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Why does ebay take a percentage of the shipping cost as a fee?
Summary: A participant initiated a discussion questioning why an online marketplace takes a percentage of the shipping cost as a fee. Several participants, including mannteuffel, marnotom!, and mrdutch1001, engaged in responses, although no specific details or conclusions are available in this summary.
Why does ebay take a percentage of the shipping cost as a fee?
49 comments
kh-shawn
·8 months agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.
Thank you for understanding.
hold-my-chawowah
·8 months agoBecause they can.
mrdutch1001
·8 months ago@kh-shawn
ZOMBIE THREAD FROM 2024>
nothing of relevance being added, so this thread has outrun its usefulness
john_koenig99
·8 months agoWell...It's still a ZOMBIE THREAD from 2024!
mrdutch1001
·8 months agoYes, Indeed!
mrdutch1001
·8 months ago@kh-shawn
ZOMBIE THREAD FROM 2024!
transtraders
·1 year agoI don't understand why a lot of you are irritated by someone asking a question on a message board. Its a valid question. If you don't like it then don't reply.
byto253
·1 year agoAt one point they did not and seller's abused it horribly by jacking up shipping costs and selling at a lower price in order to avoid fees. e.g. Item should sell for $100 , but is listed at $60 with a jacked up shipping cost. Only pay fees on $60 instead of $100. Low cost items were very bad, so something that would have been $10 and $2 shipping may have been listed for $3 with $9 shipping. Other folks did it on a much lower level by adding $2-3 to shipping costs to save a bit.
The no fee on shipping rewarded fee avoidance behaviour like this. It was against the rules but enforcement for all but the most outrageous was difficult and the volume huge.
Hence, fees were charged on all shipping costs. Now with the implementation of eBay selling shipping labels there is a case that fees could be excluded for shipping labels bought through eBay but by the time that occured the extra revenue from fees on shipping was well established and here to stay.
recped
·1 year agoNot only did no fees on shipping lead to uncontrolled fee avoidance it also punished sellers that were encouraged by eBay (and ecommerce in general) to sell with "free shipping", as everyone knows "free shipping" is in most cases "shipping included" those that offered that were effectively paying fees on shipping.
Another long forgotten thing, when fees on shipping was introduced in 2011 eBay also dropped regular FVF's to compensate. This divided sellers into three groups, those with very low shipping charges had lower overall fees. Seller with moderate shipping charges had very little change and sellers with high shipping charges paid more.
I was in the low to moderate range for shipping so for me the fees on shipping had a minimal effect on my bottom line. Seller of low value but heavy/bulky items paid more.
Given that fees on shipping have been around for 14 years I don't know why this subject keeps getting some sellers riled up as if it just started. Especially for sellers like the OP (of this now one year old thread) who has been selling for 20+ years.
byto253
·1 year agoI pretty well have a cut and paste to respond to these posts now 😋 😎
transtraders
·1 year agoIMO eBay should be charging a lower(much lower) % on the shipping portion as the only service they provide on that portion of the sale is the payment processing.
eBay lost ALOT of sellers when they started charging fees on the shipping portion.
I get it, its their platform, but we don't have to be happy about it, and we should be able to let eBay know our feelings on the situation.
john_koenig99
·1 year agoYeah, something to consider. There are other platforms that don't have some of said charges, with lower sale fees too. I am considering switching to those, altogether.
marnotom!
·1 year agoHow many?
Sure, there were probably some sellers who left eBay after it started charging on the entire transaction value, but given how some categories are saturated with sellers, it's likely that this was a small percentage. I'd speculate that the majority of those sellers who left were ones who were inflating their postage charges rather than ones who were leaving out of some sort of sense of principle. Remember, eBay dropped its FVF percentage when it started charging on the entire transaction value, so some of those who left because they couldn't afford it probably didn't crunch enough numbers.
Seeing as this has been the situation for at least a decade and a half, I think eBay is well aware that its fee structure doesn't make everybody happy. In fact, they're probably aware that nobody likes paying fees. As long there are enough sellers willing to put up with them, it is what it is. Keep in mind that some international eBay sites are experimenting with eliminating private seller fees and maybe the North American sites are taking notes.
mrdutch1001
·1 year ago"eBay lost ALOT of sellers when they started charging fees on the shipping portion." ...Hardly! sure there were lots that left temporarily, lots that said it, but didn't do it , and those that came back with their tail between their legs because there was no other alternative that provided sufficient business.
