I'm struggling to understand why eBay and PayPal take a cut of the seller's postage costs?

[nguyen.mischa]

I'm struggling to understand why eBay and PayPal take a cut of the seller's postage costs?

Sellers are encouraged to list items with an “actual” cost. If the postage cost is an accurate amount but eBay take 9.9% of it, then the seller is losing out on postage every time and paying with their own money, making it an out of pocket expense.

EBay and PayPal both take a cut on the item plus the shipping. I just cannot see how this could possibly be fair to the seller. It’s actually doubling up on the fee too because eBay fees are charged monthly, which means that PayPal charges their fees on the entire item sale price plus shipping costs when the funds are paid through PayPal.

Example: an item is $30 + $10 shipping. Ebay fees would be $3.96 and if this was charged immediately, only $36.04 would go to PayPal for their fees to be applied. The payment is not filtered and does not account for the seller paying extra. Though still wrong because included in these funds is the shipping cost. On that $10 shipping, the seller is paying 9.9% and 2.6% plus 0.30c – for this example, $1.55 has been taken by eBay and PayPal for the shipping alone.

Sometimes you get to the post office and the packaging and postage costs are more than what you expected and quoted! So even more so you are out of pocket.

Another example is that I have a bulk of 5 dresses is listed at 99c starting bid. If this listing sells at 99c, with postage listed accurately at $14.80 express, then I lose the 5 dresses, spent time and effort in listing and posting the items and end up paying eBay out of pocket because of the fees.

Total paid by buyer = $15.79

Ebay fees = $1.56

PayPal fees = 0.71c
Postage for 3kg express satchel = $14.80

Total expense for the seller = $1.28

So even if I was happy for my listing to go at 99c and for the buyer to get a great bargain, why should I then have to put in all my efforts in listing and heading to the post office etc and still have to pay $1.28 out of pocket?

I understand that fees need to be paid for selling items on eBay and for utilizing PayPal which offers buyer and seller protection for all eBay transactions, but cutting into the postage amount when we have been encouraged to list an accurate and exact amount is blasphemy. I’m really concerned with the fact that even when making no money on a sale, you still need to pay eBay and PayPal money out of your own pocket because some of the postage funds were taken from you, which you needed to send the item and what the buyer pays for. No buyer would accept paying for the full postage amount plus paying eBay and PayPal an extra fee, so why should the seller?

Please help me understand.

Regards,

nguyen.mischa

[mzcoast]

I dont understand this either. its just another way for EBAY to get more money. I have thought about increasing my postage cost by 12% to cover the cost of Ebay postage fees............. not fair to pass this additional cost onto the buyer 😞

[imastawka]

EBay and PayPal both take a cut on the item plus the shipping. I just cannot see how this could possibly be fair to the seller. It’s actually doubling up on the fee too because eBay fees are charged monthly, which means that PayPal charges their fees on the entire item sale price plus shipping costs when the funds are paid through PayPal.

How about they're called Final Value Fees

not  Fees After The Other One Has Taken Their Cut

And it's simply because they can

[twyngwyn]

see this 'thread' from 2014...and yes, there's many more....too many

http://community.ebay.com.au/t5/Selling/FVF-on-postage/td-p/1252481

[joethenuts]

hi for a start not everybody pays by paypal ,also you talk about if it sells for .99  what if it sells for $99, common sence tells you, you have to allow 10% on postage. Not all ebayers pay 9.9% some pay  6%     7%   8% ,,

the reason this policy came in is because of all the rort of sellers ,for instance a $20 article and a $10 shipping ,  was selling for $5 with a $25 shipping   so that the seller would only pay a fee on $5..........

paypal have always charged a fee and a % . how much do you think small shops pay thru there credit cards, thats why some dont let you pay by credit card for goods under $10 or $20.  and when you say sometimes you go to the postoffice and the price has gone up ,well whos fault is that ,you shoukd know what to charge.

you can just click on postage calc aus post.  have a nice day

[heihachi_73]

The only thing I can think of why eBay are combining item+postage costs is to stop shifty sellers from charging next to nothing for an item and adding the item's RRP/value to the postage instead, since eBay previously didn't take anything from postage costs.

I'm sure a lot of older eBayers people have seen quite a few expensive items going for 1c with $999.99 postage. Of course, you would have to be blind not to see that when you click on the item before you bid/buy, but I'm sure more than one person has been stung before.

[harley_babes_hoard]

Yeah I'm struggling to understand also...............why would anyone start their auction at 99 cents and wonder why they are not making a profit. Start your auctions at a price you are happy to sell at.

[big*shed]

The solution for the fee on Postage is to factor that charge in to your postage charge.  HOWEVER, do not state in your listing that you are adding the fee on postage onto your postage, just add a 'handling' charge on to each listing that covers the fee on postage.  That handling charge needs to be 11% of your postage charge

e.g. If your postage charge is $14.80 you add an 11% x $14.80 = $1.60 handling charge = TOTAL of $16.40 P&H.

       then, eBay charge you 9.9% x $16.40 = $1.62   i.e your Handling charge.

This way you are only 2cents out of pocket on postage UNLESS you get to the PO and find that you underquoted because you guessed the postage.

The way around this is to just add a flat $2 handling charge to ALL of your listings.  That way you will, over time, cover the fee on postage on all your listings even if you are charged more at the PO counter.

If you post using a bought cardboard box you would have to factor this cost into you postage as well.

The solution for your 5-dress 99cent auction is to start your auction at $4.95 and write that in to your description as:

"The start price represents 99c per dress - a bargain if you are the sole bidder" 

The figures then look like this if there is only one bid (with the $1.60 handling fee)

Total paid by buyer = $4.95 + $16.40 = $21.35

eBay fees = 9.9% x $21.35 = $2.11

PayPal fees = 30c + 2.6 x $21.35 = $0.86
Postage for 3kg express satchel = $14.80 (not sure if this is the current price for a 3kg express satchel, just using your figure))

Total expense amount for the seller =  +$3.58 (put this in your pocket)

If the item does not sell because of the $4.95 start price, then you do not 'lose' $1.28 on the item as you would have had you started at 99c with no handling fee, and you save yourself a trip to the PO to post the dresses.

To me, and many others, it is a no-brainer to price your items and postage so as to not lose on the total selling experience.

[davewil1964]

Simple -

Paypal charge on the amount of money they are processing. They neither know nor care what other costs you have. Should they also not charge you on the postage component, listing fees, COST?

eBay are permitted to charge fees on postage because they offer a postage service. Which happens to be about 10% cheaper than the equivalent Australia Post service (more for a B1 box).

If you choose not to avail yourself of this service, or insist on sending things express when the buyer probably doesn't care, that is entirely YOUR choice.

[phorum_junkie*]

As well as what Dave said you could perhaps blame all the sellers who came to the boards for years complaining that it wasn't fair that US sellers paid less for some things and had other advantages and they wanted the same treatment. Well now they have got it as UK and US sellers have been paying fvfs on postage for a very long time now.