This question keeps coming up. So, I’ll continue to post an answer that I gave before…. Here [URL removed]

OK, I’ll attempt an answer for all of you.

(1) PayPal charges fees on the total transaction because they are in the business of processing money. To any payment processor, it doesn’t matter to them what the split is between selling amount and shipping amount. They are processing a total amount and fees are charged on that amount. That does seem fair.

(2) I believe that eBay started the practice of charging FVF on the entire transaction amount. The opinion on why/how it got started is shared by many people who have questioned this practice. Before eBay started the practice of charging FVF for shipping, they were seeing a lot of expensive items being sold at ridiculously low prices ($0.01 to $1.00), while the seller was simultaneously charging exorbitant amounts for shipping. This meant two things were happening. First, buyers were upset when they didn’t read the fine print and found out that they owed a lot more for the “inexpensive” item they won at auction. The other side of this is that eBay found that many sellers were exploiting this procedure to avoid paying FVF on their sold items. Also, as eBay noted at the time, the buyer experience was suffering due to the actions of some sellers.

In other words, instead of selling an item for $20 and shipping it for $5 (which would have resulted in about $2 to $3 in FVF), sellers where charging $1 for the item and charging $24 to ship the item. The seller would then pay FVF on only the $1. So, to avoid losing revenue and ticking off buyers, eBay started charging FVF on the entire transaction.

Amazon does it a little differently… they limit how much you can charge for shipping certain item categories. If you want to sell on Amazon, you must adhere to their shipping charges.

Then Bonanza came along and offered a much fairer deal. They waive FVF on the first $10 in shipping. Most sellers can probably ship within that $10 shipping target and not pay any FVF on the shipping portion of the transaction.

This is my personal opinion on why FVF are charged on shipping costs. So, try not to rain hate down on me… not saying that I agree with it, but it may be the only way to keep the majority of the people happy and having sellers pay their fair share of FVF without having to require “proof” that seller’s shipping costs exceed the $10 FVF-free amount.

eBay did NOT learn their lesson when they lost the multi-million dollars class action suit filed by eBay Motors’ sellers?! If you’re not providing a service then you cannot charge a fee!
USPS, FedEX, UPS …etc are the ones providing the shipping service! Ebay is filing this as a “business expense’! How is it an “Expense” when you’re making millions of dollars on it?! By the way, on the off chance you don’t know, the IRS doesn’t tax businesses on expenses! So, this money is all tax free! Talk about “cooking the books”!
Basically what should have happened was implement a “bot” like they do on most everything else that checks the shipping charge to product value charge. Then if there is something in question, the seller should be notified that the item is in question and not let them post it until they have an ebay rep actually check it.

Hello again John, My understanding is that Bonanza charges Selling Fees on any shipping over 10.00. A lot of the selling sites now charge there selling fees on the total shipping fees. This came about I think because sellers were putting some of there product asking price into the shipping fees thus avoiding some sales fees. It does still happen. Actually Bonanza is ones of the better venues to use regarding fees on shipping cost. Also I find Flat rate boxes a costly way to ship in most cases, You may be able to save some money there……….Have Blessed Family Christmas………Fathertime

Bottom line… the dishonest manipulating sellers ruined things for those of us who just want to do good business. We ship internationally so paying fees for shipping, even minus the $10, gets very costly. Will never accept that Bonanza makes money on our shipping costs when we do not. But I am very invested in selling on Bonanza and have just learned to live with it as they offer a lot of positive aids for sellers. Good luck and happy selling!

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