Nowadays, fees on shipping are common for just about any site worth utilizing...
zolita2000
·1 year agoselling on eBay is a pain in neck. They just care about their profits and do not care about sellers. They take some percentage (more then 15% in the category I sell) of the final price which is the combication of item price and shipping fees. Not fair at all and it is 100% scam and fraud. When I started selling here, it was not like that and then they imposed these rediculous policies to me and other sellers.
mrdutch1001
·1 year agoThere is no scam>this is eBay's site and eBay's right to set the fees wherever they so choose! The fees are set out and selllers know exactly what they are in advance so where is the scam or the fraud? IF YOU are so dissatisfied with the way eBay runs its business, why are you still here listing items? you have a choice>Take it or leave it...
marnotom!
·1 year agoI'm not sure about what "rediculous" policies you're referring to specifically, but when you started selling on eBay, you were paying separate fees to eBay and to the payment processor, which was PayPal at the time. Now the payment processing fees are part of your eBay fees, which may be part of what makes that percentage look so onerous.
As was pointed out earlier in this thread, if eBay didn't charge fees on the entire transaction value, the final value fee percentage would be higher than it is now. Some sellers don't realize that when they attach shipping to their listings, they're offering their buyers a value-added service and that service is just as part of the sale as the item itself. Make your items local-pickup only if you prefer.
In the early days of eBay, my wife and I sold some stuff on a consignment basis for some friends. I can't remember the percentage we charged, but it was more than 15% but less than 50%. Whatever that percentage was, we discovered that it wasn't nearly enough to cover all the time, labour, and materials we needed for the sale. Does that make us greedier or more "scammy" than eBay?
raanana
·2 years agoI 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!
·2 years agoDo 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
·2 years agoI 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
·2 years agoit's the cost of doing business for eBay, for the government and for you...
marnotom!
·2 years agoYou 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"?
raanana
·2 years agoDo you read or just replying to your own thoughts ? Be well and godbuy
dobo5250
·1 year agoPLAIN AND SIMPLE ANSWER IS ______CAUSE THEY CAN--- END OF POINT- EBAY DOES WHAT EBAY DOES- when i was in the dog house here with ebay for months -- they where charging actual costs over 25 % of my sales dollars and i did't make a dime for months with the shipping part it was very small in comparision to the the whole charge of cost of doing sales on ebay that it really din;t matter --- now that iam under
20 % of my sales go to ebay with store costs /promo costs/ reg commision of sale etc etc -- and with now i have had to go back to free shipping rolled in to sale - just to make any sales and increase promo to 5 % iam finding creative ways to save on shipping best i can--- reuse of packaging material- free boxes from shoppers best place for small boxes-- discount stamps when possible- accuate sizing and weight caluations before shipping etc etc - i agree with one of posters above most people do not calcuate their hourly rate working to keep ebay going -- my accountant makes me write every min spent on ebay work then he is constantly trying to convince me that it is not worth the effort -- going on the doe would be better he saids----- there was a point when the write offs offsetted other incomes and the ebay loss but those days are gone 5 year rule came and went -so now its all hope --- so the little that ebay dings me for tax on shipping just means once less coffee a day and or two less beers on the weekend
but i keep hoping that things will turn around and get better-- so i can rise myself up from 2.89 per hour pay rate
reallynicestamps
·2 years agohttps://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.
ilikehockeyjerseys
·2 years agoOthers 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!
·2 years agoI 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
OP2 years agoYes, fees were brutal with that double-dip.
mannteuffel
OP2 years agoIt 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.
kasta504148
·8 months agoI've recently started selling on eBay and trying to wrap my head around this, because it's a dealbreaker for me.
