Managed Payments is more expensive than Paypal for Fashion Powerseller

[aruraclothing]

I am a one man operation fashion powerseller having sold over 65,000 items the past 6 years. I have seen nearly an increase of 25-50% in eBay listing fees over that period of time. Here are some of the things I have noticed eBay doing to there Top Rated Sellers.....

Eliminating 20% final value fee discounts (First it was reduced to 10% then only given to sellers who offered free returns, personally free returns does not increase traffic for me, my buyers prefer a lower price over free returns). I was paying eBay 7.2% in final value fees when I started my business. Now it's over 10%. If you use promoted listings which I will talk more about below it is significantly higher. 

Increasing metrics and eliminating benefits / discounts if strict metrics are not met. I have always been in the top tier of the metric structure but there have been cases where during my peak season I may be near a category cutoff. Not a big deal, but when 95% of those cases are incorrectly filed by a customer (for example calling an item "not authentic" when I purchased it directly from the retailer myself is ludacris). 

The eBay / Paypal relationship went out in blowout fashion with Paypal keeping all cancelled / returned item processing fees costing me thousands in a short period of time. Thanks for that! 

Stating "most sellers" will see a savings with managed payments is false advertising in my opinion, I do not know anyone who is seeing a savings, the final value fee now includes the total purchase price which is cost of the item, shipping paid and taxes. Due to the final value fees on the tax your total percentage can vary greatly depending on the state you sold that item too. Several southern states have very high sales taxes over 9%. Paying a final value fee on sales taxes means that I will easily pay an additional $5,000-$10,000 a year in final value fees a 5-10% increase.  They also top that off with a .30 per transaction fee easily topping Paypal fees by 1-2% on average. 

Managed payment sellers now pay a flat rate international final value fee of 1.65% on top of the .30 transaction fee and the normal final value fee for your category which for fashion with my eBay store is 9%.

The implementation of the promoting listing tool is not good for eBay sellers. I have used the promoted listing tool but have since stopped my participation with that. Yes, you do get more sales but why make less money just to sell something faster? I'd rather get top dollar for my merchandise as its getting harder and harder to source that merchandise these days. Or spend my time filling the gaps in eBay and find merchandise no sellers or few sellers have and became ranked in those categories of items. I have found myself working harder and harder for less margin. In my opinion, eBay should focus on promoting listings of its top rated sellers for free as a benefit for top performers.  

I very much dislike the way final value fees are stated on the customer order details. These fees need to be itemized. Instead of one grouped "final value fee". 

For example current fees looks like this: 

Final Value Fee

Applies to Total Amount of the Sale Final amount: $85.54.

Final Value Fee

Per order fixed fee

-$9.84

-$0.30

Subtotal: -$10.14

Total fees: -$10.14

When they should look like this with each fee itemized..... This would be for my fashion category and eBay store level.....

Final value fee for category (dollar amount and 9% fashion final value fee) 

Final value fee transaction charge and processing fee 2.7%, dollar amount and flat service charge of .30

Final value fee on international sale if applicable (dollar amount and 1.65%) 

Final value fee on taxes (dollar amount and percentage for that customers state) 

Promoted listing fee if applicable (dollar amount and percentage promoted fee paid)

With the current system I don't think there is even a breakdown of promoted listing fees from final value fees so you have a hard time knowing which orders sold via promoting listings and how much you paid for promoting listings for that order. 

I don't know about you but I am still getting used to having my money tied up in ACH processing for several business days. I ran my business on tight cash flow with Paypal, so not having funds now means I currently carry a balance on some of my credit lines thus costing me more money in interest payments. Whereas before I never carried a balance or had to pay interest. I am still trying to adjust my business to the new payout schedule and it has been quite a headache.

Anyways just some thoughts feel free to provide input or suggestions......

[crymfiter]

If the buyer is paying shipping, then Ebay is taking  good chunk of those monies which has to be made up by the seller when shipping. I'm sorry, but who is getting screwed?

[us4strays]

AMEN!!

[us4strays]

There is no way in heck that MP is helping sellers. Every time Ebay has made any change to policy it has always been and will always be in the very best interest of their bottom line. 

[coolbrewandbbq]

Thanks for all the time spent on this posting, which is very helpful!

After so many years of new programs costing us more and more of our profits, it is difficult to trust anything launched. Having sellers pay a fee on shipping and taxes may be/should be illegal.

