eBay


I have recently sold some audio equipment on eBay and noticed that eBay charges 13.25% on the sale of the item sold, but they also charge that same % on the sales tax that they collect! 🤔 is this legal? This just seems strange to me. 🤷🏻‍♂️

thedoc2004

That is legal for eBay to collect sales tax based on the buyer's state residence. The buyer is responsible for the sales tax so it does not affect the seller. The tax % varies by state. This new rule has been applied for a few years. 

no I guess what I’m trying to say is if I sell something for $300 they could charge me the 13.25% but if the taxes $30 they are also charging 13.25% on that $30 so they are collecting the 13.25% on $330 not the sales price of $300

They charge 13.25% of whatever the complete total you pay for an item. I have sold on eBay since the beginning and have sold many thousands of items. Combining the approximate shipping cost to the furthest city away from me, factoring in box & packing helps me determine a Buy it Now price. Then I add 7% to the final cost to the buyer as I always offer free shipping. This way sharing the the eBay fees with the buyer and only pay about 7%. Selling on eBay might seem expensive, however the results, due to massive exposure, lead to quick, easy turnarounds. Then there are the easy shipping labels, checkouts, buyer & seller protection. I am now nearing the end of liquidating my record collection of over 700 album, only about 200 to go. To me it is not a rip off at all and an easy way to buy & sell online.

I just feel that eBay charging me 13.25% on the sale + the tax + the shipping isn’t fair. They should be only charging me the 13.25% on the sale price not the shipping and tax. That’s all I’m saying. They are making more money on the tax and shipping and they shouldn’t be charging me for it. But what do I know! 

"They are making more money on the tax and shipping and they shouldn’t be charging me for it."

- maybe, but they are handling the funds and dispersing funds to the IRS, and the shipping companies to make it easier for buyers & sellers. That requires management and attention, therefor money. stereo5 is correct, maybe eBay is not for you.

@ OP

That was part of the User Agreement when you sign up, so it's legal.

A little background around fees on shipping. Years ago, sellers tried to circumvent ebay fee system by selling an item at a very low price $1 and charge a shipping $1000 (for demonstration purposes) because ebay charges fee only on the Sell Price, not shipping fee. To solve this problem, fee on shipping cost was added.

In my experience, ebay has often charged too much for sales tax for my state.  When questioned their response was basically “we’re not going to change anything”

@cfa88

Now that was a well written, productive post that educates and enlightens. Makes perfect sense to me, and I would do the same. Thanks for the informative post. 
 

Best-

If purchasing an item from a different country, watch the conversion rate eBay offers to you. Perform a quick currency swap price  online. Every time I have checked before a purchase, eBay has undervalued the USD. Having the credit card company set the conversion rate vs eBay doing so saved a significant amount of money. 

Many missed the point of this.  Don't know if it is legal but it isn't ethical.  their fees should be based on sales price (and they used to be).  Then the figured out that most won't notice if they charge the fees on the shipping  too.  So if your shipping is $10, you'll have to charge $12 or pay $2 yourself.  I guess they argued that they do this so you won't sell a $10 itm with $2 shipping for $2 with $10 shipping.  So 1% of ebay sellers tried to work the system and the other 99% get to pay and ebay reports an earnings gain.

As for sales tax, ebay keeps all of that and sends it to the state etc.  so I don't think they are charging fees on it.  But if they caluculate your fee based on it, then they are really just adding a defacto fee increase.

Jerry

 

"their fees should be based on sales price "

It is, the total sales price. What the buyer actually pays for the item and that includes taxes & shipping costs. It's the same as if you bought it from a store. For example: The retail price of the generator on the shelf has the shipping to the store, taxes paid, etc. built into the retail price on the sticker and (if you are a sales tax state) more tax. eBay is just a big store that shares it's info because it's participants are both buyers & sellers on the same venue.

BTW: The buyer does pay 13.25% of the added sales tax.

I haven’t had any problems with eBay and I’ve sold and purchased quite a bit. They charge their commission and my state sales tax. I don’t see what’s wrong with that. It’s mind boggling that they can expose your items to a huge audience of buyers interested in just what you’re selling. And that’s what you’re paying for. If that’s not a good deal for you sell your things another way. 

