I answered this question awhile back…

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Here’s what it [URL removed]

OK, I’ll attempt an answer for all of you.

(1) PayPal charges fees on the total transaction because they are in the business of processing money. To any payment processor, it doesn’t matter to them what the split is between selling amount and shipping amount. They are processing a total amount and fees are charged on that amount. That does seem fair.

(2) I believe that eBay started the practice of charging FVF on the entire transaction amount. The opinion on why/how it got started is shared by many people who have questioned this practice. Before eBay started the practice of charging FVF for shipping, they were seeing a lot of expensive items being sold at ridiculously low prices ($0.01 to $1.00), while the seller was simultaneously charging exorbitant amounts for shipping. This meant two things were happening. First, buyers were upset when they didn’t read the fine print and found out that they owed a lot more for the “inexpensive” item they won at auction. The other side of this is that eBay found that many sellers were exploiting this procedure to avoid paying FVF on their sold items. Also, as eBay noted at the time, the buyer experience was suffering due to the actions of some sellers.

In other words, instead of selling an item for $20 and shipping it for $5 (which would have resulted in about $2 to $3 in FVF), sellers where charging $1 for the item and charging $24 to ship the item. The seller would then pay FVF on only the $1. So, to avoid losing revenue and ticking off buyers, eBay started charging FVF on the entire transaction.

Amazon does it a little differently… they limit how much you can charge for shipping certain item categories. If you want to sell on Amazon, you must adhere to their shipping charges.

Then Bonanza came along and offered a much fairer deal. They waive FVF on the first $10 in shipping. Most sellers can probably ship within that $10 shipping target and not pay any FVF on the shipping portion of the transaction.

This is my personal opinion on why FVF are charged on shipping costs. So, try not to rain hate down on me… not saying that I agree with it, but it may be the only way to keep the majority of the people happy and having sellers pay their fair share of FVF without having to require “proof” that seller’s shipping costs exceed the $10 FVF-free amount.

Tomwayne basically hit the nail on the head. People were abusing the shipping on the auction site but it really is NOT fair to the people who DONT abuse the shipping costs.

While I have many more items that I can sell, I choose not to if the shipping costs exceed the cost of the item. It us a deal killer and People just wont pay it and the PO (and other carriers) now base shipping costs on the actual SIZE of the package besides weight and distance.

Buyers just dont understand that and with all the stores offering FREE shipping, they dont realize that the ship cost is buried somewhere in the price of the item. Shipping is NOT actually free (unless you are stealing postage). How Bonanza handles shipping is fair but some of my items will exceed the $10 ceiling they have here. I dont offer combined shipping because my items vary in size and shape and weight and I cannot possibly calculate the endless combinations of my varied items shipped together. I would be fair to the buyer by refunding to their paypal account any overage they paid in combined items if I am safely able to ship them together without possibility of damage. It is never my intent on making the PO rich on the buyers dime.

I sell many different items on many different sites. On paypal, I can ship an item up to 16 oz for approx $3.60 or so. 8 oz and under it is $2.60 for shipping (you may have to have a business account to get these rates, not sure) If i have anything over the 16 oz. i ship flat rate. Its still pricey, I have found if someone wants an item badly enough, they will pay the shipping cost.

I know what some dishonest sellers on ebay were doing , personally I did not by scambays excuse to force every one to pay a FVF .I don’t mind showing proof of shipping costs ( as the site owners can see it anyway ), I sold for one month on Amazon then quit due to the maximum shipping policy . Scambay also imposed their so called import fee . ripping off buyers , and seller . Most sellers were not aware that the GSP was a way for scambay to impose a buyer fee while hiking sellers fees without the buyer or seller knowing . I knew of this because there are no tax , duty or import fees on medical items yet I seen huge import charges incurred on MNS products . Which is why I refused to use the GSP . I owned an MPORG and know site owners and admins can see if someone is trying screw the site and its customers . In the end its about the customer , I will do whatever is possible to insure my customers have the best products at the best price and ensure a pleasant fair and honest transaction .

Bonanza is not like others , I can live the cost of operation here , at least they haven’t become greedy like ebay ( which explains why people are leaving ebay , and like idiots they keep hiking their fees lol ).

Paypal deducts the shipping portion of all transactions because I use their auto print shipping label , and what the costumer pays for shipping is what is transferred to Canada posts account .

I will give this site a fair run , seems the respondents are honest enough and are respectful , that is sign of happy sellers , happy sellers means a good site .