Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat Feb 18 2017 22:30:08

Should eBay and Etsy Be Taking a Cut of Shipping?

By: Ina Steiner

Sponsored Link

Etsy CEO Chad Dickerson finally revealed what sellers have long suspected: marketplaces take a cut of shipping purchased on their marketplaces.

"We buy shipping in bulk and resell it to our sellers, and we take a small cut of that," Dickerson revealed during a presentation at Goldman Sachs 2017 Technology and Internet Conference on Wednesday.

While Etsy rival eBay has kept silent about its financial arrangements with the USPS and shipping carriers, it's generally assumed that eBay also takes a cut every time a seller purchases and prints a shipping label directly through its platform.

At the same time, eBay tries to persuade sellers to absorb the entire cost of shipping rather than passing it on to buyers. In an email over the recent holiday shopping season, eBay told sellers that 61% of buyers said "free shipping" was the biggest driver of purchasing decisions.

You might think marketplaces would do everything in their power to drive down shipping costs to remain competitive - especially in the face of Amazon's free-shipping programs. 

There's no question that as online shoppers increasingly expect free shipping, those costs continue to rise. But it seems the secret deals marketplaces make with the Postal Service make skimming irresistible.




Comments (66) | Leave Comment | Permalink

Readers Comments

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: FeelingFroggy This user has validated their user name.

Sun Feb 19 05:29:55 2017

Just like the mobd in las vegas years ago.....Skimming off the top improves the bottom line.

In the case of the mob illegal....In the case of Ebay NOT ILLEGAL JUST IMMORAL.

Until laws are passed to regulate the ilks of Ebay, Etsy, Paypal and Amazon the skimming will continue.

Sellers know this when the sell on these platforms. If you don't like it go elsewhere.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: pace306 This user has validated their user name.

Sun Feb 19 08:29:58 2017

There are 2 separate questions here:

1) should eBay have the right to charge you a FVF on the shipping portion of the sale AND

2) should eBay make money reselling a USPS shipping service.


Those are 2 markedly different things.

I have an issue with the former since it pushes eBay to do the wrong thing over and over again.

As for the second, Stamps.com makes money off selling USPS services so why cant eBay. "as long as *I* am not FORCED into using their services (and Im not) and I agree upfront to their prices - why not? It doesnt hurt me if eBay gets "super duper commercial plus plus prices" and makes a small cut and only gives me commercial plus pricing.

So Ina - is your question the first or the second?

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: Volvo351 This user has validated their user name.

Sun Feb 19 09:24:16 2017

It's ONE thing to mark up shipping when you're getting a discount off of the retail rate that the seller would ordinarily be paying. It's quite ANOTHER thing to slap a "Final Value Fee" on the actual cost of shipping paid by a seller. So, I'd give a Thumbs UP [or at least neutral] to what Etsy is doing as set forth here. What feeBay does, on the other hand, is theft.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

This user has validated their user name. by: toolguy

Sun Feb 19 11:07:50 2017

And eBay wonders why so many sellers take their deals OFF ebay!

You can only squeeze so hard before you're squeezed back. (and that ain't love)

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

This user has validated their user name. by: bitbybit

Sun Feb 19 17:57:34 2017

I have no problem with Etsy or Ebay taking a cut out of the shipping rate deals they made with USPS, FedEx and UPS. My disagreement has always been on the unethical FVF shipping charge. Did eBay ship my items? Did eBay handle my items by packing them? What exactly did eBay do to garner this shipping fee? 

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

This user has validated their user name. by: eXtinctBay

Sun Feb 19 17:58:12 2017

I have always disagreed with eBay's taking a fee on shipping that is paid for by THE BUYER.

Whether you as a seller charge the exact mailing cost to the buyer or add it into your ''FREE SHIPPING'' item price, it is wrong for eBay to collect fees on something necessary to complete 99.99% of transactions.

Yes, they claim it had to be put in place to penalize those who list an item for a penny with $100 shipping.

If the eBay bots can easily (and often annoyingly) detect certain wording in a listing title or item description, it would be just as simple to see when an out-of-line shipping cost is applied.

But since this is a big money generator for them, why bother??

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: 27tcle This user has validated their user name.

Sun Feb 19 18:45:38 2017

Taking a cut on shipping is OK, buy in bulk and sell at a profit is the name of the game. It's business. Final value fees on shipping cost is NOT OK as shipping is what it is, packing materials are NOT CHEAP and on the tax paper is a significant expense item.

Sure some people gamed the system by selling at a penny and 200 bucks shipping, but this simply means that these sellers need to prove to ebay that they really spent 200 bucks to ship an item, not that ebay should take a cut on the shipping cost like they do now. FWIW, i gave up and included the shipping plus packing in the price and went Fast n Free long ago.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

This user has validated their user name. by: Beanie

Sun Feb 19 20:47:37 2017

I don't sell on any of the ''venues'' any longer and haven't for years,  but I have a few questions. What happens when a seller ships an item with ''free shipping'' and the buyer decides they want to return the item? Since it was shipped ''free'', is the buyer responsible for paying postage to send it back? Or does Ebay make the seller cough up the return shipping cost even though there was supposedly not a shipping cost? If buyer has to cough up the return shipping, has this, in your opinion, halted real or frivolous returns dead in their tracks or not? Inquiring minds want to know!

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: comments This user has validated their user name.

Sun Feb 19 22:07:32 2017

I always just assumed ebay did take a cut. Why else would they push usps or negotiate rates? Then why would they ditch UPS for FedEx? That was pretty obvious. I would have been a lot more surprised if someone confirmed they did not take a cut.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: comments This user has validated their user name.