@thedoc2004   List  on AudioMart where it is free.  I have sold every item I have ever listed on that site.  Why pay any fees when there is a site dedicated to Audio equipment.  Ebay may give you exposure, but AudioMart gives you exposure to the right audience.  IMHO   

The OP's point about eBay being unethical in the way they charge their fees is understandable but I look at it a little differently. 1) The fee structure is transparent; it is in their user agreement, 2) As pointed out above it circumvents any games a seller might play with pricing and shipping, 3) If eBay didn't charge a percentage on shipping and sales tax they would just raise their fee on the price of the item. Instead of 13.25% perhaps they would charge 15%.

I've sold quite a bit of stuff on eBay over the years and even though I'm irritated at some of their policies, I continue to use them. One of the most important benefits they provide is that they have negotiated very attractive shipping rates. If you book you own shipping you will see that it is much more expensive than going through eBay.

You may have a complaint about charging fees on shipping and taxes but IMO the fee that eBay charges compared to the service they provide is still a bargain. I'm old enough to remember the days before eBay when selling a piece of stereo gear was a big hassle. You took your component to your local stereo store (if you had one) and stood there powerless while they offered you 20% of its value if they would take it at all. Your only options were to put it in the closet or take it to Goodwill. So you took a deep breath and mumbled "OK." Paying around 15% or so to achieve an honest auction value for an item is a much better alternative in my experience.

eBay becomes super greedy with their charging tactics 

overall eBay charge 15-16 percent fees and tax every item I sold 

the sad part people don’t understand how  eBay charges both ways seller and buyer 

seller pay fees and tax buyer pay only tax 

Another big beef, eBay sides with buyer regardless how you list. Example; amplifier sold everything working, package arrived visually in good shape. Through jarring various lights weren’t working buyer wanted his money back, my options were believe buyer and pay an out-of-town repair, or refund all fees. Refusing eBay then refunds all charges to buyer let’s them keep the amp and wants to bill me for everything !!  Of course I told eBay to eat S…  I successfully sell elsewhere, and use eBay through other accounts when necessary, lesson read the fine print, ensure your articles.

Ps ;  As a seller use a checking bank account just for eBay (as did I) without an overdraft so that you can close it instantly should things go bad because they do have the right to get in there anytime they want, again read fine print. 

Cheers 

eBay didn’t charge a fee on shipping and the last time I bought something, they didn’t charge me a fee on the tax.

in the past, you would see a widget for sale on the cheap but the shipping was 10x more than what it actually cost to ship.

@8th-note  nailed it btw....

Paying around 15% or so to achieve an honest auction value for an item is a much better alternative in my experience.  

At the end of any day, eBay is a 24/7/365.25 auction at its' core.

As is Audio Mart, and the plethora of others for that which boats your float...;)

And shipping frequently becomes Your Problem.

15% is the price of admission to their vast buying audience and site logistics.  Seems fair enough to me.  I have bought and sold a lot of Tubes (best site to sell on) , CD’s and LP’s  with great success on eBay.  Higher priced items like components I sell on another site to avoid the high fees.  

Yes, I have talked with eBay and all they say is this is what they charge. No real explanation, other than that. 

"eBay didn’t charge a fee on shipping and the last time I bought something, they didn’t charge me a fee on the tax."

- that is because the seller pays the fees to eBay, not the buyer, unless it is embedded in the "Buy it now" price by the seller.

"15% is the price of admission to their vast buying audience and site logistics." - "overall eBay charge 15-16 percent fees and tax every item I sold " - " the sad part people don’t understand how  eBay charges both ways seller and buyer seller pay fees and tax buyer pay only tax"

- don't know where you all are getting this information, eBay charges 13.25% selling fee.

"No real explanation, other than that"

- why would you think they owe you an explanation? One either uses their business or doesn't.

you are right, doesn't seem right (forget 'fair', life's not fair)

ALSO, the tax was paid originally when the item was purchased. Is ain't fair that they keep getting tax, over and over, every time a used item is sold.

Your state's DRS (Department of Revenue Services) may have something to say about this. They regulate sales tax among other things.