Thursday, June 23, 2011

A Quagmire of FEES - Ebay and Paypal will Tag Team you!

I will go through an example of the fees charged for the sale of one item on ebay through paypal.

I list an item for .99c (.20c)

I add two images (25c fee for second image)

I upgrade to a gallery listing (50c)

After the 7 days (more fees to make it decide when the auction finishes)

So i sold my item for $27.66 and ebay takes there cut out at $2.19

The buyer paid through paypal (lucky me... now i get to give ebay another 3% out of my already plundered final ebay price).. - 77c

In the best interests of myself and the buyer i decided to only charge $2 to get more bidders and keep the cost down. Of course the item supposedly never made it to its final destination... so despite me stating clearly in the auction terms and conditions that i would send standard post "at buyers risk" or they could upgrade to registered.. Paypal just took the money out of my account including postage etc.

So in one transaction im Down:

the original item - $26.01 + ebay fees $3.04 + paypal .77c = - $29.82

Assuming the buyer was honest and did receive the total % of fees for this trade would be:

$3.81 in fees vs $26.01 final value = 11.8% (this may be acceptable depending on how happy you are with the final bidding price).

Now that is a top quality way of losing money in a very slow timely manner. I can only really by sure that both eBay and PayPal stand to gain regardless of which way the transaction goes.

Moral of the story... always send registered (even if it makes the auction final price ridiculously high). Don't list low price auctions as registered post will be more than the final price and the fees will make you a financial loser.