EBAY CHARGING FEE ON SALES TAX. So how do you calculate your cost?
eBay please answer. How is a seller suppose to calculate their cost when you charge a fee on sales tax? Sellers don't know what the sales tax is going to be until after the sale. How would your CEO run eBay if you couldn't calculate your costs?
32 comments
reallynicestamps
·3 years agoOther variables are
mam98031
·3 years agoFor those shipping using eIS there is no international selling fees. For those not using eIS there is a 1.65% FVF added to the regular FVF no matter how the buyer pays.
gloryglorygifts
·3 years agoMaybe your best way to gage it is to look at your % of selling fees on your sales & performance page. Of course, they are averaged over the month/year because your items are an assortment of prices, but still give you a good sense of what you paid. This year mine is a little higher at 28.9% then it was last year at 27.4%, so I've had to adjust my pricing to absorb the extra fees. Don't forget you have to figure in the cost of your item and your shipping supplies and any extras you may include too. At least that's how I determine my prices.
Good luck to you.
dbfolks166mt
·3 years agoMaybe your best way to gage it is to look at your % of selling fees on your sales & performance page. Of course, they are averaged over the month/year because your items are an assortment of prices, but still give you a good sense of what you paid. This year mine is a little higher at 28.9% then it was last year at 27.4%, so I've had to adjust my pricing to absorb the extra fees. Don't forget you have to figure in the cost of your item and your shipping supplies and any extras you may include too. At least that's how I determine my prices.
Don't forget all the other things. My selling cost for 2022 was around 74% with an ROI of about 41%.
gloryglorygifts
·3 years agoWell, that's a nice ROI for you! The OP is questioning how to price his items based on the sales taxes he pays. His easiest way to determine it is by looking at his performance page. It has the sales tax and other fees right there. I don't know what other extras he may have to include in his price calculation, but shipping supplies is certainly the first that comes to my mind.
dbfolks166mt
·3 years agoWell, that's a nice ROI for you! The OP is questioning how to price his items based on the sales taxes he pays. His easiest way to determine it is by looking at his performance page. It has the sales tax and other fees right there. I don't know what other extras he may have to include in his price calculation, but shipping supplies is certainly the first that comes to my mind.
You will also notice that my selling cost was around 74% in 2022 and the eBay costs were only a fraction of that. There is more, in fact a lot more, to figuring out what price to set for an item than just the fees on sales tax which is minor. Other major costs that factor into what price to set include.
Shipping cost
Operational cost - POV, packing materials, paper, ink, space...........
COGS - what seller paid for the item
State Income tax
Federal Income tax
SE tax
Just to name a few.
mam98031
·3 years agoWhat do you include in the percentage you are calculating? That is a curiosity question, nothing more.
gloryglorygifts
·3 years agoAre you talking about the fees I mentioned, 28.9% and 27.4%? That's the fees I paid to ebay, which included the, fees on shipping using their labels, fees for FV, taxes collected and store subscription fee too.
mam98031
·3 years agoYes. That is the one. I found it interesting as mine are running around 19.3%.
Maybe a large part of the difference is due to store levels. I use to have a Premium store, but I dropped it to a Basic when Ebay allowed the extra 10,000 listings in certain categories. And since the category that I mostly sell in is on that list, it only made sense to save the money on the store fee.
Sellers can use the additional allocation of fixed price listings in the following select categories:
johnrj1226
·3 years ago1. Do a best guess estimate. Recommended
2. Hope and pray the items get sold to one of the 5 states that has no sales tax.
dbfolks166mt
·3 years agoThe fees on sales tax are like several other unknown's that I simply estimate using a cost model prior to listing the item. While not exact the model provides me with an estimate of my profit and ROI before I list the item. I will not actually know my net revenue and ROI until I do my taxes at the end of the year. I use the following to establish a listing price. I change the red fields for each item until the blue fields are around the profit and ROI I am looking for. It's not exact but it has proven to be close over the years. I have another model that I use post sale to record actuals for tax purposes and compare with eBay information.
mam98031
·3 years agoWe have been dealing with this every since Managed Payments became the site wide money processor. As everyone entered MP on or after August 2020, the FVF was charged on the sales tax. Before that the sales tax was charged a fee by PayPal. So hoe did you handle it when PayPal was our money processor?
