EBay and PayPal rip-off charges

JTP_2
JTP_2 Posts: 4 Newbie
in Ebay, auctions, car boot sales, post & parcels
I've long suspected that eBay's listing fees, final value fees and PayPal charges add up to a sizeable chunk of your takings on low value sales. After doing some analysis I discover that on sales worth less than £5 (and lets face it, there are a LOT of those on eBay) the amount you pay in charges can add up to more than 60 per cent of your takings.
It has taken me months to reach this conclusion as eBay does not make it easy for you to view an itemised list of the charges you've incurred each month.
It is possible, however, if you go into My Account, and fiddle with the settings on Account Activity. Then add the PayPal charges, and see for yourself how much - or little - you are really earning from eBay sales.
To those, like me, who are flogging off small items like outgrown baby kit, my advice is simple - if it's not going to fetch a fiver, you might be better off saving yourself the time and trouble and taking it down the charity shop.
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Comments

  • StaffsSW
    StaffsSW Posts: 5,788 Forumite
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    Not sure where you have calculated 60% from, but based on a BIN of £4.99, i calculate the following...

    Insertion fee 15p
    Gallery 15p (optional)
    BIN fee 5p
    Final value Fee 30p
    Paypal Fee 37p

    Total - £1.02 or 21% of the total sale price.

    For products at this price range, listing upgrades such as bold/featured/highlighted etc do not make economical sense.
    <--- Nothing to see here - move along --->
  • hectoriess3000
    hectoriess3000 Posts: 46 Forumite
    I agree how do you get to 60%:confused: .

    Also if you want to make some money but don't want to sell on e-bay anymore why not try a carboot sale.:cheesy:
  • pepsi_max2k
    pepsi_max2k Posts: 396 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    don't know about 60% but it can deffinately get up to around 40% for lower value stuff.

    eg. media item sold for £1 total = 10p (10%) ins (would only be 5% if 99p, but this is a worst case), 9% fv, 3.4% (3.9% if from abroad) paypal, + 20p paypal (20%) = 42.4% (or 42.9% if from abroad).

    yes, technically that only works if postage is free, though even then only the fv % would change (for 50p / 50p you'd still be around 40% total fees). and if you wanna get technical you'd hopefully be charging more for postage abroad anyway which would affect all percentages but... meh.

    Add in postage and packaging and you'd probably make a loss anyway :p
  • steviebabes
    steviebabes Posts: 2,031 Forumite
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    As above I agree. Even if you sell on a car boot you have a pitch fee, transport costs etc. If you make say £50 pay £5 for your stall and £5 fuel you are talking about the same cost percentage and you don't have to freeze to death!
  • frivolous_fay
    frivolous_fay Posts: 13,302 Forumite
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    *cough* micropayments *cough*
    My TV is broken! :cry:
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  • RFW
    RFW Posts: 10,014 Forumite
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    JTP wrote: »
    I've long suspected that eBay's listing fees, final value fees and PayPal charges add up to a sizeable chunk of your takings on low value sales. After doing some analysis I discover that on sales worth less than £5 (and lets face it, there are a LOT of those on eBay) the amount you pay in charges can add up to more than 60 per cent of your takings.
    It has taken me months to reach this conclusion as eBay does not make it easy for you to view an itemised list of the charges you've incurred each month.
    It is possible, however, if you go into My Account, and fiddle with the settings on Account Activity. Then add the PayPal charges, and see for yourself how much - or little - you are really earning from eBay sales.
    To those, like me, who are flogging off small items like outgrown baby kit, my advice is simple - if it's not going to fetch a fiver, you might be better off saving yourself the time and trouble and taking it down the charity shop.

    Have you ever thought that maybe they don't want you to sell lower value items?

    If you have several items worth around a pound each, list them together, not seperately.
    .
  • JTP_2
    JTP_2 Posts: 4 Newbie
    OK, the 60 per cent charge (actually 61 per cent) only happened once, on a 99p sale that was going overseas, hence higher final value fee. On sales under £2 you are basically looking at between 40 per cent and 50 per cent fees.
    But I think you nitpickers are missing the point. You flog something on eBay, think: oh goody! at least I got a couple of quid for it. But you didn't. You got half that. And they make it hard for you to tell. And that, to me, isn't quite fair play.
    In reply to RFW, have I ever thought eBay doesn't want me to make low value sales? No, RFW, I haven't. I think they want me to make lots and lots of low value sales, and to remain in blissful ignorance of the fact that they are raking in lots of dosh from them.
    Do you really think that 60 per cent, or 50 per cent, or even 40 per cent, is a reasonable level of fee? If your bank charged you that you'd go bananas.
  • DGJsaver
    DGJsaver Posts: 2,777 Forumite
    stevew8975 wrote: »
    21% of the total sale price.


    That`s an outrageous amount really
  • StaffsSW
    StaffsSW Posts: 5,788 Forumite
    Combo Breaker First Post First Anniversary
    As a business seller myself, 21% is still more cost effective than opening a high street shop, or any other sales outlet with a potential 180m customers.

    I know exactly what margin I make on every product I sell - it's basic business strategy. If I am selling lots of lower value items, then they'll be listed as shop inventory format, reducing my overall margin. I also have a higher turnover through paypal that means my fees are 2.9% + 20p, and my DSR ratings are currently rewarding me with a further 25% Final value Fee discount. With careful planning and listing strategy, I can get my fees percentage down to about 12-13%. Overall, I aim to keep ebay/paypal fees to under 17.5% of my gross revenue - and then I also have to consider the margin erosion caused by unsold items - effectively a wasted insertion fee.

    I agree that 21%, 50% or 60% may seem high to some people, but a little bit of planning and strategy analysis is all that is needed to ensure the sales method is profitable. I'm not sure how an overseas sale attracts a higher Final Value fee though - yes, it will cost more to post, but surely you will be charging the buyer more?

    If you are a private seller after a bit of pocket money, then eBay is simple - costs - revenue = profit. If you are a business seller trying to make a living from it, then yes, a bit more care and planning is needed, but if you are reckoning on 60% as a fee cost, then there is either something fundamentally wrong with your business plan, or your calculations.
    <--- Nothing to see here - move along --->
  • martindow
    martindow Posts: 10,213 Forumite
    Name Dropper First Post First Anniversary
    These charges certainly do take a large percentage on low value transactions but they should not come as a surprise as they are not secret. No one is forced to sell things on Ebay.

    If you are contemplating putting something on surely you should calculate the fees and postal costs in advance. If you don't think it is going to be worthwhile don't put it on Ebay!
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