Background:
When selling on consignment, your agreement with your consignor is most often based on the sale price. Sometimes the shipping costs are expected to come from your commission, however, eBay encourages free shipping, so you may have to add the shipping cost onto the sale price. This would result in your consignor paying a commission on the shipping which is not the desired result.
For example, if you sell an item for $100 with $10 shipping, and you charged a 20% commission up to $500, your commission would be $20. If the shipping were added to the sale price and the item sold for $110 with $0 shipping, your commission would be $22, an overcharge of $2.00.
Solution:
To solve the problem, you would create a new tranched commission scale that puts the shipping cost at 0% commission, like this:
0 - $10 (the cost of the shipping) collect 0%
$10.01 - $500 collect 20%
When the item sells for $110, this will then cause the first $10 to not have a commission and the next 100% to have a commission of $20, which works out to be the correct commission of $20.
