Fair Postage Charges Or A Postal Overcharge?????

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Understanding the true costs of selling on EBay; The postage charges that will result from Royal Mails new postal charges and EBay’s Fee Changes.

The example is based on an EBay store that is selling low valued items, all with retail Buy It Now price average of £4.00 per item. Average number of sales from the store per month is 100 sales. 90% of sales are paid via Pay Pal.

Current postage charge per item is 95p and is needed to calculate the fees below.

As of the 21st of August, these are the fees and expenses each sale of £4.00 will incur.

-£00.06    £6.00 a month Store Fees, on an average of 100 sales a month
-£00.14    Listing Fee With Gallery for each 30 days
+£04.00   Items Sells within the 30 days of listing*
-£02.00    Cost Price of the item sold (on the basis of 100% mark up!)
+£00.95    Postage paid by buyer*
-£00.40    10% EBay Selling Fees
-£00.20     Pay Pal set Processing Fee
-£00.17     Pay Pal Fees at 3.4%, which is charged on the whole £4.95*
-£00.10     Charm is boxed for safe carriage
-£00.02     Business Card / Comp Slip / Printed Receipt sent in packet
-£00.09     Mail Lite 000 Envelope, average wholesale cost to seller
-£00.01     Returns address label
                 4 – 5 miles per litre @ £1 per litre. Average 3 mile round trip.
                Average of 25 trips to Post Office per month = 75 miles = 15 
-£0.15      Lts. £15 divided by 100 sales
-£0.37      2nd Class postage costs, box + Mail Lite exceeds 5mm
+£1.74     Balance

To simply sell one item at £4.00 on EBay, in an EBay store with payment via Pay Pal, costs the seller a grand total of £3.71 per item, £1.71 of which is postage, packaging, selling and processing fees.

And the £1.65 is based on the Post Office being just 1.5 miles away, is assuming that only one 14p Listing Fee is incurred, doesn’t take into consideration the man hours taken to buy, list, process, invoice, pack, deliver or leave feedback for the sale and it certainly does not leave any room for claims of non-delivery or the EBayer’s who purchase items and never pay for them!

Based on 100 sales, this store will have physically sold £400 worth of goods and they should therefore, see £200 return for all their efforts, but the truth is that they will actually see £174 for one months work …….. oops but then of course, there is the £29.99 for their Broadband Connection, and that needs a telephone line, so that’s about £11.99 a month …….. and then there’s the inkjet cartridge for the printer at £17.99 and a realm of paper………..

Simply put £1.65 in Postage and Packaging charges, to send one small item by 2nd Class postage is the MINIMUM amount that a buyer should now expect to pay. Anything below this and the seller must add the costs to their selling price and…….. as we all know, that simply prices EBay sellers out of the market place!

As a seller, please check your true costs! As a buyer, please be aware that postal charges that exceed the costs of the goods are not always as a result of a seller over charging postage!  Whilst we do not pay EBay Fees on our Post and Packaging charges, we do still pay 3.4% or 2.9% to Pay Pal!

My current postage charge of 95p will rise, it has to, or I will be making a loss and then there is just not a lot of point in my EBay Store being here!

Please don’t judge an envelope by it’s stamp alone!

*Amended on the 24/08/06 to incorporate new Shop Listing Fees


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