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When Did eBay Start To Suck?

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Sunday, February 9, 2014
I'm trying to clean out a lot of stuff I don't need that's just taking up space and I've been listing some of these items on eBay and some on Craigslist. It's been a long time since I've used eBay and man have things changed for the worse!

When eBay was first becoming popular it was a great place to get good deals on used items that were no longer in production or if you didn't want to pay full retail price on something and didn't mind it being used. It facilitated consumer-to-consumer transactions and it did it very well.

Then businesses started selling overstock and reclaimed items selling new items from their inventory on eBay followed by a slew of people setting up drop shipping businesses using eBay selling items they didn't even have in their possession. As a buyer you could still find good deals but as a seller it looked like a race to the bottom where margins were constantly reduced. Found a hot product to sell from a drop ship supplier? Eventually someone else will notice and do the same but sell it for slightly less, then another, and another, until it's not even worth the time. At least that's what it seemed like was happening from my perspective.

Then the fees started to get really high. One of the worse is the Final Value Fee on Shipping. The way eBay works is you pay a small fee to list your item (they're now including a set number of free listings per month) and then you pay a percentage of the price paid for the item including shipping!

Say what!?!?!? eBay implemented the Final Value Fee on Shipping sometime in 2011 from what I can find. Let's say that you sell an item and it costs you $6 to ship it, eBay is going to charge you an extra 10% (depends on category I think) in fees. So even though you're charging the buyer for shipping, you're still forking over 10% of the shipping charges in fees to eBay. Not to mention the roughly 4% that PayPal (a company eBay owns) is going to charge you as well.

If you print your shipping online (you can also do this through eBay or PayPal) you get a slight discount on shipping. Looks like 4% from what I've done so far through the USPS. So you're still paying 6% on shipping in fees. The PayPal fees I feel are more legitimate because they are charging you for the money transfer. I can't find a legitimate reason for eBay taking a cut of the shipping fees.

eBay claims they're doing it to encourage more sellers to offer free shipping and to look for cheaper shipping options. What it looks like is happening is that sellers are using flat rate type shipping so they have a known cost and then adding on 10% to the price of the postage then using that figure to add to their starting bid or fixed price. That's the only way to get the buyer to pay for all the shipping and fees.

It's been a long time since I've bought things from eBay until recently. A few years ago, once Amazon opened up it's third-party Amazon marketplace, drop shippers just couldn't seem to compete with all the fees they had to spend between eBay and PayPal and as a buyer I rarely found good deals on eBay and stopped looking altogether.

eBay vs Craigslist

I had two nearly identical items I was selling. I had first listed them as a set on Craigslist but only got one offer from someone looking to split up the set, which I did. I had planned to sell the items for around $85 each and the guy talked me down to $80. He showed up one day, handed me 4 $20 bills (which I'm able to use right away) and I gave him the item.

I then listed the other item on eBay for around $85 and charged for shipping on top of that. That sold quickly as well and it was time to ship my item.

I have no need to keep shipping supplies on hand so I went to a local shipping store to send the item. I had seriously underestimated the cost of shipping. I had to pay for the box, the packing supplies, a small labor fee and in addition to that I recently found out they tack on a 30% surcharge to the shipping fee!

The extra cost for packing materials and labor is fine with me since it saves me time and money by not having to buy those supplies and do the packing myself but that shipping fee seemed expensive, especially since this was a pretty heavy item. I wound up paying about twice what I had charged the buyer. This was my mistake and chose to eat the cost.

On top of that I had to pay around $10 in fees to eBay ($1.50 for the FVF on Shipping), another $4 to PayPal and about $10 due to my mistake in shipping. I netted $61 for an item I sold for $85. Even if I ignore my shipping error I only came out with $71. Compare that to the $80 I made on an almost identical item I sold through Craigslist.

I wound up making an even more costlier mistake in a later auction. The shipping mistake can't be blamed on eBay. It's due to me not being familiar with how my shipper charged and not stocking my own supplies.

To make matters even worse I have to wait to get paid! If it wasn't bad enough eBay is charging me so much to use their service I also have to wait until the funds are released in my PayPal account. If I had a long history as a seller with a lot of feedback I think I'd get it right away but as of now I'm waiting close to two weeks after the end of the auction to get the money in my PayPal account and then however long it takes for me to transfer it to my back account after that. I have to pay for shipping up front out of my own pocket and if the auction ended towards the end of the month eBay also expects me to pay their fees as well.

The one big benefit of eBay over Craigslist is it exposes your items to a larger audience that is willing to pay for shipping on an item if they get a good price. I had a few items listed on Craigslist that I didn't get much interest in, maybe a couple of very lowball offers, that I had to eventually list on eBay. You also don't have to worry about people flaking out on you and wasting your time by not showing up when they say the will. Although all of my Craigslist have gone smoothly.

eBay vs Amazon

Now you can also sell used stuff on Amazon.

Another electronics item I sold was for $20 including free shipping. eBay charged me $2 in fees, PayPal $0.80 and flat rate priority mail was $5.70 after discount. I got the packaging free from USPS.com and had some other shipping supplies for padding. After all was said and done I ended up with $11.50.

If I had sold the item on Amazon for the same $20 including shipping. I would have received $6 as a shipping credit and paid $0.99 + $1.12 in fees netting me $12.19. The fees for electronics are only 8% but on some other categories they are up to 15%. This seems to include all the money handling fees as well so you don't need PayPal. The pricing is similar.

Just like Amazon took a lot of the drop shipping retailers away from eBay it looks like they might wind up doing the same in the used market. At least taking a good chunk of it. They even have Amazon Payments, a competitor to PayPal.

Best Selling Platform For the Occasional Seller?

I'm not trying to start a business selling these items online. All I want to do is get rid of some stuff I don't need or want anymore and I'd feel bad about putting them in the trash. As long as I wind up making a decent amount of money based on the time I'm spending to sell them I'm happy. So far it's working out pretty well, even though I've made some mistakes in shipping that wound up costing me a decent amount of money.

To avoid these shipping mistakes in the future I've purchased a SAGA Digital Postal Scale to make sure I have accurate weight on packages and Avery 8126 Shipping Labels so I can print out my own discounted shipping. I'm going to try to use priority shipping as much as possible where I can get the free boxes to minimize my costs.

For big, heavy, bulky items I'm going to first try Craigslist. I might even wind up giving some stuff away just so they don't go in the trash.

Amazon looks interesting and I'm going to look more into it.

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