Sun Feb 19 22:09:44 2017

Oh and forgot to answer the question. Ebay and Etsy should take a cut....why not? They integrated the shipping labels and that makes things a whole lot easier. The service certainly has value and is worth paying a few cents for. It isn't like it is cheaper elsewhere.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

This user has validated their user name. by: eXtinctBay

Sun Feb 19 22:27:06 2017

@Beanie

The seller pays shipping both ways if the buyer merely states the item was Significantly Not As Described (SNAD).

If the buyer does admit they ordered the wrong item, or has buyers remorse, they are responsible for return shipping costs, even on ''Free Shipping'' items.

Most of those who pursue frivolous returns know how to game the system and just claim SNAD to avoid paying to send a package back. Even though eBay has established rules which (supposedly) are in place to deter such behavior, ''liar buyers'' still are allowed to run rampant on the site.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: wanda This user has validated their user name.

Mon Feb 20 00:20:47 2017

It's like yet another hidden tax... and who pays in the end, these corporations?  Never.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: sparky This user has validated their user name.

Mon Feb 20 00:25:13 2017

I disagree with ebay taking fees from shipping as if it is a part of the sale. It earned the name ''feebay'' that way.  As for postage, it's not surprising.  As for sellers paying return postage for a customer return. Totally scammed most of the cases. It's a warehouse where sellers bring merchandise, set up, market, ship with the warehouse owner taking every possible fee with not much help to any of the sellers WHO ARE ACTUALLY THE WAREHOUSE OWNERS CUSTOMERS. The ebay customers are indeed sellers' customers. Oh, and do sellers get any dividends from ebay stock? Of course not.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: handmedownheaven This user has validated their user name.
Web Site

Mon Feb 20 00:53:16 2017

I highly disagree with eBay taking a FVF out of shipping.  If we charge the actual amount of shipping, after their fee we are losing money on shipping.  I loved even more during Christmas when they were pushing priority mail that they would get that much more in fees.  But rest assured it will never change.

Now as for them making a little off of it, I can live with that.  I ''thought'' I was going to save money by using stamps dot com.  The discounts were identical and the stamps company was charging a monthly fee on top of that.  At least eBay don't charge a fee to get the discounted shipping

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: DizzyDame This user has validated their user name.

Mon Feb 20 01:46:16 2017

Absolutely not. I have known all along that they take a percentage and never agreed with it. I don't know that there is anything we can do about it. But if there is, I would be willing to participate.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: Beth This user has validated their user name.

Mon Feb 20 02:58:38 2017

The price I pay ebay for shipping is less than the price I'd pay on USPS's website.  So I don't care how much of the discount they withhold.

I do care that they take a final value fee out of that shipping and "god forbid" if I add a handling fee to compensate.

One day soon they may wish they had listened to those of us who have complained about that practice.

Of course, I also think the USPS could give us the ebay rate when we shipped thru clickn'ship if they issued us some kind of cookie to trigger the discount

Of course, people/humans could do that but I'm not sure the programmers are smart enough to do the software to make it happen

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

This user has validated their user name. by: Marie

Mon Feb 20 03:01:12 2017

These sites, all of them, NOT just Ebay, are under contract with USPS.  There are things they can say and there are things they can't.  Amazon found that out the hard way last year.  

The commercial rate is what it is.  It is the same on ALL sites that offer it.  There is no differences in this area.  

Of course sites offering postage on line make money doing so.  Why wouldn't they?  Or did you really think there were just here to serve us and not make a dime?  How would they pay their vendors or their employees if they weren't making money?

As for FVFs on shipping, Ebay isn't the only site that does it.  Heck Amazon even still charges a label fee of 7 cents.  Ebay and PP did away with that fee years ago.

But I too don't like the idea of FVFs on S&H.  I think that is counter productive because sellers have to charge more to cover those fees.  I think customers would buy more if the cost of shipping wasn't so high.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: skl3255 This user has validated their user name.

Mon Feb 20 03:52:50 2017

Ebay has been skimming off the top of the commercial price arrangements of our postage and taking an additional 10% FVF as well.  I try to pass that 13% cost of shipping taken by Ebay and Paypal on to my customers because I don't feel I should have to subsidize their shipping charges.  I rarely offer free shipping because my margin on the final selling price is very low.  This is what I need to do to stay competitive. Customers complain about shipping fees but more often that not I still lose money on the shipping charges because I  base my shipping charge on the most economical method to ship.

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: rachel This user has validated their user name.

Mon Feb 20 04:20:11 2017

eBay also makes money on returns where the buyer says there was something in item that doesn't match description so that they don't have to pay return shipping.  eBay charges if they give us the label 10.50 for the cheapes smart post rate even on more expensive items. If I I ship I pay priority mail with signature to make sure the buyer gets it due to porch shopping and increases in mail theft at it is 8.90 It's not the smart post rate which is lower so eBay makes money when it's a not as described claim BS or not.  

Perminate Link for Should eBay and Etsy Be Taking a Cut of Shipping?   Should eBay and Etsy Be Taking a Cut of Shipping?

by: cvsharkey This user has validated their user name.

Mon Feb 20 07:00:46 2017

PayPal also takes a fee on shipping, so you're being charged double-fees. But if added together you still about break even on what the post office charges. And they no longer give a break for online shipping purchases as they had been doing.

However, encouraging sellers to provide free shipping WHILE also charging a fee definitely leaves a bad taste.

Click to view more comments
1 2 3 4  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.