I am moving house. Chance for some clearing then, and some thing I put up for auction on eBay. Pretty normal so far.
Shipping costs were by far the most difficult to be sure on; I made mistakes and set up a listing for an item that was too big for a small letter, besides fitting the weight, and so I learned about the different dimensions for small and large letter. The buyer was not to blame, so I ate this extra cost.
Then I did it again, with a different package, for a different reason, and purchased and printed a postage that was not appropriate. That was a larger cost, but I ate that too. My fault.
All this is to show that I’m trying to represent an honest and fair quote to the people who will give me money for the stuff I put up. I have even started auctions of £0.01, and they have sold at that! That is perfectly fine!
What is not “fine” is that eBay is charging me 10% of all shipping costs. Let me say this another way, so I’m sure you understand.
When I’m auctioning an item, and it sells for £10, that is what the winning bid is, and eBay will take 10% off that. That is £1 to eBay. Excellent!
Then I have to ship the item, so I have setup the listing to show that the way I will send this to whoever wins it, is by My Hermes couriers, costing £2.75.
eBay will charge 10% of that too, for a total of £1 + £0.28 = £1.28
This also means that any bids won at £0.01, with a shipping cost of £0.75 (that is small letter, which is the smallest “thickness” for any item that is larger than an actual letter) will mean that:
* the buyer paid £0.76
* eBay charged me £0.08 (as 10% of the entire amount the buyer paid)
* I pay shipping and eBay: £0.75 + £0.08 = £0.83
In essence, I sell the item at a cost to me. Granted that is the lowest possible example, but it applies to other sales: For any item whose shipping cost is £2.75 (parcel size) the bid has to be £0.32 to generate a profit for the seller of £0.01
That is vile! So I contacted them to learn what was going on, and they answered me with the same thing as their later letter. That letter is this:
Thank you for your insight regarding with the recent change about the final value fee shipping.
I understand that this might seem confusing and unfair to you. Do not worry, I’ll be happy / glad to explain to you as to why we have a final value fee on shipping.
The reason why we have this is we want to protect buyers and sellers at the same time. We’ve taken action/we’ve addressed this by adding a final value for postage and packaging because we’ve actually received a lot of complaints from buyers saying that sellers are overcharging/excessively charging them for Postage and Packaging.
I understand that you are good seller and charging correct fees for postage and packaging. However, we are looking at this change as whole and this applies to all sellers.
We have put a huge amount of thought and effort into our system of fees. We try our best to balance the needs of all our different members, while still surviving as a business; it’s not easy, but we believe we are being as fair as is economically possible!
Here are a few of the explanations behind final value fees on shipping:
• It prevents dishonest selling practices.
We had an issue with sellers overcharging for shipping; charging fees on shipping keeps these pricing from rising way too high.
We don’t want to punish our honest sellers, but a safer eBay means more business for everyone!
Generally, our policy is that we charge fees based on the total paid by the buyer. We believe this ensures that buyers pay a fair price.
As an extra bonus, this encourages sellers to offer Free Shipping, which we’ve seen increases total sales.
• Our system does actually give sellers lots of ways to save money.
If you become a Top Rated Seller, you’ll get a discount on all final value fees; if you become a Power Seller, you can get discounts on shipping.
If you find any ways to save money on the shipping process (eg., reusing boxes or packing material instead of buying it every time), those savings go straight to you!
When you offer an international or one-day shipping service and it’s selected by your buyer, your final value fee for shipping is calculated using whichever service is least expensive: your default shipping service, or your one-day or international shipping service.
This means that if you offer free shipping, plus other one-day and international options, you’ll never get charged for shipping – even if buyers pick the more expensive one-day or international services!
• These fees are quite reasonable when viewed as part of eBay’s entire fee system.
I’d encourage you to think about the many services eBay provides:
Exposure to global buyers, Search Engine Optimization, the eBay Money Back Guarantee, fraud prevention, access to Customer Service agents, and much more!
eBay does not make money from any of these services, so in reality, there is not a 1:1 relationship between fees and the services provided. We’re not trying to say that you owe us for shipping; rather, when you sign up to benefit from all that eBay provides, you agree to pay all the fees that help us provide these things.
Thank and regards,
eBay Customer Service”
and this was my reply:
You had a problem with dishonest sellers, and decided to do something; you ended up hurting your honest sellers. As such, you failed in your goal and alienated me, an honest seller. You failed twice in your goal.
You had a problem with dishonest sellers overcharging buyers for shipping, so you decided that a 10% fee on shipping could curb their dishonest seller. Are you saying that 10% is all the margin that the dishonest sellers made off their dishonest shipment costs? You, eBay, and the buyers were complaining about paying £3.00 instead of £2.74 for shipping? Is that what this whole situation was about? This was worth it? All you have achieved is that dishonest sellers will charge MORE for shipping now, to cover your costs, but also honest sellers like me will do so as well.
As one legal blogger put it: “Yes, eBay is now charging fees on what is categorized by your bookkeeper as a business expense. (The IRS doesn’t tax businesses on expenses.)”
In other words, if you want to cover your costs, do it on the bid price, not on shipping! Increase the bid percentage fee you charge and leave the business expense un-taxed! Until you stop charging a fee for shipping, I have no other choice but to transfer that to the buyer.
Here is a completely truthful and fully transparent message that will appear in all my future sales, taking a theoretical listing where the shipping cost will be £2.74:
“This listing has no shipping charge as an extra feature from the eBay system. Instead, the shipping cost is included in the initial bid. The cost is broken down as: £2.74 for the actual shipping, 10% of that to pay for eBay’s Final Value Fee Shipping, and £0.01 as a true initial bid. This comes to £2.74 + £0.27 + £0.01 = £3.02. To learn more about ebay’sFinal Value Fee Shipping, you can explore these links, or google for eBay Final Value Fee Shippinghttp://www.ebay.co.uk/gds/eBays-Final-Value-Fee-FVF-on-Shipping-Is-it-just-/10000000040698120/g.html https://lisasuttora.com/ebay-to-charge-final-value-fees-on-shipping-costs
Thank you for your understanding.”