Selling with Online Auctions: EBay Now Charges a Final Value Fee on Shipping Cost

eBay feels that it is generous to allow a limited number of free listings per month. For a while now this promotion has been offered periodically. Even though it attracts more sellers, which should generate more revenue for eBay, the money not collected in listing fees is recovered with a higher final value fee. So while eBay's promotions seem like a good deal, the seller is actually making even less.

Sure it's great not to pay anything if the item doesn't sell. But it would also be great if the listing fee was added to the final value fee. This is sort of the spirit of the promotion, but it's far from the reality. The listing fees are a flat rate, whereas the final value fee is a percentage - the free listing promotion has the potential to be a lot more expensive. It's also not optional to use the free listing promotion. As if that wasn't bad enough, now the new slap in the face to eBay sellers is a final value fee on shipping. But why are they doing this?

99 cent items with an inflated shipping cost

There is nothing wrong with starting an auction at 99 cents - in fact eBay encourages it. The issue here is when an item sells for 99 cents with about a $40 shipping rate, which actually is only $5 to mail. In this scenario, the seller profited $35 on the inflated shipping, and eBay would only make about 10 cents. If listed correctly at $35 with a $5 shipping rate, eBay's fees would have been $3.50. Now multiple that by many sellers circumventing the rules and that adds up to a lot of lost fees.

Many sellers were bypassing the final value fee with methods similar to the above example. However, inflated shipping costs were supposed to be against eBay rules. There was even a way to report to eBay the listings with inflated shipping costs. However, whenever these auctions were reported to eBay nothing was done about it. This situation is ultimately resolved by eBay now charging a final value fee on shipping. But it isn't without consequences. Sellers will have to charge more to cover the real cost of shipping, which will lead to less sales. But there are no negative side effects for eBay as this new policy will ensure even more profits for them on the items that do sell.

Free Shipping

In a conversation about the new final value fee on shipping, an eBay representative admitted that it was partially to encourage sellers to list items as having free shipping. The issue here is that while eBay is profiting, the sellers are making less and less from selling on eBay due to all of these fees. The buyers certainly aren't willing to pay more for shipping. While shipping companies continue to raise their rates, everybody is profiting except for the seller. Many sellers are starting to feel that eBay simply isn't worth it anymore.

Is there a viable alternative to eBay?

One of the best websites to buy and sell on is ioffer.com because it has unlimited free listings and a low final value fee. For buyers this means that there will be better bargains. Their policies rarely change and there aren't any hidden fees. The ioffer site has been around for many years now. Since many of their sellers accept Paypal, which provides most of the buyer protection on eBay, there is no reason not to use ioffer. But before abandoning eBay, everyone should voice their complaints by calling or e-mailing eBay.