IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Is it legal for eBay to make money on shipping costs?
It's one thing to pay them for advertising our product on their site and paying them commission fees (fvf) on the sale, but is it legal for them to profit on the shipping portion?
How much profit do these guys need out of us before they drive us all away?

They have already forced us in many cases to offer free shipping, which takes money out of our pockets (there is no such thing as free shipping anyway!)

Further, they already get the above mentioned money from us, plus the profit if the buyer uses Paypal because they own that too.

Maybe its time to offer a discount to the buyer ON EVERY LISTING if they call us to use their credit card instead of Paypal.

AXE
Message 1 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Ebay only charges FVF's on the sale price, not the shipping costs.

Paypal is a payment processor and is entitled to a commission, regardless whether it's for merchandise or shipping costs.

Your merchant bank (credit card processing) will charge you about the same for processing payments for shipping costs.

Bernie
Message 2 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Apologies!

I had not read the new "rules" that are coming into effect 😞

Bernie
Message 3 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Exactly.
The new rules, (unless Feebay wakes up before shoving them down our throats), will change everything.
They have no right in my view to manipulate and take money from shipping costs.

And credit card processing is slightly cheaper than Paypal through my merchant bank - not much, granted, but I'd rather give them the money than Paypal (eBay) at this point.
Message 4 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

I have had a brief discussion with a lawyer friend who is looking into this as a favor- his initial response is that unless eBay is physically shipping the item, ie: packaging, handling, taking it to the Post Office, managing buyers inquiries via email as to details about the shipping, etc, then they cannot make a penny on the sellers cost to ship an item.
I will advise when I hear more.
Any thoughts?
Message 5 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

ecbluestar
Community Member
Amazon is charging for shipping for years, I am sure their lawyers checked if that is legal or not...
Message 6 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

The bottom line is that eBay is a private business and can charge whatever they want.

Ok, they lowered the FVF and added shipping to the equation. Some sellers gain, some sellers lose.

If they wanted, they could charge a 20% FVF across the board. Yes, sellers would leave but my point is that they can charge whatever they want and it is up to us sellers to stay or leave.

Am I happy with the change? Not necessarily but I don't think that it will affect us much, if at all, as we have fairly low shipping costs anyhow..

I will run some calculations and, as before, will adapt my business model to take advantage of any changes.

Bernie
Message 7 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

"If they wanted, they could charge a 20% FVF across the board"

Other online sites do charge their sellers an all inclusive 20% fees and are growing.
Message 8 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

20% usually gets better service. River offers reasonable fulfillment and very reasonable shipping rates for items sold on site and 15% rate includes payment processing.

Even Bernie, who is, usual cheerleader, has frowned.

If I do not change anything, eBay gets $500 more in fees per month. And hell yeah, I am changing something. The most annoying is that FVF are charged even of shipping you refund. The combined discounts do not work half the time and I end up refunding $100-$200 per week.

But anyway, everybody says "this is the last straw". But eBay has been hearing that for years. Once sellers start leaving in bulk, eBay will adjust and cap their greed. Did not happen yet.
Message 9 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Copy of one of my posts on the Selling on eBay board:




The way I see it.

This latest change will change eBay forever. It is not the end of eBay, simply a major change to a new future, the second major change in ten years.

It took several years to understand the first major change. It was the introduction of Buy-it-Now: the ability for a seller to sell something at a fixed price and the ability by a buyer to purchase the item immediately. Until then, eBay was an auction site. Nothing but auction. A new game in town. It was fun for both buyers and sellers. That was then, this is now.

As the business grew, it became big business quickly and selling and purchasing goods at fixed price (Buy-it-Now) eventually took control and now commands more than 70% of the eBay marketplace.

The second major change will be in 2011 as millions of listings disappear from the site: items with low value and relatively high shipping cost. To market these items on eBay will become prohibitive (reference to high shipping cost is based on American costs; things are worse in Canada as we all know).

That is the way I see it. Most sellers will adapt.

.
Message 10 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

If I do not change anything, eBay gets $500 more in fees per month. And hell yeah, I am changing something. The most annoying is that FVF are charged even of shipping you refund. The combined discounts do not work half the time and I end up refunding $100-$200 per week.

For my business I find that the biggest obstacle I face with these changes is e'Bay's combined shipping glitch which necessitates numerous refunds for which we receive no credit.

If they can't get that one thing fixed after all these months, then how well will their shopping cart work?
Message 11 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Just finishing my tax prep, and I can't believe how much we paid out in eBay and Paypal fees for the year.

Seems like highway robbery, but I guess it's still cheaper than the costs associated with owning a brick & mortar store.
Message 12 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Amazon is charging for shipping for years, I am sure their lawyers checked if that is legal or not...


Amazons check out and payment system is different
Message 13 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

I am just looking into setting up combined shipping. What sort of glitches are you experiencing?
Message 14 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Just finishing my tax prep, and I can't believe how much we paid out in eBay and Paypal fees for the year.

Seems like highway robbery, but I guess it's still cheaper than the costs associated with owning a brick & mortar store.


For what I paid eBay in 2010, I could have had 2000sqft B&M on really high-traffic plaza. I am really tickling the idea, although I would need a new staffer too.
Message 15 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Yes "some will adapt" and some won't. We have just closed our Ebay store after 9 years selling on Ebay. The numbers just keep going down year after year.

Thanks for the good years Ebay.

Frederic
Message 16 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Charging FVF on shipping is not the problem... Anyone can do that.

It is the terminology "Free Shipping" and how it is applied on eBay.

On eBay free shipping is shipping included... and ebay promotes Free Shipping.

And as promoted on eBay free shipping is misleading advertising.

Here is a link to a series of Do's and Don't's

http://www.canadabusiness.mb.ca/home_page/business___start_it/advertising_dos_and_donts/


and in that list we have the following as a Don't

Don't increase the price of the product or service to cover the cost of a free product or service.
Message 17 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Cumos, I understand what you have been saying but I do think that you are getting too caught up in the semantics. I shop at quite a few online stores and I don't remember ever seeing the term shipping including, however many do use the term free shipping. I am fairly sure that they are accounting for that "free" shipping somewhere in the price of the item just like they account for their other costs.

I think that buyers look at it this way...

Shipping included=customer pays item price and does not have to add anything on to the total for shipping

Free shipping=customer pays item price and does not have to add anything on to the total for shipping

Does a customer think that the free shipping should be less expensive than the shipping included item? I don't think so.
Message 18 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

I am just looking into setting up combined shipping. What sort of glitches are you experiencing?


Since long before Christmas eBay checkout has not been combining shipping costs for multiple purchases which are paid on one invoice, whether they are from 1 FP listing or from several. It charges the full S/H cost for each necessitating numerous refunds. I find this happens mainly on orders from U.S. customers (which means most). It seems to work for other international orders. I'm not sure about Canada as I don't sell as much here and they are usually single item orders.

If eBay doesn't fix that glitch by July we will not receive a FVF credit for those refunds if we don't offer free shipping to Canada.
Message 19 of 24
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IS IT LEGAL FOR EBAY TO MAKE PROFIT FROM SHIPPING?

Thanks for explaining. I do remember now that you and a couple of others mentioned this before. I haven't heard anything about it on the other boards though.

I really don't know how I am going to set everything up and if I should change to listing on .ca or what...

To be honest, I get frustrated just thinking about it so I go do something else instead. lol
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