An explanation of my ebay postage and handling fee

Sometimes, I am asked how I calculate my ebay fees.  Here is an explanation.

Let’s consider a typical item I might sell:

A block of 4 x 24c Mint Unhinged Christmas Stamps.  I list the stamps at 99c with a $1.95 postage and handling fee.

The Ebay fees for a sale are:

Insertion fee = 30c

Final value fee (on 99c) = 5c

PayPal fee (on 99c) = 40c

Total fees =  75c

Add in FV of stamps = 96c

TOTAL = $1.71

This means that for a sale price of 99c.  I have made a loss of 72c.

Therefore, to cover such losses I charge a handling fee as well as postage fee, which is a flat rate of $1.95 per item.  This $1.95 needs to cover the real cost of postage (55c) + envelope (5c).  This gives us:

Fees: 75c

Stamp cost: 96c

Postage: 60c

TOTAL ITEM COST: $2.31

TOTAL COST TO CUSTOMER: $2.94

Profit = 63c

This 63c profit needs to cover my time (it takes 10 minutes to prepare an item for sale, photograph it, edit the photo, list the item, track the item, record the item, pack the item, put stamps on the envelopes and get it ready for posting).  So if I can sell six items an hour I make a wage of $3.78 an hour.  But it actually takes longer than this because I have to source my products too.  Some items do not sell the first time around and they need to be relisted.  This too can lead to an Ebay fee.  Then some buyers do not follow through with their purchase and then the item has to be relisted (and another fee paid).

Why do I bother?  Geez, now I have calculated it all out I must be an idiot!  I do it because every so often, an item sells for well above 99c.  And of course when people buy multiple items I make more money.   I therefore give a 25% postage and handling discount to those why buy multiple stamp items.

So there you have it.

I do try and make it very clear on my listings, what my costs are and that if people don't like my charges then they shouldn't bid.  But people still complain.

I hope this explains why I charge what I do.  I have no idea how others stay in business if they don’t charge like I do.  Either they pay themselves nothing or...

Cheers,

David