Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat Aug 13 2022 09:19:31

eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

By: Ina Steiner

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eBay and Etsy charge a commission fee on shipping above and beyond payment-processing charges. As a result, when shipping carriers raise fees during the holidays, sellers end up paying online marketplaces what could be characterized as a "shipping tax." It's a fee increase that the marketplaces don't have to publicly announce!

On October 2nd, the USPS is raising rates for packages sent Priority Mail, First Class Package Service (FCPS), Parcel Select Ground, and USPS Retail Ground that will be in effect through mid-January. In an article about the holiday surcharge on Wednesday, we used two examples of small or lightweight items to show the low end of the impact on sellers.

A Priority Mail Small Flat Rate Box will jump from $8.25 to $9.00 if purchased online (Commercial Base) - an increase of 75 cents.

A one-pound Priority Mail package going to Zone 9 will jump from $16.39 to $17.19 (Commercial Base) - an increase of 80 cents.

eBay charges 12.9% on the total amount of the sale up to $7,500 calculated per item in most categories (booksellers pay 14.6%, clothing and jewelry sellers pay 15% for items up to $2,000 and $1,000, respectively - see the chart on the eBay website for details.

To reiterate, the commission fee includes payment-processing costs - but before eBay instituted Managed Payments, that was approximately 2.9% (PayPal fees). So if you take the 10% difference and multiply it by the 75 cents extra sellers will pay per flat-rate Priority Mail package beginning in October, that means sellers pay eBay an extra 8 cents per package.

Using that extremely conservative example, eBay would earn at least an extra 8 cents for every package shipped using USPS during the holidays. And of course FedEx and UPS also institute peak shipping surcharges.

With Etsy's fee increase instituted in April (from 5% to 6.5%), it means this year's higher holiday shipping rates have an even bigger impact on its sellers than in previous years.

While sellers can use calculated shipping to pass along the higher shipping costs to buyers (or change shipping costs manually), that won't spare them the extra fees they pay to marketplaces. (Sellers who offer "free" shipping face the same higher commission fees if they raise their prices to account for higher shipping costs.)

It would be fascinating to hear from sellers on how eBay and Etsy's "shipping tax" will impact them. Break out the spreadsheets, and let us know.

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Readers Comments

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: GetAGrip This user has validated their user name.

Sat Aug 13 12:02:56 2022

Smart sellers have already raised shipping costs to the buyer. Its a no brainer.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

This user has validated their user name. by: Rexford

Sat Aug 13 15:12:35 2022

USPS, eBay, Etsy...........PIGS AT THE TROUGH!!!

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: terry55 This user has validated their user name.

Sat Aug 13 17:16:34 2022

Only thing we can do, raise shipping price until we just don't sell anything anymore. Ebay's just standing there with a stupid look on their face, they need to get their lobbyist on the job but then again why would they.  

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

This user has validated their user name. by: The End

Sat Aug 13 20:31:29 2022

You're telling me Etsy and Ebay DON'T need government oversight ?
You're NUTZ !

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: billly This user has validated their user name.

Mon Aug 15 00:08:31 2022

A "Holiday Shipping Tax" that literally commences almost 3 months until "the holidays", unless you consider Columbus Day and No Bra Day holidays.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: toyspast This user has validated their user name.

Mon Aug 15 00:31:34 2022

Since when was a one-pound Priority package to zone 9 $16.39? Sounds more like a three-pound package. One pound is somewhere around $9.  

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: Stone Cutter This user has validated their user name.

Mon Aug 15 00:40:24 2022

And all this, as many economists believe the consumer will slow down spending this Fall.

As the Federal Reserve continues to increase interest rates, it’s been said that every interest rate increase takes a good 4 months to be felt by the consumer. Once interest rates increase on credit cards, I’m afraid Retail will begin to really suffer.

All I can do is try to be the best jewelry artist I can be, on Etsy. I’ve raised my prices by 15% in the past 6 months and sales are still good, however, it now takes longer to sell pieces.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: Zigmund This user has validated their user name.

Mon Aug 15 02:04:33 2022

Not enough that sales are very much down for my shop on Etsy, and my wife's shop on Rubylane( for handmade jewelry. Looks like shops from China are dominate Etsy. I haven't had a sale in the last two weeks almost, while usually I sell 2-3 posters a week. Rubylane is having their Red Tag Sale of 50% and this is the second time my wife hasn't sold a thing. The previous sale was about 5 months ago. Regarding more taxable fees....I'm sure Etsy soon will come up with a new fee, something "renewable energy" crap, or "clean air" or "new age" fee/tax...or mothf...r tax..

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: Zigmund This user has validated their user name.

Mon Aug 15 02:08:00 2022

...and yes, I am happy to raise prices on my posters, regardless they sell or don't. We need to show the buyers, that HandMade items are have value, vs mass produced from china.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

This user has validated their user name. by: Lightning

Mon Aug 15 02:14:01 2022

@toyspast
It is correct at $16.39 for 1 lb. Priority to Zone 9.  That's because Zone 9 is the U.S. Territories.  We all ship there, right? ;)

Zone 8, coast to coast, is $9.68.  Rates obtained from PirateShip.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: Cbaker This user has validated their user name.