I sold a $15 book to the US with shipping charges at $30+. That wasn't me inflating the price, that's what it cost to ship. eBay took $9 in fees based on the shipping charges. Since I didn't earn money on shipping, I essentially sold my $15 item for $6. eBay took a 60% cut of my actual sale. That's ludicrous, and I'm now looking for alternative selling methods because I have a whole bunch of items I wanted to sell in that price range but not for 40% of the cost I'm selling for.
mrdutch1001
·8 months agoI shall repeat what I posted earlier in this thread:"fees on shipping are common for just about any site worth utilizing..."
and IF that is "a dealbreaker " for you, then best to list and sell'em on FBMarketplace!
ricarmic
·8 months ago@kasta504148 It is worth noting that you only pay fees based on the domestic shipping rate. (Note also that one pays fees on the taxes assessed to the buyer too)
For example, I sold a $12 C item to a buyer in Thailand with free shipping to Canada, $13 shipping internationally (except USA $9 and Russia/China $40).
So the buyer paid $13. C shipping costs.
Because my domestic rate is "free" shipping, ie domestic shipping is ZERO I only am charged ebay fees on the original item price, there were no ebay fees for anything else, so in this case I was only charged fees on the $12 item sale price.
This is an often forgotten benefit of "free" domestic shipping.
flipistics
·8 months agoTheir domestic shipping rates are extremely high too (also $25 to $30 or more).
@kasta504148 , you really need to be buying your labels through eBay or other 3rd party sources. There is a MASSIVE price difference vs over the counter with Canada Post. For the USA, if you haven't gotten into the international shipping program yet, then you might want to consider not selling there right now or, given your location, using a service like Stallion Express or Chitchats.
femmefan1946
·2 years agoFrom 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.
byto253
·2 years agoWhen 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.
mannteuffel
OP2 years agoYes, 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.
marnotom!
·2 years agoeBay'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
·2 years agoold, 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!"
mannteuffel
OP2 years agoYes 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.
mrdutch1001
·2 years agomost 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...
loc2blue
·2 years agoHi ! as I see you are a long time seller also, why are you shocked that old time sellers just finding it out , maybe they were too busy listing ,packing,etc, so they have no time to look into these things, as I see you have a lot of time on your hands and that is why you know this up dates, what you sell under 20 items a year???? you have more time than a pre schooler playing, Im happy you are so informed, but us "old time sellers" real sellers "not look at me how much I know about Ebay", keep yourself busy, and maybe you too can miss some updates, your sales show how dedicated you are,, so why are you lecturing Sellers who have no time like you to look into stuff like this,, now if I could I would make you a trophy, as the smartest seller on Ebay
mrdutch1001
·2 years agoMaking assumptions and comments says much about your character ...so full of arrogance and contempt for small sellers... What you may see now is not the totality of my eBay selling...I no longer have the need nor the desire to be a large volume seller(even though many years back I held a top rated seller status for 10 years) Sorry to disappoint but I have been selling on multiple selling sites for 20 years and just because I choose not to be a large volume seller on eBay does not make me any less experienced than you....
C'est la vie!
Que sera sera!
mannteuffel
OP2 years agoI'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.
marnotom!
·2 years agoThe "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.
baydealz
·2 years agoI agree that this is old news and a warranted workaround by ebay to thwart the sellers who offered low priced items with overly high shipping charges. However, as another long time seller, the error is in the fact that there is no way to compensate for that in the shiping charge - ebay should automatically include it or allow the seller to include a surcharge or % surcharge. You can kinda do this by estimating flat fees, but if you use ebay automatic calculation, you are assured to lose out that commission, why not an option of whether buyer or seller pays for that? I'm fine with honest, trasparent and tight shipping charges, but if you gotta prepare to lose commission on an actual cost, no one benefits.
pjcdn2005
·2 years agoIf you use calculated shipping you can add a handling charge to compensate for the fees.
isellrealcheap
·1 year agoThe total charge to the buyer includes HST and shipping and you also pay fee on that as well. Its works out to 23% actual sellers fee in Canada. It wasnt always like that. Its was 10% sellers, 2 % paypal and postage was a wash.
Its literally doubled since they sarted.
Cheers
mrdutch1001
·1 year ago"Its literally doubled since they sarted"....
and so has a lot of things! especially since Covid...there's not a lot in this world that has not had significant price increases over the past few years. Get used to it! The DT era is back !
C'est la vie!
Que sera, sera!
marnotom!
·1 year agoWhen PayPal started out, it was free for many US users. I guess it got greedy, too.