[releasethekraken_1]

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@coolbrewandbbq wrote:

Thanks for all the time spent on this posting, which is very helpful!

After so many years of new programs costing us more and more of our profits, it is difficult to trust anything launched. Having sellers pay a fee on shipping and taxes may be/should be illegal.

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You've been paying FVF on shipping for 10 years. If you think it's illegal, maybe you should have done something about it.

[airdzi]

EBay is worthless these days, waste of time, selection is down big and true good steal deals are almost entirely eliminated. 

[shado-x]

Example of one case was a buyer wanted me to ship to an address not listed ,I said I wouldn't do that, to protect us both, so it was shipped and he files,the item was damaged, customer service ruled in my favor because he didn't furnish any info. But, I was still charged in my service metrics, this is illegal, not to have an appeal process.

That's because you shipped the item.  You should have canceled the order, told the buyer to get lost, and then blocked the buyer.  Lesson learned when buyers purchase with one address, and then [8 hours later] change the address with ambiguous reasoning because they had every intention to do what they did to you.  Not eBay's fault since you had to request their assistance like an insurance.  Just move on, sell more knowing this lesson.

[itolduandso]

"No country for old men." Sellers who are new to ebay and selling will not even notice anything about ebay being expensive.  It's all relative, because you have been around for too long. Just because old wo\men remember the old days, doesn't mean ebay will bend over. They rather spend the money on dividends plus on marketing to get more buyers on the site. Bigger sellers make more sales at lower margins. Pandemics brought an avalanche of new sellers on the platform. If you leave, somebody else will take the scraps. Almost everybody I know is trying to make money selling whatever has potential to make a few dollars. International sellers will pay even more. Right now it is 2.99 vs 3.99, that's 1% and new is international fee 1.65%. There is still plenty of room to sell to but you can't rely on old habits. And pure importing and drop-shopping, you can forget it. You need to create your product and expect to fail. That's the new game.

[itolduandso]

By the way, if your margins are razor thin, why not selling something at higher margins? Yes you need to find niche and find a product. I listed my wares over the last few years on a few platforms and while ebay got more expensive over time, it's just leading the pack but not overly more expensive. Average platform fees are 12% internationally. Vestiaire, Kidizen, Tradesy, Poshmark, all charge more than eBay. Some European platforms charge up to 20% transaction fees.

[brunosfinejewelry]

You are spot on! You are a wise seller. Only you know your own goods & what will sell for you. You explained so much of the true story with Managed Payments. Thank you for that. My only question is - what is our alternative!???

[brunosfinejewelry]

People don't realize that large companies like Amazon & Ebay get a cut out of the shipping $$$$. Suprise!

[brunosfinejewelry]

Yes, it is in the best interest of EBay's bottom line, just like our bottom line. So my question is - What is the alternative?

[brunosfinejewelry]

If you can't sell the product - sell the worth of the convenience of shopping on line, time you save, money you save having the item. If you can't sell forward, sell backward!

[chestnut271]

Exactly right, except your example used a relatively modest sales tax percentage. In NY, the rate is 8.875%. 

Your $1,000 example looks like this if item sold to buyer in NY:

Sale Price - $1,000

Shipping -    $15.00

Tax -               $90.08

Total -          $1,105.08

Fees with PayPal system:

$1,105.08 x 2.9% = $32.05 (PayPal Fee - They collect on everything, including sales tax)

$1015.00 x 10.2% = $103.53 (eBay Fee)

Total Fee is $135.58 from $1,000 sale

Fees with managed payment:

$1,105.08 x 12.55% = $138.69

Sellers with higher proportion of sales to states with high sales tax will pay more under managed payments. Small sellers will realize a few cents in savings per transaction at best, and only if they are selling lower priced merchandise. As your example illustrates, the higher the sales price, the higher managed payment fees - even in a modest sales tax state.

[2....1....0....sold!]

@aruraclothing 

We had a solid business like yours years ago...ebay became too much of adversary...lol.

My wife got a part-time job at a large consignment store (very easy to get) where she can sell all she wants and keeps 70% of the sale price. No shipping, no returns, no "disputes", no "charge backs", no "negative feedback", no hassles!

Even with paying 30% to the store, in the long run, we make more money than through ebay with FAR LESS HASSLE!