Probably the most confusing part of using a proxy service is determining the fees and the total cost you'll have to pay to receive an item. It's not an exact science for a lot of different reasons. Different companies use different methods to determine final cost, and as a Buyer you won't know the international shipping charges until the item actually arrives at the proxy company warehouse. That can cause a bit of sticker shock for some people when the total cost ends up being two or three times the actual item cost, or more.
Types of Fees
Doing a transaction on Yahoo involves a lot of fees. There's the cost of the item, shipping, bank fees, etc. Proxies work on what is essentially a cost + fee basis, so the Buyer is ultimately responsible for paying all of the fees associated with the transaction. To make matters worse, each company has their own method for calculating fees so getting an apples to apples comparison of costs between companies is difficult at best.
Typical fees for a transaction can include all or part of the following:
Item Price
This is the cost of the auction. Final prices are in Japanese yen, so you'll need to know what conversion rate your proxy uses to find the cost in your own currency. You should know that real conversion rates are often not as good as rates you see on internet websites. Published rates from sites like XE.com are for lending between banks, not individual transactions.
Domestic Shipping
This is the cost of shipping the item from the Seller to the proxy warehouse. Sometimes the shipping price is listed in the auction, sometimes it isn't. Most of the time you won't understand the Japanese to know which shipping price applies to you even if it is listed. Japan determines postal cost by size, not weight, so you might be surprised by the expensive cost of a big/light item vs. a small/heavy item.
Bank Transfer Fee
Payments are done by bank transfer, and there's usually a $0.50 to $5 fee associated with each transfer. It depends on the type of account the Seller uses.
Other Cost
Not many Sellers add in extra costs, but some do. Some are a business and they require that you pay a 5% sales tax when you buy from them. It's rare, but if this is part of the auction then the proxy will pass this cost along to you.
International Shipping
This is the "wild card" of the proxy world. The proxy can't give you an international shipping cost until after it arrives at their warehouse, and it can only arrive at their warehouse after you've bought it. If you're not familiar with international shipping costs from Japan then you might be surprised when the bill comes.
Handling
Some proxies charge a handling fee for international shipping, some don't. One company actually charges cost + 25%, so if you're buying larger items that are expensive to ship be prepared to pay the handling premium.
Commission
This is the fee the proxy receives for the service. It's what's added on once all of the costs have been determined. Most companies charge different fees based on the final selling price. For example, items prices 10,000 yen to 15,000 yen might have a $30 commission and items priced 15,001 yen to 20,000 yen might have a $40 commission. Others charge a flat percentage. Each company is different.
PayPal
Most payments to the proxy are done via PayPal, and most of the proxy companies pass thie fee on to you since Japanese PayPal accounts have a 4% fee (3.9% + $0.30). If you're buying an expensive item then the commission the proxy receives might get eaten up by the PayPal fee itself.
OK, so what's my final cost?
Well, it's going to be based on some kind of cumuative total of the fees mentioned above. Not all companies break out the costs this way, but in general your final price will be:
Item Price + Domestic Shipping + Bank Fee + Other Cost + International Shipping/Handling + Commission + PayPal
After you've bought a few items you'll be able to make some fairly accurate estimations, but in the beginning the final cost might not be in line with your expectations.
Like I said each proxy has their own system for determining cost. Some have what's called a "base fee" to consolidate some of the smaller costs into one cost center. A base fee, for example, might be $10 per transaction. They'll say that the covers domestic shipping and bank transfer fees. Their calculation might look something like "Item Price + Base Fee + Commission + International Shipping." Sometimes it's a good deal, sometimes it isn't. If actual costs are greater than $10 then you've saved a few bucks. If shipping and bank fees are only $4 total then you've paid an extra $6 for nothing. That brings up the added confusion of certain items being cheaper or more expensive depending on which proxy you use. Maybe you'll use Proxy A for larger items and Proxy B for smaller items in order to get the best cost overall.
For my system, I charge the item price plus shipping plus bank fee. That's the first wave of charges that's due after the auction ends. After I receive the item I create an invoice for the international shipping plus the 4% PayPal fee for all charges. Once that second payment is made I ship out the item.
That's great, but which company is the cheapest?
There's really no perfect answer to that question. You'll have to figure out what you want to buy and estimate what the final auction price will be. From there you'll have to go to each company and compare the costs you'll be expected to pay. Maybe Company A has the lowest commission but they add in the highest handling charge for shipping. Maybe your item is small and cheap so Company B is best since they charge actual amounts and not an inflated base fee. Maybe company C has the highest commissions but maybe they offer discounts for multiple items from the same Seller which brings the total commission down per item. If you're in Europe and have high import taxes, you'll have to see which comapny will reduce the value of your package to save you taxes. In the end that might be the biggest impact on your total cost. You'll just have to do research for each company.
Discounts
Most proxies will offer discounts if certain conditions are met. If you buy multiple items from the same Seller at the same time maybe they will assign a lower commission rate per item and they'll just charge you one base fee. If the Seller combines shipping then most will pass along that savings to you, but if shipping is included in the base fee and if the proxy charges a base fee for every item purchased then perhaps there won't be a discount. Again, you have to do your homework.
The automated proxy services usually have a system where they try to save customers money by preventing them from bidding up the price of the same item. My service works that way. Imagine an auction with an opening price of $20 and no bids. Customer A comes along and places a bid for $100. Now he's the high bidder at $20 with a max of $100. Customer B comes along and wants to place his own bid. He sees the current price of $20 so he bids $80. My system won't allow customer B's bid to go through because it's not higher than Customer A's bid. That's to prevent Customer B from needlessly raising the price of the item on Customer A if there's no chance of him being the high bidder. Customer B's bid will only go through if he places a bid higher than Customer A's bid, in this case $100+. Most companies who have this service, including mine, charge a commission based on Customer B's bid. Customer A still comes out far ahead and we're just splitting the savings.
