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"Why Ebay take 10% fees on shipping ???"
The fee schedule was changed three years ago. At that time, FVF was lowered (that is something many sellers forget!) on most categories while FVFs were applied to the total amount of the transaction instead of the selling price only. This move duplicated what eBay's largest competitor had been doing for years.
eBay is an American company. Based on their experience in the USA, at the time of the change, the reduction in FVF more or less offset the fee charged on the shipping charge. For example, on a $100 item with a $10 shipping charge, a 1% reduction in FVF offset the fee charged on shipping.
The fee varies from 4% to 10% depending on category and seller TRS status. The change of policy was also meant to encourage sellers to offer "free shipping" (shipping included in the selling price) which was quickly becoming the standard for online selling. Three years later, that goal was achieved as more than 55% of all eBay listings now offer "free shipping" domestically.
The change also help minimize some of the obvious fee avoidance practices where a seller would sell an item for $1 (on which FVF was paid by seller) and charge $50 for shipping (on which no FVF was paid by seller).
Unfortunately, that change did not work well for many Canadian sellers who often have to pay (and charge) higher shipping charges. The policy change was not made for them. It also does not work well when an item has a very high shipping cost ($45 for example).
It is their playground, their rules. If we Canadians want to play there we have to understand and respect their rules.
"This all started because Ebay wanted us to believe that they cared about some sellers charging absorbent shipping cost."
I am sorry to say that is incorrect. Yes that message has been repeated by many posters but it does not make it right, does it?
Please allow me to copy what I posted earlier on the subject:
The fee schedule was changed three years ago. At that time, FVF was lowered (that is something many sellers forget!) on most categories while FVFs were applied to the total amount of the transaction instead of the selling price only. This move duplicated what eBay's largest competitor had been doing for years.
eBay is an American company. Based on their experience in the USA, at the time of the change, the reduction in FVF more or less offset the fee charged on the shipping charge. For example, on a $100 item with a $10 shipping charge, a 1% reduction in FVF offset the fee charged on shipping.
The fee varies from 4% to 10% depending on category and seller TRS status. The change of policy was also meant to encourage sellers to offer "free shipping" (shipping included in the selling price) which was quickly becoming the standard for online selling. Three years later, that goal was achieved as more than 55% of all eBay listings now offer "free shipping" domestically.
The change also help minimize some of the obvious fee avoidance practices where a seller would sell an item for $1 (on which FVF was paid by seller) and charge $50 for shipping (on which no FVF was paid by seller).
Unfortunately, that change did not work well for many Canadian sellers who often have to pay (and charge) higher shipping charges. The policy change was not made for them. It also does not work well when an item has a very high shipping cost ($45 for example).
"So their only real options to avoid FVFs on shipping are either to roll the shipping cost into pricing "
And that is exactly what American sellers do., The majority of listings (more than 55%) on eBay.com, listed by American sellers, do in fact offer "free shipping" domestically.
It is something some Canadians have difficulty understanding at times considering our high shipping costs. It is easier for Americans since they all compete in the same marketplace, facing similar shipping options and costs.
That said, yes Canadians offering "free shipping" domestically do save on FVFs.
@pierrelebel wrote:"So their only real options to avoid FVFs on shipping are either to roll the shipping cost into pricing "
And that is exactly what American sellers do., The majority of listings (more than 55%) on eBay.com, listed by American sellers, do in fact offer "free shipping" domestically.
It is something some Canadians have difficulty understanding at times considering our high shipping costs. It is easier for Americans since they all compete in the same marketplace, facing similar shipping options and costs.
That said, yes Canadians offering "free shipping" domestically do save on FVFs.
Perceptions. It "costs" $8.13 to mail a Small Packet to the US. Not me. It costs me $6.73. I do all my work in US dollars.
Actually, because I am moving more and more into shipping included, it costs me nothing as I do not line itemize ALL costs. Either I can make a profit or I cannot. Do you line itemize, the bubble mailer, bubble wrap, each piece of paper you print, the electricity for the light above your work station, the apportioned property taxes for your home office, car insurance for driving to the PO, etc?
Interestingly, my cost structure went down, dramatically, moving from Ontario to Manitoba. All overhead went down. COGS sold went down. Friend of mine in Ontario budgets up to $20 per retail $100 for parts acquisition. I like to budget $5. That is, $5 Cdn per $100 retail US.
Regardless, all of my costs and overhead are rolled into my selling price.
Someone here once said "Not everything is worth selling on eBay".
"how does this benefit eBay?"
More FVF collected on more sales by sellers.
'because people think they're getting completely free shipping?"
Most folks are not stupid and understand that shipping - like all other costs - is included in the selling price.
However, eBay is trying - and so fact succeeding - to convince American sellers to compete with the overall trend in online commerce which is "free shipping". In the USA where eBay is based and where decisions are made the trend towards "free shipping" online is clearly there and growing.
eBay is a very small percentage of the overall e-commerce. And, despite its growth, that percentage is getting smaller every year as e-commerce is growing faster than eBay as more and more large and small retailers are going online.
For readers with some time to invest to better understand the issue, I urge you to follow some of the links offered by Google:
If American eBay sellers fail to compete with others offering "free shipping", eBay will soon cease to grow and eventually exist.
As Canadians, piggybacking on that American success story, we either adapt or jump ship.
While this article is slightly outdated, it makes interesting reading:
http://www.retaildive.com/news/6-shipping-expectations-e-retailers-cannot-ignore/225368/
Please keep in mind the perspective is American, not Canadian. However decisions on eBay are made based on the American experience.
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