Mon Aug 15 04:35:51 2022

Those calling for “government” oversight need to be careful what they wish for.  Someone obviously isn’t watching what the “government” is doing.  Check your tax bill this year and be ready to be audited by the 87,000 new IRS agents being hired…and armed.  The USPS was given permission by “the government” raise rates so those rates are being passed on to us..nothing we can do but pass them on….and vote.  

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: JohnGermaine This user has validated their user name.

Mon Aug 15 08:34:35 2022

I am no longer interested in online selling.  I didn't mind the fees when I started, I know that a brick and mortar is way more expensive.  But the EXTRACTION from us has become insane.  Your company is so lame that it now has to extract money from every corner to turn a profit???  Or is it your company has to extract money at every corner so the CEO can make a FAT BONUS.  Either way, I am done!  No more evilBay and no more Etsy.  Enough is enough.  I moved across the country and so shut down last December 15th as I packed it all up.  I got to my new location late March and started unpacking and putting everything back together with a plan to get rolling again.  Previous to my shut down, I saw that from my selling that I was getting home with 1/2 of what I was grossing.  I can tell that now it will be worse and I am NOT going to be working my buns off for either evilBay or Etsy and the Post Office.  I'm done.  I'm going to yardsale and Nextdoor off what I have left.  I'm going to look and see if they do BooKoo here as well.  Tired of feeling ripped off by the corporations.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: pace306 This user has validated their user name.

Mon Aug 15 08:54:42 2022

The "Original Sin", one that we are ALL still paying for (one beloved and defended by a few here as well) is allowing sites to charge FVF on shipping.

Somehow, its our fault that eBays original business plan didnt take pricing on items and shipping costs into account. Years later after eBay realized that the dope that came up with the business plan, didnt take shipping into account - instituted a VIG on shipping.

While it may be true that from an accounting point of view, shipping is part of the total sale - but in actuality eBay has nothing to do with shipping (and makes money off it as well)(we covered this last week for those playing along) and so FVF on shipping is just a rip off (usual eBay tactic)

Had sellers stopped it then, it wouldnt matter (subject here today).

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

This user has validated their user name. by: The End

Mon Aug 15 09:13:37 2022

Cbaker :
We don't have a choice.
When corporate gets full of itself and rips off the people without limits, government watchdogs become the thing.
When Government rips off the People, WE intervene.
That's how it needs to function.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

This user has validated their user name. by: The End

Mon Aug 15 09:18:46 2022

Cbaker : Oh We're watching the Government O.K.
I dare you to publicly display your U.S. Flag UPSIDEDOWN as it should be Right Now.
DO IT !

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: eastwestphoto This user has validated their user name.

Mon Aug 15 09:33:44 2022

eBay seriously NEVER does enough about their SCAM international buyers.! Lousy thieves claim INAD lies and get to keep the item & their money back. This is why so many Professionals have left eBay! Its eBay Fault and stupidity, because Pro sellers are also Pro Buyers. This is what happens when 23 year old are running a robot company, Self Destruction, eBay's Board of directors are so lazy and dumb.  

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: NYSteve This user has validated their user name.

Mon Aug 15 12:19:23 2022

@Billly- when exactly is 'no Bra day'  this year?

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: Stone Cutter This user has validated their user name.

Mon Aug 15 12:24:03 2022

@Cbaker
Do you really believe that 87,000 new tax auditors will have any interest in an Ebay or Etsy seller? What a waste of auditor wages that would be! Stated by the government...these new auditors will be going after wealthy individuals and businesses who are cheating on their taxes. It is said that for every $1 dollar paid for auditors, $5 dollars will be collected.

And haven’t you been listening? USPS has been in “the hole” for many years due to a payout of expensive pension and benefit plans for their employees and its not like healthcare has gotten any cheaper. We can all debate if employees should receive those benefits, however, this shortfall is why USPS needs to increase rates.

Government Oversight keeps businesses “in-check”, which is how it should be.  

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: CBW This user has validated their user name.

Mon Aug 15 12:28:19 2022

The fee affects me zero. I've always considered the discount shipping through EBAY as paying that fee and never refund shipping based on that difference.

If you are shipping without the EBAY discount, then you will feel the fee costs.

Perminate Link for eBay and Etsy 'Shipping Tax' Takes Effect October 2nd   eBay and Etsy 'Shipping Tax' Takes Effect October 2nd

by: Whatever This user has validated their user name.

Mon Aug 15 13:18:11 2022

Paying more? I guess I don't care but it would require selling something on ebay - I leave 65 standing listings - buyer pay freight and if someone wanders by great.

Meanwhile I've gone back to the "old fashion way" garage sales which are great for me - flea markets and trunk shows.

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