When purchasing items on eBay, the cost is usually calculated as Price + Shipping + Tax. At best, delivery and tax are zero – then there are no nuances with pricing. Let’s consider the impact of non-zero delivery and pricing taxes in the system.
Cost of delivery
From the pricing point of view in the system (when calculating the base price), the cost of delivery on eBay is of several types:
- Free Shipping is the easiest option – in this case, shipping to anywhere in the US is free and you do not need to pay extra.
- The fixed cost of shipping (usually Standard Shipping or Economy Shipping) is constant for shipping to anywhere in the United States. In this case, when calculating the base price in the system, such shipping cost is added to the cost of the item.
- Floating shipping cost (usually Expedited Shipping) – the cost depends on the shipping destination. This is the most difficult option, since here it is impossible to accurately calculate the base cost. The fact is that neither you nor we know where your customer will come from and thus where to ship the item. In this case, the system use the cost of shipping to the central regions of the United States for price calculations.
Thus, in any case, the system tries to calculate the base cost as close as possible to the final one, even if it is not always 100% accurate – as is the case with the floating shipping cost.
With taxes, the situation is similar – when buying from some sellers, a tax is also added to the cost. Moreover, the tax rate depends on the state of dispatch and the state of delivery (in some cases even the city!) The system cannot foresee and calculate this, so taxes are not taken into account in calculating the base value. However, the final purchase amount (including taxes) is taken into account when calculating the profit, so you will not overpay when you pay for using the system.
If you want to continue to work with such a seller, we advise you to raise by 5% the Minimum Profit in the inventory link settings to compensate for a possible tax.