Posted by The other day I sold a watch on Ebay for $54. That may sound like a good sale, but the listing was on Ebay for a year before it sold. Over that time, I lowered the price several times as I tried to find a buyer. When I put the transaction into my Ebay sales spreadsheet, it showed me that my net profit was a measly $3.89. I originally paid $32.21 for the watch, and I think the listing price started at $64. I had free shipping on the item, which cost me $9.12. Then the Ebay final value fee took $8.78. Ebay’s final value fee is based on the total amount that the buyer paid including tax and shipping. So, Ebay used $56.57 to calculate their fee. For watches and jewelry, they charge 15% + 30 cents. Add that all up and my costs were $50.11 and my net profit was $3.89.
I have another watch listed for $82 with free shipping. Let’s do a profit estimate on that one. I paid $43.71 for the watch plus $12.87 for an original box. The shipping fee should be the same at $9.12. If the buyer pays 6% sales tax, the Ebay final value fee would be based on $86.92 for a fee of $13.34. When that watch sells, my costs will be $79.04, and my net profit will be $2.96. That’s even less than the watch that I just sold! If I raise the price to $98 my profit will be $17.30, but then it may never sell. Four people are watching the listing. It will be interesting to see how many remove it from their watch list after I raise the price.
If you are not getting your Ebay inventory at 70%-80% discount you are giving all of your profits to Ebay. Many people have complained about Ebay’s unfair practice of using sales tax in their final value fee calculation. I can see why they include the shipping fee. Sometimes shipping is paid by the customer and sometimes it is paid by the seller. But sales tax is not a fee that the seller has any control over. Why should the seller have to pay a fee based on the amount of sales tax that is collected on a transaction? It just doesn’t make any sense.