Why does ebay take a percentage of the shipping cost as a fee?

[mannteuffel]

Why does ebay take a percentage of the shipping cost as a fee?

[marnotom!]

eBay's final value fees are based on the cost of the entire transaction.

So, the sale of a $25 dollar item with "free" shipping in the form of the shipping price getting folded into the price of the item would be charged the same fees as a $15 dollar item with a $10 shipping charge.

Charging fees on the entire transaction value also discourages sellers from selling $10 items with $400 shipping charges.

To be frank, I'm a bit surprised this is news to you given that you've been an eBay user for over twenty years.

I do like your avatar, by the way.  My parents got me a copy of Dr Fegg's Nasty Book of Knowledge for a present when I was a lad.

[mrdutch1001]

old, old news BUT seems like many "long-time" ebay sellers don't pay attention to their financial statements and/or supposedly recently "discover" these expenditures and/or choose to be oblivious to "changes" on this site and/or simply need to draw attention to something old to make it new again or perhaps it's just a way to bring attention to something they don't like and believe dredging it up will make it a "new" topic for discussion...

perhaps we need a topic titled "Welcome all long time sellers to 2024!"

[byto253]

When eBay started fees were not applied to shipping and handling costs.  And many sellers abused the heck out of that by selling items for a very low value and jacking up shipping fees so that they could pay less in fees.   

e.g.  something that should be $20 with $6 for shipping was listed for $10 with a $16 shipping and handling fee.

Technically fee avoidance was against the rules, but handling fees were allowed and monitoring and enforcing that rule was pretty well impossible as the volume was very high. 

[femmefan1946]

From what I read on the dotCOM Seller Board about the mooted $600 gross income generating an IRS demand for a form,  many long time sellers have never worked out whether they are making money or not.

(And don't understand what a tax deduction is, but that's another topic.)

With Managed Payments making fees more transparent, since everything except monthly subscriptions is now on each sale's invoice, some sellers are learning for the first time that their "money making side hustle " is actually a "cash suck hobby".

At best they can use their losses to reduce their income and thus the tax they pay.

[ilikehockeyjerseys]

Others have already gone over people using eBay not charging a percentage on shipping fees as a loophole. 

The reality is that it isn't as if fees would be less if they only charged them on the BIN. They would likely raise the fee percentage to compensate. 

I have never understood the problem people have with this, since it's like this on most online selling platforms, and eBay is upfront about it. 

I find when doing math in my head and quickly deciding margins that estimating for a 20 percent fee on the actual item price usually works out pretty well. A $100 item might cost $130 after taxes and shipping. 20 percent of $100 is $20, 15 percent of $130 is $19.5. It's not always going to be that close, but it works reasonably well in most cases so long as your margins aren't razor thin to the point that a few dollars in either direction will sink you. 

[marnotom!]

I also have to wonder if some of the complaints about fees from long-time sellers are from those who have forgotten or perhaps never took into account the fact that back in the day they were paying fees to PayPal as well as eBay.

[mannteuffel]

I've known for years,  yes, and I do look at statements. Just decided to ask why on the forums and see if anyone had a sensible answer.

The abusively high shipping fees by many sellers are still present so not preventing that in my experience. 

If another seller wishes to offer free shipping and fold that cost within the cost of  item, which I don't do, why am I being penalized financially? 

It's a cash grab, pure and simple, penalizing honest sellers. We don't make any money on shipping, at least I don't, yet eBay takes a cut. If I pass that cost to my buyers, eBay makes even more money.

It's ridiculous. 

[mannteuffel]

Yes old news, thought I'd finally ask.

Do not assume I do not look at statements, as I do.

Was hoping to see if any eBay minions had an ethical answer. From replies so far, nope.

[mannteuffel]

Yes, exactly. It wasn't like that initially, then boom.

So due to the abuse of the few, the majority must suffer because eBay cannot properly enforce their own policies on their own platform? Nonsense. They seem to enforce most of their policies; I've been victim several times of subjective enforcement.

