eBay fees adding up to 75% of gross profit

[brickcanada]

I sold an item with a gross profit of $20.40. eBay charged 20.8% for whats supposed to be an 11% ad fee and 28.7% final value fee which I've heard is only supposed to be 13.5%. After shipping label and regional taxes eBay has taken over 75% of my gross profit. Why has eBay overcharged on ads and final value?

[femmefan1946 · Accepted solution]

Yes as listed in the original statement I had a promotion set at 11% yet was charged 20.8% on it.

The Promoted Listing fee is added to the normal selling fee.

So if your item was normally charged a 9.8% fee and you chose to add a PL fee of 11%, you were choosing to pay a total percentage of 20.8%, because both fees are charged.

Did you think you were only going to pay the 11%? It is higher than the 9.8% selling fee and I can see why you might make that mistake.

You can opt to use only the 2% minimum PL fee.

Which would have made your total selling fee 11.8%

And again, eBay calculates its fees on the buyer's payment, including sales taxes which vary from destination to destination.

[brickcanada · Accepted solution]

I see thank you very much.

[flipistics]

Fees are based on the full transaction. That means the total the fees are calculated on includes the item price, the shipping (with some partial exceptions), and the tax (if applicable).  So if you sell an item for $20 with $20 shipping + tax, the fees will be calculated on $40 instead of $20. If you have promoted listings turned on, you might also get additional fees from that (again, on the item, shipping, and tax).

[brickcanada]

Oh so shipping can add more to the tax in the final price? For example 10% eBay tax on the main item would eBay charge 20% tax after shipping was factored in?

[femmefan1946]

Oh so shipping can add more to the tax in the final price?

First.

EBay does not charge a "tax".

Private companies charge "fees" and governments charge "taxes". Keep that straight to prevent future confusion.

Now.

EBay charges its fees on the buyer's Total Payment.

And that includes the buyer's local sales taxes.

Some sales taxes include both the product and shipping on the product.

Not all.

So if  Texas charges sales tax on both, a payment made up of purchase of $10 plus shipping of $10 plus 5% sales tax would be ? Right $21 and an eBay fee of $23.31
But Delaware which has no sales taxes would only charge $20. and the seller's eBay fee would be $22.20.

[femmefan1946]

Your gross payment is what you receive from the buyer.

This does not include the taxes (which go to their government) nor shipping (which you pay to your shipper).

Nor does it include your procurement cost, your packaging costs, and some overhead like printer ink and storage costs.

[brickcanada]

This does not have anything to do with my original statement.

[jtg204]

Are you calculating fees on the item price alone or the item price plus what buyer pays for shipping? 

Fees are based on item price and shipping, not the item price alone.

[brickcanada]

Yes I'm calculating it based on shipping and the item's full price. My problem is that eBay is charging a higher percentage than they said they would for ads and item value.

[jtg204]

example: If item is $10, and buyer paid $12 shipping the total fees is 13.5% of $22 and 11% of $22. Look for 'View More details' and 'View' in the details column for a breakdown on how fees are calculated.

[brickcanada]

It charged 28.7% (eBay sales tax) and 20.8% (ad tax) of $20.40 instead of 13.5%. This is my problem.

[femmefan1946]

Did you have a Promoted Listing option on this sale? Is that what you mean by " 20.8% (ad tax)"?

[brickcanada]

Yes as listed in the original statement I had a promotion set at 11% yet was charged 20.8% on it.