of $23.25) plus $0.30 for a total Final Value Fee of $3.38.  

[lesegouts]

On average, use a 15% figure to estimate total fees paid to ebay.

[oldladysally]

Thank You. That's what I was asking.  It's based on the total cost the buyer pays, including what they pay for shipping. I saw how a recent sale was calculated on my dashboard and it included the shipping buyer paid. I'd just never seen that before. I knew sales tax was, but not shipping. I thought it was something new. Maybe I noticed because rates went up. And I do use either  eBay shipping or Pirateship. I do think having a few on shipping is really crummy. 

Thanks again

[oldladysally]

Thanks. I will use 15% average when calculating.

[oldladysally]

Thanks everyone for your help! Just when I think I know everything about eBay, something else hits me!

[Anonymous]

Item: $11.00
Shipping Charged: $12.25
Sales Tax: None
Category FVF: $13.25%
FVF: $11.00 + $12.25 = $23.25 * 13.25 = $3.08
Transaction Fee: $.30
eBay Fees: $3.08 + + $.30 = $3.38
Net Proceeds: $11.00 - $3.38 = $7.62

$12.25 corresponds to a 3 pound package sent to Zone 8 or 9 via Parcel Select, meaning the seller would be losing money on shipping.

$3.38 / $11.00 = 30.72% eBay Fees

eBay charged a fee of $3.38 on net proceeds of $7.62.

[Anonymous]

Of course it does.

eBay gives non Top Rated sellers the commercial rate plus $50 insurance and Top Rated sellers the commercial rate less a further discount plus $100 insurance. Higher shipping costs mean a higher amount paid by the buyer and thus higher fees from eBay - the whole point of their free shipping scam.

[Anonymous]

Also keep in mind only 5 states do not have sales tax. Most and D.C. do have sales tax. Looks like the average among all states and D.C. is 5.106%.

[Anonymous]

The actual percentage you pay to eBay is higher that the stated category FVF.

Item: $11.00
Shipping Charged: $12.25
Sales Tax: None
Category FVF: $13.25%
FVF: $11.00 + $12.25 = $23.25 * 13.25 = $3.08
Transaction Fee: $.30
eBay Fees: $3.08 + + $.30 = $3.38
Net Proceeds: $11.00 - $3.38 = $7.62

$12.25 corresponds to a 3 pound package sent to Zone 8 or 9 via Parcel Select, meaning the seller would be losing money on shipping.

$3.38 / $11.00 = 30.72% eBay Fees

eBay charged you a fee of $3.38 on net proceeds of $7.62.

[soh.maryl]

The FVF has been calculated on shipping as well as item price for at least 10 years, probably more.