Of course we don't know who our buyer will be in advance, nor where they are located. Are they in a state that has a sales tax or one that doesn't. The average sales tax across the nation is likely around 8%. So on a $100 sale the sales tax would be $8.00 and your FVF would be about $1.05.
So I say keep it simple. Add another $1.10-$1.25 onto the price of your product for each $100 of the purchase price. Or proportionally less for lower dollar value products.
Oh, this is a member to member forum on the Ebay site. It is not an extension of the Ebay customer service. We are all just buyers and sellers here trying to help you.
projectmonzu
·3 years agoUnfortunately, this is just the reality of business and it's something you need to guess on.
I usually just estimate a sales tax on the higher side like 10%.
I mean, it's the same with shipping. You don't know where your customer will be so you don't know what your real shipping cost will be until the order actually comes in. (Personally, I assume a coast to coast shipping distance and incorporate that in how I price my items.)
As for fees on sales tax, yea, that's a bit of a bummer, but you can use one of those online calculators to estimate how much that will be. For example, I just use the following calculator and plug in my 10% sales tax into the sales tax field. Try it out.
https://investomatica.com/ebay-calculator
stainlessenginecovers
·3 years agoSame way a store is supposed to 'figure out' their cost and/or profits.
Average.
After all, a customer can pay cash or check and the Store gets $10 profit after all said/done...
but if that same customer uses a Credit or Debit Card, that Store gets $9.70 (3% processing fee example).
luckythewinner
·3 years agoCEOs around the world deal with unknowns all the time.
Just like every other business, every eBay seller has some costs that he cannot possibly know beforehand.
Sales tax amount, shipping amount, international fees, and promoted listing fees are all things a seller cannot always know. The same goes for the number of returns or lost packages.
monroe67
·3 years ago"Sales tax amount, shipping amount, international fees, and promoted listing fees are all things a seller cannot always know."
Bingo !!
There are just too many variables that prohibit almost any eBay seller from knowing, say, "I always net 85% of my listing prices."
My selling ID usually estimates her net earnings will be around 70% of the items' listing prices.
But she finally sold two small things (to the same buyer) this weekend and her rough estimate is that she will net only around 50%. And these are things that are subject to the 13.25% FVF, plus 30 cents per order. I want to list a few pieces of fashion jewelry that I don't wear anymore, and I know the FVF in that category is 15%.
mtgraves7984
·3 years ago@maui-surfer
To qualify, I'm not eBay. But I ballpark the overall at 15% (going to fees) so that I'm not disappointed. 🙂
iamalwaysright
·3 years agoYou mean calculate your sale price to absorb that FVF on sales tax?
Sales tax estimate x = 11%. Use whatever number you want. FVF = 12%
FVFx = approx 1.3% of your initial price. Feel free to round up to 1.5% to cover any fluff or be more aggressive and round down to 1%. Ta-da.
coolections
·3 years agoMy fees average around 21% so that is how I calculate anything that sells here. I wouldn't worry about breaking it down to the exact penny. Sales tax is only example $2.00 so fees of 25 cents should not make a difference.
lamber9347
·3 years agoThis is a forum comprised of other buyers and sellers such as yourself. There are no eBay employees viewing posts or responding to any. Best of luck to you....
alcoforever
·3 years agoJust use 10.75% for your tax rate. That is correct for Oakland CA.
mam98031
·3 years agoAverage Sales Tax by state.
