What is the logic behind eBay charging fees on postage charges

[j-r-hartley]

If you offer free postage then thats obvious re the charges as it's a single transaction as such, but if you offer seperate postage fees why do eBay charge on the postage charge?

I get why in days of old you would spot the seller whose item cost a couple of £'s but their postage was ridiculously high as their way of escaping the fees as eBay didn't then levy fees on postal charges...I seem to recall the far east sellers being particularly adept at this kind of selling practice...

But on todays market, postage plays a large part in cost of selling relatively low value items, eBay systems where postage becomes an option have a system in place that disallows postage from being particularly high (or at least it did) but i've never understood how they can't get it right and actually charge sellers std fees on their postage charges (if applied). 

If sellers were actually to charge the real cost of postage (packing material/trip to the post office/labelling/time spent packing it would in most instances dwarf the actual postage charge.

Is it different in the US re postage fees?, of late I've seen the same item offered for sale in the US (on this occasion a Shure Microphone) selling for around the same price (approx $200) but with vast differences in the post, ranging from $30 to close on $200 ...

[plpmr]

Please read the massive number of threads, going back a decade, regarding this subject.

"If sellers were actually to charge the real cost of postage (packing material/trip to the post office/labelling/time spent packing it would in most instances dwarf the actual postage charge."

Private sellers could not make some of those charges.

[suelel1968]

It seems obvious to me that ebay charge fees on P&P because sellers used to overcharge on it and undercharge on the item itself. However, now that it is the simplest thing to just buy your postage through Ebay they could fix that issue easily. But they would loose fees so they won't i suppose. And with postage going up..... 

[moldosgifts]

Very simply people would avoid fees by selling an item for 1p postage 9.98 for a second class stamp.

[237ben]

Leaving aside the fact that this subject has been explained many, many times.....

Somehow, people who are interested in making money (ie. sellers) don’t seem to real that the eBay organisation is also interested in making money (which is, after all, the sole reasfor its existence in a market economy.) Any measure which reduces the organisation's income is unlikely to go down well with its investors, meaning heads will roll on the board. So, any genius scheme to reduce/avoid fees in one area is either going to be rejected or merely result the same amount of fees being applied by other means. 

[thepillenwerfer]

In the old days PayPal always took a share of the postage costs as a fee for dealing with the transfer of funds.  As e-Bay now do that it's reasonable for them to take a part of the whole transaction value.  I agree it would be fairer if they took a smaller slice of the postage part than for the item value but that would just lead to people charging less for their goods and more for postage.  However it would disadvantage Sellers who do 'Free' postage as they've always paid full fees on the total amount and e-Bay seem keen on 'Free' postage.

Yes, they could cap the postage charges that Sellers can add, as they do in some categories, but that causes it's own problems.

[magpiecorner1]

It was probably the best business decision that ebay have ever made!

First, it stopped the loss of fees due to folk charging £1 and £50 postage.  Second, it immediate increased fees.  And instantly and absolutely quantifiable.  Third, it was put over as a defensive move because eBay was losing money to the naughty folk, and in turn was making ebay more expensive for the rest of us!

Fourth - and most important.  It demonstrated that Ebay could do whatever it wished, penalising the vast majority for the acts of a few.

Fifth - the absolute best piece of forward thinking - postage charges would ALWAYS go up and therefore fees for postage would ALWAYS increase, and Sixth - the start of 'added value' by the company for its investors, and also the start of squeezing the golden egg to see just how much pressure will make ebay break.  The advent of promoted listings is a direct consequence of this thinking.

Best single bit of business flair I have seen eBay come up with!  

That this single idea makes money for eBay but give their customers no benefits will, in the long run, smash that golden egg, shouldn't take away one iota from acknowledging the logic and indeed brilliance of the idea.   And what an idea - hugely increase fees without effort or costs!

Even the smashing will be long and drawn out, the 11.9% and 12.9% category small businesses  will likely go first, and the big guys must surely have completely difference fees and contracts, but the idea of handing over 20 -35 % of TURNOVER, possibly more if you chuck money at promoted listings, is madness.   

[bennotbill]

The bottom line is simply that it "earns" eBay an awful lot of money.

[237ben]

It also fixed the reputational damage that was being incurred by the site previously allowing the sale of items at 99p plus £50 P&P. That was damaging all sellers because potential buyers were put off by the general feeling that the site as a whole was untrustworthy. 

[kkj140623]

I have just sold an item for £1.20 and the buyer has payed £3.49 for postage (so I do not get this money in my pocket as it will go to Royal Mail). E bay has put those amounts together (£1.20 + £3.49 = £4.69) and taken their transaction fee of £0.90. If I take £0.90 from £4.69 I am left with £3.79. But I now have to take away the postage cost from that amount (£3.79 - £3.49 = £0.30). So in effect the item I sold for £1.20, actually leaves me with £0.30 in my pocket!! EBay takes a whopping 75% of my actual earnings because you can't count postage that the buyer has paid for his item to be posted to him! Surely this is extortionate practice and needs investigation? 

[*vyolla*]

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@kkj140623 wrote:

I have just sold an item for £1.20 and the buyer has payed £3.49 for postage (so I do not get this money in my pocket as it will go to Royal Mail). E bay has put those amounts together (£1.20 + £3.49 = £4.69) and taken their transaction fee of £0.90. If I take £0.90 from £4.69 I am left with £3.79. But I now have to take away the postage cost from that amount (£3.79 - £3.49 = £0.30). So in effect the item I sold for £1.20, actually leaves me with £0.30 in my pocket!! EBay takes a whopping 75% of my actual earnings because you can't count postage that the buyer has paid for his item to be posted to him! Surely this is extortionate practice and needs investigation? 

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It's important to do the math when listing low value items because there'll be a 30p fee as well as the 12.8% final value fee on both the item price and the postage price.

Even more so if your low value items are going as a small package and not large letter, because you're making up eBay's postage fee shortfall yourself.

Unless you're a very high volume business seller who can afford to make just a few pence per item, I'd consider bundling up low value items together and listing them as a job lot. 

[02380jenni]

Hi, my name is Jennifer, I have been with eBay since 2010 purchased thousands of items and sold a few, I am pretty much housebound most of the time, my postage is a little over what it actually costs due to me having to pay a teenager to take things either to the post office or to evri parcel drop off, I put a coin on eBay it didn't generate any interest so I reduced it starting price £1 it had a watcher straight away and bid in the last few seconds so won a collectors gold plated coin for £1, I honered the rules got it packed up and sent my postage with packing and teenager came to £3, I charged £2.50, so I'm 50p down, then I get my invoice after eBay take their fees I got £2.75 so I basically got no acctualy got nothing in fact it cost me money to sell a coin I purchased originally £25, I have now taken the rest of my coins off eBay, loyalty obviously doesn't count, I understand it needs to make money but to take money from the postage is ludicrous, so disappointed, I'm not a dealer I'm just a disabled lady in my wheelchair trying to de clutter, sorry if I'm ranting I'm just 

[papso22]

It's not economically viable to sell low value items with high postage as the fixed 30p element of the fees is disproportionate. 

But that's the fee structure for everyone, why should loyalty come into it?

[bits_n_bobs_heaven]

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@bennotbill wrote:

The bottom line is simply that it "earns" eBay an awful lot of money.

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Obviously, so much so, that now it's free to sell clothing, if free P&P is offered eBay get absolutely nothing!

Obviously, they forgot the $ logic?!