In Canada we pay the price of gas, then all local/provincial taxes. The two are added together and then you pay 5% GST. So the final price includes you paying tax on a tax. Nice huh.
Well ebay does the same thing. Instead of taxing a tax, they charge you a percentage of the shipping cost. Something you have no control over unless you overcharge.
When you send someone an invoice through ebay, you include the shipping you charge them. Ebay takes the final price of your auction PLUS the amount for shipping and then they take their percentage. So basically you are subsidizing the shipping because Ebay charges you 9% of the shipping cost. If you try to pass that fee onto the customer, Ebay takes 9% of that too. So if shipping is $10, its actually costing the seller $10.90 because Ebay wants $0.90 of the shipping cost. If you charge your customer $10.90 to cover the 9%, then ebay will get 9% of the $10.90 or $0.98 cents.
Below is a cut and paste right from Ebay.
|Total cost to buyer (less any sales tax)||Final value fee|
(Based on the total amount of the sale, including the cost of the item, shipping, and any other fees a seller may charge, excluding any sales tax)
Item not sold
$0.01 - $50.00
9.0% of the item’s total cost to the buyer with a maximum charge of $100.00
$50.01 - $1,000
$1,000.01 or more
This is for Auction style formats. For Fixed Item Auctions they charge 11%-13% based on which category you sell in.