ebay shipping and final value fees

To complete sales on eBay, you must be able to handle-and bill for-shipping. Even if you use a drop shipping service, you still must bill customers for shipping fees. You can list items with free shipping or you can list shipping costs separately. The shipping fees, one way or another, must be clear in your auction listing. So, let's talk about shipping costs and the eBay final value fees!

eBay charges sellers certain fees for using their auction site. These include an auction listing insertion fee, subscription charge to maintain an eBay store (if you have one), and a final value fee. The final value fee, or FVF, is a chunk eBay claims out of the final selling price of your item. This is a variable percentage that depends on the type of item and the range of selling cost. For instance, you might pay 8.75% of the first $50.00 and then 4% of the next $500.00 to eBay.

Shipping charges are not included in the final value fee. This is why you sometimes see sellers try to list an item for $10 and bill $65 for shipping when the shipping itself might cost only $15. Items with low fixed prices ("Buy It Now" amounts) and comparatively high shipping fees will tend to get flagged by eBay.  You can get in trouble for this, since eBay doesn't want sellers to inflate shipping and handling charges. Usually, sellers instead will try to list an item as an auction with a low start price like $0.99 and then a high shipping charge. It is difficult in cases like this for eBay to autodetect what the seller is doing...which is why some of the sellers do it.

Listing items with low auction prices and high shipping to dodge the eBay final value fees is risky. There are two big problems with this. One is that eBay is now granting preference for listings with free shipping, i.e., someone else listing an item with free shipping will tend to get his listing placed above yours in searches within eBay. Items that are seen more often get more bids and have a better chance of selling. The second-and more critical-issue is that your success as a seller depends on getting good buyer feedback for your Detailed Seller Ratings (DSRs). You are rated on several factors as a seller and one of these crucial factors is shipping and handling charges.

Buyers really do look at your seller ratings before buying. Especially if you are a newer seller with few sales, picking up one or two negative ratings from buyers could kill your business. eBay itself has also recently been placing more pressure on sellers who pick up even a few very low DSRs from customers, meaning 1s and 2s on the 5 point scale. It is easy to lose price breaks on fees you get as a top rated seller if you pick up a few dismal DSR values.

So, I recommend that you NOT attempt to evade the eBay final value fees by charging extra for shipping. As for whether you should offer free shipping in your listings or not, I generally say look at what your competition is doing. If many of them are offering free shipping, it will probably be best for you to do the same. For another perspective on offering free shipping with eBay listings, see this eBay hub from kiwi91. For general selling help, see my key ebay selling tips.

Click here to get the free report about how to make money on eBay!

If you just want to use high shipping fees to make sure your auction does not end for less than a certain price, a better alternative is to set a reserve price with your listing. This is more common for really high price auction items such as Superbowl Tickets. Apart from high cost items, though, reserve price auctions are not that well received by eBay bidders. Bidders will usually just look for related product listings that don't have a reserve price.

If you sell regularly on eBay, one of the things you'll have to do is handle shipping efficiently.  The video below shows how some full time pros handle their shipping.  (I have no affiliate connection to the specific program they mention.)