[mannteuffel]

It appears no one has an issue with the principle here, ignore margins thats moot: as a Seller I do not make a cent on my shipping charges to the buyer. Ebay takes a cut of this shipping cost now, whereas this used to not be the case, but due to some bad apples I get hit because their only idea on Policy Enforcement in this case is a blanket fee imposed on all?

Time to add some sophistication to your platforms' backend, eBay.

[mannteuffel]

Yes, fees were brutal with that double-dip.

[mrdutch1001]

most seling venues these days do same as eBay= fees are based on the transaction; so this is not unique to eBay...

Like death and taxes, it's a fact of life in online selling...and just because some may think such actions are "unethical", doesn't make it so... it's their site= their rules, their policies, their fee structure...sites like eBay provide the platform, charge fees for their services and the rest becomes the user's responsibility.

no,as sellers, we may not like it but it becomes part of the cost of selling on eBay and/or other similar selling sites.

Similarly, just like the site's user agreement, we either agree to abide by it or we move on...

[marnotom!]

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@mannteuffel wrote:

The abusively high shipping fees by many sellers are still present so not preventing that in my experience. 

If another seller wishes to offer free shipping and fold that cost within the cost of  item, which I don't do, why am I being penalized financially? 

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The "abusive" high shipping rates you're seeing now are not nearly as prevalent as they were in eBay's Bronze Age twenty-plus years ago.  The problem now is that carriers' shipping rates have risen so dramatically that it appears that sellers are inflating them.

As for your concerns about FVF on shipping, I see it the opposite way: Why should a seller offering free shipping potentially have to pay more in FVF than one who charges for shipping as a separate line item?

You are not being penalized. Charging fees on the entire transaction value levels the playing field.

Your concerns about "ethics" strike me as being based more on self-interest.

[reallynicestamps]

https://www.canadapost-postescanada.ca/cpc/en/tools/find-a-rate.page

https://postcalc.usps.com/?country=10440

Shipping costs are high because shipping is expensive.

Many US sellers automatically use Priority (free boxes ! Whee!)  which is much more expensive than First Class Package Canada, although both are tracked and about the same delivery time.

It is not clear if eIS, which most US sellers are enrolled in, charged import fees to the buyer before telling the seller to ship.  If so, those fees (duty, sales taxes, service fee) appear to inflate the shipping charge although the money goes to an entirely different provider.

[raanana]

I call it greed.Sold a postcard today for $8.00,total fees $2.04.Good I have 10% discount on fees,saved 15 cent )).To a price of the postcard and shipping was also import tax added (VAT),so FVF paid on that as well.On a top is GST. It was discussed here many times,so it how it works here,fees on foreign taxes and taxes on fees.Looks like not big deal,but it is a nice profit for ebay and government.

Selling also  somewhere else and there are not just FVF practically half,but no addditional exactions as well.

[marnotom!]

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@raanana wrote:

I call it greed.Sold a postcard today for $8.00,total fees $2.04.Good I have 10% discount on fees,saved 15 cent )).To a price of the postcard and shipping was also import tax added (VAT),so FVF paid on that as well.On a top is GST. It was discussed here many times,so it how it works here,fees on foreign taxes and taxes on fees.Looks like not big deal,but it is a nice profit for ebay and government.

Selling also  somewhere else and there are not just FVF practically half,but no addditional exactions as well.

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Do you feel you got your $2.04 worth from eBay?

Would you prefer it if eBay charged you 25.5% of the selling price and didn't charge fees on the shipping and taxes?  I think the suits at eBay found out that that would be off-putting for most sellers, so spreading the reach of the fees and charging a lower percentage is what they went with instead.

[raanana]

I would prefer do not be charged for nothing,Is there anything wrong with it ? Just few days back sold to someone in Ontario. they charged me fees on HST added  and by end again HST on fees.If for you it seems right,fine, but in my eyes it is wrong .

[mrdutch1001]

it's the cost of doing business for eBay, for the government and for you...

[marnotom!]

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@raanana wrote:

I would prefer do not be charged for nothing,Is there anything wrong with it ?

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You charge your buyers for shipping, yet you don't transport the item yourself.  You get someone else to do it.  Are you charging your buyers "for nothing"?