I used to be a big fan of eBay. It used to be a safe and nearly guaranteed way to convert old electronics into cash. Lately I’ve be come increasingly disenchanted with the experience. I’ve been a victim if hucksters in Russia and Mexico so I refuse to make my items for sale there anymore. Now I limit my auctions to just US and Canada. However, my last two experiences with our neighbor to the north are making me question that. This time it is not the fault of the buyer but the simple economics of international commerce. I decided to take a look at actual math of the transaction to see what I was making from the sale.
For this experiment I sold a Motorola Krazr K1 phone that was replaced by an iPhone in about 2010. This was a good flip phone with camera, bluetooth, and an MP3 player. Aside from being an evolutionary dead end it was a marvel of engineering. Apparently someone in Manitoba agrees but let’s not get ahead of the story. So this phone has been in a drawer unused for nearly a decade. The last time it was used was as an unlocked phone for European travel. The choice was electronic recycling or sell. The going price on eBay was $10-20. I figured if I could find it a new home then that would be one less phone in the landfill. My goal is to just not loose money on the deal.
Before I can ship the phone, I need to have an envelope or box to ship it. I bought a pack of padded envelopes, 3 for 79¢. So after tax I’m in for 29¢ already. I decide that since it does not weigh much, I can ship it first class for a few dollars. I decide to list it for $10 with free shipping. When it comes to the international shipping options, I block all other countries except Canada. For Canada, I obviously cannot offer free shipping so I opt for the actual costs plus $4 handling. I enter the package dimensions and weight. I think I’m protected if I get an order from north of the border.
A few days later, I get the notification that my item has sold. Instant payment comes in for $18.75. That’s my $10 sale price plus $8.75 for shipping. Hmm. No handling fee? eBay calculated this cost based on the origination, destination, dimensions, weight, and class of service (First Class Mail International). PayPal takes $1.13 right off the top so I’m left with $17.62 in my account.
Now it is time to buy postage. eBay has a deal with USPS so that you get tracking and a discount. This way everything is tracked to destination. You can go to the post office, but this is usually a better deal. I punch in the package dimensions, weight, and destination into the system. It comes back and tells me that shipping costs $9.98. For those of you playing at home, you will notice that $9.98 is greater than $8.75. This makes no sense. Why didn’t eBay calculate the same amount? I’m now left with $7.64 in my PayPal account.
Off we go to the post office. I’m not including the mileage or the cost of the tape in my calculations — this time. Package is mailed. All is good. I’ve kept the phone out of the trash and made enough money for a fast food burger for my trouble. But wait. I forgot about the Final Value Fee. This is a charge that eBay hits you with after the sale. I was not able to find it on the mobile application. I had to dig around the web site to find it. This fee is charged automatically to your funding source for the sale. The charge is calculated based on the total sale price including shipping costs. That’s right. eBay makes more money if your shipping cost more. Because these fees are billed after the fact, it makes it hard to see them. As I write this in April, my March charges are still not yet billed. I can see what looks like 35¢ insertion fee for the listing and $1 final value fee or 10% of the sale price. Now I’m down to $6 after all the fees and the envelope cost.
So in the end, I got $6 for my trouble. Was it worth it? My goal was to not loose money and delay the e-waste. I guess it’s mission accomplished by those standards. I am just frustrated by the bizarre disconnect between the shipping cost and estimate. I don’t know why the handling fee did not work. Had I sold the phone domestically there’s a chance I would have lost money in the bargain so… thanks Canada.
The moral of this tale is to be sure to calculate all the costs when setting your price and to double check your shipping offerings.