eBay sellers beware: Its fees now eat into postage costs

Update: 6 May 2015: Since writing this story eBay has upped a number of other fees including its charges for those who opt to pay for upgraded listing services such as 'gallery plus' and subtitles.See the Planning an eBay sale? Act now as fees are set to rise MSE News story and the eBay Selling tricks guide.

eBay users should beware new rules that now see the site taking a cut of postage costs, which could leave some users out of pocket.

The online auction website usually takes a 10% cut of the overall price of an item, known as a Final Value Fee. From today, this fee's extended to include any postage costs (see our eBay Selling Tricks guide and our Local eBay Deals Mapper tool).

Previously, sellers received the full amount listed for postage.

eBay says the move is aimed at encouraging sellers to offer free or low-cost postage.

Those who list postage as what it'll actually cost to dispatch the item will end up out of pocket, as eBay will now take a cut of this figure.

Plus, eBay rules state that you can't increase postage costs to cover eBay or PayPal fees.

So if you have an item costing £10, and postage costing £2, then under the old system, you would have only lost £1 in fees, meaning you would have effectively made £11 (disregarding PayPal fees, which are typically 3.4% plus 20p per transaction).

Now eBay will take £1.20 overall, leaving you 20p down.

MSE forum user shaun from Africa explains: "If the postage and packing costs start to incur Final Value Fees, sellers who only charge their actual costs will either have to increase their P&P, or pay the fees themselves. And I can't see many sellers wanting to be out of pocket on this."

Users can, however, still set starting prices at whatever value they want.

What do eBay users think?

MSE forum user Flyonthewall thinks if the new system leads to an increase in the number of auctions with free postage, the novelty will wear off.

He says: "People like to feel they're getting something free. If everyone has free postage though, you lose that edge of having a better deal than other eBay sellers.

"As a private seller, selling in small amounts and mostly things that aren't worth much, there's no way I could ever be better off offering free postage."

However, others consider the change to be positive. SpammyTheSpammer says: "Finally, an end to those who extort by charging excessive P&P fees."

How does the Final Value Fee work?

Once a buyer pays for an item, the seller's PayPal account is credited with the full sum, minus PayPal's own fees (typically 3.4% plus 20p, as mentioned above).

The Final Value Fee is due once eBay has invoiced you for all transactions made within that month. Your monthly statement should detail all eBay fees you have incurred and you then have a month to pay.

For private sellers, the Final Value Fee is usually 10% (some items are excluded). If you have a business account, it varies from 5-11%.

For sellers offering more than one postage option, the new Final Value Fee will be taken from the delivery option selected by the buyer.

If a buyer chooses to collect an item rather than have it posted, as there's no postage or packaging to pay, the Final Value Fee will only be taken from the item cost.

eBay says the change "has been made to reward sellers who offer free or competitive postage, in line with customer expectations".