Kalvin: Why does ebay charge a percentage on the shipping costs when its not ebay business?

[kpld]

Kalvin:  

Why does ebay charge a percentage on the shipping costs when its not  an ebay business?

Thx, kim.

[nsbridge.2008]

Because they can, it is that simple. Pure money grab.

[karl*katz]

At one time people would sell Flat Screen Televisions and similar items for 99 cents with $1,000 shipping as a way of evading eBay fees.

As a result of that practice eBay started charging a percentage on the total transaction.

[ypdc_dennis]

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@karl*katz wrote:

At one time people would sell Flat Screen Televisions and similar items for 99 cents with $1,000 shipping as a way of evading eBay fees.

As a result of that practice eBay started charging a percentage on the total transaction.

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That, and amazon does the same thing -- fees based on the total transaction price.

[inuk_the_polar_bear]

It is part of the transaction. eBay/Paypal collect the money, disburse the money, provide shipping payment services.

[recped]

My opinion....they did it because sellers who were following eBay's prompting and including shipping in the item price were essentially paying a fvf on shipping. Hard to promote a "free shipping" model when you are penalizing those who use that method.

Perhaps the OP was not around but when fvf's on shipping was brought in, the overall fvf rates were lowered, I seem to recall than at a 25/75 split (eg: item price $30 with $10 shipping) the final fee amount was a wash, a $100 item with $10 shipping meant lower overall fees while a $5 item with $10 shipping meant a higher overall fee.

[kalvin@ebay.com]

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@kpld wrote:

Kalvin:  

Why does ebay charge a percentage on the shipping costs when its not  an ebay business?

Thx, kim.

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Hi kpld,

Collectively, I think the answers are all here for you. 

There was a time when Sellers would charge next to nothing for the item cost itself & inflate shipping costs. In order to eradicate these practices, this change was implemented. It gives Sellers incentives to charge the actual item price - and in some cases offer free shipping as to avoid the extra FVFs.

Hope that helps.

Thanks,

[recped]

Kalvin

You seem like a nice guy and your presence on the boards is greatly appreciated.........(yeah you know what's coming!)

and in some cases offer free shipping as to avoid the extra FVFs.

Only someone with no selling experience could claim that "shipping included" (known on eBay as "free shipping") means no fvf on shipping.

At best it can reduce the fvf's on the shipping portion by 20% but only if you are getting a TRS discount.

[mr.elmwood]

Let's try my math. $50 widget with free shipping VS $40 widget with $10 shipping.

$50 + free = $50 X 8% = $4

$40 + $10 = ($40 X 8%) + ($10 X 8%) = $4

The savings keep piling up.

What eBay leaves out of the equation is that including shipping in the widget price counts against your monthly selling dollar limit. If I had "free" shipping on every widget, that would count about $4,500 (four thousand five hundred dollars) against my selling limit.

[recped]

Good point Mr E, that aspect hadn't occurred to me, I have a secondary selling account with a low limit which could be affected as you explain.

[mr.elmwood]

I can hear Kalvin going: "Geez! I never thought of that."

[anguscoinshop]

Free shipping gives you a higher place in search engine = more sales = more $$$$$$