State
State Tax Rate
Average Local Tax
Combined Rate
California
7.25%
1.31%
8.56%
Indiana
7%
0%
7%
Mississippi
7%
0.07%
7.07%
Rhode Island
7%
0%
7%
Tennessee
7%
2.47%
9.47%
Minnesota
6.88%
0.55%
7.43%
Nevada
6.85%
1.29%
8.14%
New Jersey
6.63%
-0.03%
6.6%
Arkansas
6.5%
2.93%
9.43%
Kansas
6.5%
2.17%
8.67%
Washington
6.5%
2.67%
9.17%
Connecticut
6.35%
0%
6.35%
Illinois
6.25%
2.49%
8.74%
Massachusetts
6.25%
0%
6.25%
Texas
6.25%
1.94%
8.19%
District of Columbia
6%
0%
6%
Florida
6%
1.05%
7.05%
Idaho
6%
0.03%
6.03%
Iowa
6%
0.82%
6.82%
Kentucky
6%
0%
6%
Maryland
6%
0%
6%
Michigan
6%
0%
6%
Pennsylvania
6%
0.34%
6.34%
South Carolina
6%
1.43%
7.43%
Vermont
6%
0.18%
6.18%
West Virginia
6%
0.39%
6.39%
Utah
5.95%
0.99%
6.94%
Ohio
5.75%
1.42%
7.17%
Arizona
5.6%
2.77%
8.37%
Maine
5.5%
0%
5.5%
Nebraska
5.5%
1.35%
6.85%
Virginia
5.3%
0.35%
5.65%
New Mexico
5.13%
2.69%
7.82%
North Dakota
5%
1.85%
6.85%
Wisconsin
5%
0.44%
5.44%
North Carolina
4.75%
2.22%
6.97%
Oklahoma
4.5%
4.42%
8.92%
South Dakota
4.5%
1.9%
6.4%
Louisiana
4.45%
5%
9.45%
Missouri
4.23%
3.9%
8.13%
Alabama
4%
5.14%
9.14%
Georgia
4%
3.29%
7.29%
Hawaii
4%
0.41%
4.41%
New York
4%
4.49%
8.49%
Wyoming
4%
1.36%
5.36%
Colorado
2.9%
4.73%
7.63%
Alaska
0%
1.43%
1.43%
Delaware
0%
0%
0%
Montana
0%
0%
0%
New Hampshire
0%
0%
0%
Oregon
0%
0%
0%
an-57470
·3 years agohttps://www.ebayfeescalculator.com/usa-ebay-calculator/
heckofagame
·3 years agoI use 10% for my calculations.
djvp53
·3 years agoI use 8%. It's usually pretty close. When it's more than 8%. I make slightly less money than I expect but the difference is pennies and my margins aren't so tight that I can't occasionally swallow the difference.
mam98031
·3 years ago@heckofagame
Ouch, that is high. So for a $100 item you would add about $10 for your FVFs on the sales tax??
If the sales tax is 10%, which would be on the high side, that means that the sale tax on $100 is $10 times your FVF the cost to you would be about $1.32. So you raise your pricing by $10 to cover the $1.32 in fees.?????
Well at least you know you are well covered.
heckofagame
·3 years agoMost of my new items come from a distributor and with that often comes preset retail prices, MAP (minimum advertised price) pricing and such, depending on the manufacturer. I usually end up using the calculations to check whether or not I'm hitting my minimum gross profit margin on each item.
mam98031
·3 years agoNot sure what MAP has to do with it unless you signed an agreement with your supplier not to exceed the MAP.
Most items I sell have a MAP preprinted on the books I sell. It is a guide but not an absolute as many of my books are in limited supply or out of print [OOP]. The market drives my pricing.
heckofagame
·3 years agoSome manufacturers are very strict on their MAP policies. They have lists of how much you can go over or under a price, if you are allowed to vary from the retail price, and where you can sell the products. If you are spotted not following the rules, they will ask the distributor to no longer sell those products to you. Of course, this only applies if you are a retailer obtaining items at wholesale from a distributor.
mam98031
·3 years agoI take no issue with that, however those that are strict about that typically will not sell anything to you wholesale without an agreement in place that you will only price your item within the MAP. I did say this in my other post.
dbfolks166mt
·3 years agoSome manufacturers are very strict on their MAP policies. They have lists of how much you can go over or under a price, if you are allowed to vary from the retail price, and where you can sell the products. If you are spotted not following the rules, they will ask the distributor to no longer sell those products to you. Of course, this only applies if you are a retailer obtaining items at wholesale from a distributor.
I just noticde my first post cut off the top of the spreadsheet. Use a model similar to the following and plug the MAP price into the first row then your estimates for the other three RED rows and see if you can even make a positive return or a decent ROI on the items you are selling.
inhawaii
·3 years agoSorry, ebay is not here.
Just us buyers and sellers.
You could calculate your cost based on the highest sales tax.
If the actual sales tax was lower than what you calculated for, that will leave you with extra profits.