Selling On eBay? Be Prepared To Pay A Hefty Surcharge

eBay has been the go-to listing service for anyone wanting to get rid of used and unwanted items for over a decade.    I started listing with them in their second year of existence.  Over the past decade I’ve sold over 1,000 items.   This month is likely the last month I’ll be doing that.

I decided to clear out some older items that I no longer use.   Doing so around the holiday season makes for quick sales on eBay and makes room for any new items that are coming next week.    I listed a dozen items on eBay and many sold within a week.

Then the bill came.

Nearly 35% of what I earned went back to eBay.   Where people used to game the system by selling items for a low cost and then charge outrageous shipping to avoid paying eBay fees, eBay is now using that VERY SAME TACTIC to milk your listings for additional fees.

In fact eBay has gotten so good generating revenue here and hiding it from casual users, like myself, that it should be considered false advertising.  At the very least it is very bad customer service.

Case In Point

I listed a $20 computer accessory on eBay.   They tout there “Free Listing” all over the place.   Nice!    I list for free until it sells.   When it does sell I only pay their relatively minor commission, around 10% of the selling price.  Not bad.

They even help me figure out what my shipping fee should be;  just put in the weight and they will calculate how much to charge the buyer based on where they live.

A buyer snags a great deal just 48 hours after I start the listing.     eBay decides that the shipping fee via FedEx based on the product weight should be $12.   Sounds about right.

Package and ship the item.     Buyer is happy.   All is good.

Then the bill arrives.

That $12 shipping , for which eBay gives me their $1.45 corporate discount? WRONG. 

FedEx charged them $17.  Yes, the original freight was $11.13 per their estimate for a 7 pound item.  The problem is that eBay conveniently leaves out the Fuel Surcharge: $0.65, the DAS surcharge of $3.15, and the residential surcharge of $3.25.  Luckily they did get the $1.45 discount right.    The total damage , which eBay is more than happy to pass along despite THEIR CALCULATOR ERROR, is $16.73 not the $11.13 they first calculated nor the $11.91 they charged the buyer.

That is a $4.83 difference on a $12 line item … a 30% error just on shipping.

Then there are the fees.   The listing is free but the rest sure isn’t.   Yes, eBay needs to earn money and they deserve a commission but let’s break down what is REALLY costs versus the 10% they pretend to offer.

$2.20 for the final value of the item, exactly 10%. Add another $1.69 for 10% of the ACTUAL CHARGE the shipper charged them, NOT the $12 they calculated.

At the end of the day a $22 item with $12 shipping brought in $34 and cost $20.62 all going right back to eBay and the shipping company.

Selling on eBay ends up costing an astounding 60% of the total value of the transaction.

Sadly this is not an isolated case.   Adding up the fees and shipping miscalculations is a huge cost to any seller on eBay.

The worst part of it is that eBay must know this is a problem but why would they change it?

By charging 10% fees on the shipping charge, the more their shipping companies charge the more profit eBay makes.  No reason to work with shipping companies for lower rates!

By making their calculator GROSSLY UNDERESTIMATE SHIPPING FEES they convince buyers to purchase items because it costs them “almost nothing” in shipping costs.   Buyers buy more items, eBay earns more commissions.

By passing through actual shipping costs to the sellers eBay assumes ZERO RISK and passes all the costs of the error on to the sellers.

It is a perfect system.   The sellers pay for all fees associated in selling an item: all the shipping costs, the packing materials, the handling, fuel surcharges, liability in product listing errors, liability in damaged or broken products.   It is a great way to earn millions while doing as little as possible to ensure the software works in anyone’s favor but your own.

As you can probably guess, my next items are being listed on Amazon and Let Go.   Maybe they are not better than eBay when it comes to fees, but they certainly can’t be worse.

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