Why is Ebay charging fees on Sales Tax and Shipping? Forcing Managed Payments on Everyone?

[dogchow747]

Why is Ebay charging fees on Sales Tax and Shipping?

Sales Tax - My guess is because they manage the distribution process.

It costs them money to collect and distribute the funds.

Shipping- They manage the shipping system and provide discounts on shipping to sellers.

Not perfect. I get that. But that is why.

[kensgiftshop]

@theoldtacklebox 

All payment processors base their fee's on the total amount the buyer paid.

Managed Payments is the only option now.

[north40sales]

Money....as usual it boils down to a financial decision for a company. 

Sales Taxes:  The SD v Wayfair decision now requires sales facilitators to collect and remit sales taxes to many states.  eBay definitely wanted to do that with the buyer's money, not their own, so by moving everyone over to Managed payments, it allows eBay to tap into the buyer's funds for this sales tax that eBay has to remit.  Not sure what eBay does with it from the time that its collected to the time that it is remitted...they are pretty tight with that kind of information, so you will have to speculate on your own there. 

Fees:  eBay charges a fee based on the total amount of money being processed which is the sum of item final value, shipping charge and sales tax plus the $.30 transaction fee.   You need to assume that your fee load will land @ 11.5% to 15% on average when you price your item. 

Managed payments:  eBay wants every transaction on their platform to run through their Managed Payment system so they can benefit from the multiple revenue streams that come with complete control over the payment process.   Business 101 stuff.  

[lacemaker3]

@north40sales 

Of course, the buyers are paying the sales tax. That is and has always been the case. Nothing whatsoever to do with SD v. Wayfair. eBay remits the sales tax to the buyer's state, according to the rules setup by the states. Most states allow the entity collecting the tax to retain a certain small percentage, according to the rules laid out by that state. There's nothing surprising or unexpected or nefarious about that.

[north40sales]

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@lacemaker3 wrote:

@north40sales 

Of course, the buyers are paying the sales tax. That is and has always been the case. Nothing whatsoever to do with SD v. Wayfair. eBay remits the sales tax to the buyer's state, according to the rules setup by the states. Most states allow the entity collecting the tax to retain a certain small percentage, according to the rules laid out by that state. There's nothing surprising or unexpected or nefarious about that.

It is a revenue chain for eBay.  Plain and simple.

[reallynicestamps]

We had Merchant Credit Card accounts from about 1979 until we closed our B&M in 2014. And we paid a fee on every cc payment from our customers including sales taxes and shipping costs.

It is Standard Practice for payment processors like credit card companies, Paypal, and Managed Payments to charge their fees on the entire amount of the payment.

If you look back at your PP invoices you will see this, although eBay/MP is more transparent about it.

Managed Payments are a return to the status quo ante  2015, when eBay was forced to spin off Paypal.

Rather than paying PP for payment processing, eBay decided they wanted to keep those fees , and went back to in-house payment processing.

You gave similar information to PP back in the day when you set up your account.  You just forgot over the past 6 or more years since then.

MP is more demanding about what identification and banking arrangements they will accept. We can only hope that this tighter security will make it more difficult for scammers to set up new accounts or to hijack abandoned accounts.

It should also be noted that eBay is running the changeover with all the grace, smoothness, and common sense they have shown in almost every other Big Change they have ever run since somewhere around 1999. /sarcasm.

[tft-lcd]

What a lot of sellers don't know-ebay gets a cut of that sales tax $$.

In fact, any business that collects sales tax and remits to a State Tax Authority gets to keep a percentage.

Here in Michigan, it's 5%.  More than enough to offset payment acceptance fees, and processing.

So there is no reason, other that pure greed that they charge fees on Sales Tax.

As for charging it on shipping-again, pure greed. It used to be a way to discourage sellers from posting low prices with high shipping fees in order to not pay seller fees (ebay didn't always charge FVF on shipping) but now, just greed.

I quit selling here. I do not agree at all with the managed payments crap. They make you agree to give your personal and business information out to what evert company ebay feels like giving it to . You cannot opt out at all. 

Not to mention the ridiculous wait time. Some sellers have a daily sweep, and still wait 7-10 business days to see the funds in their account. I understand who paypal "fronted" the $$, but forcing people onto the platform, dragging out how long it takes to get paid, and not being able to control who gets access to your personal (private) and business information are more than enough reasons for me to jump ship.

Too bad too, I've been an active seller since 1999. Ebay does not care though.

[stainlessenginecovers]

Quite simply it's the easiest way to charge a fee. 

They could just charge 20% for the 'item' and 20% on the shipping label and FORCE sellers to use ebay shipping ONLY so they can levy that 20%. 

Doesn't really matter on the tax as that equates to about $1 per $100. 

Regarding why they are 'forcing' MP, they are NOT forcing. That is all they have. Use it or don't. 

[klhmdg]

@theoldtacklebox   because they can.

Simplest answer is just that.

Many have asked and answered this exact question over the years and it just boils down to "because they can"

[buyselljack2016]

my fees with eBay/MP are about the same as they would be with eBay/PP. few pennies different here and there depending upon the sales tax rate.

Shipping greed?

$10 for the item + $5 shipping

$5 for the item + $10 shipping

$15 for the item with "free" shipping.

Which seller should pay more in fees?

Buyer purchases by Sunday, the payout is in my checking account by Wednesday. YMMV

[lacemaker3]

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@north40sales wrote:

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@lacemaker3 wrote:

@north40sales 

Of course, the buyers are paying the sales tax. That is and has always been the case. Nothing whatsoever to do with SD v. Wayfair. eBay remits the sales tax to the buyer's state, according to the rules setup by the states. Most states allow the entity collecting the tax to retain a certain small percentage, according to the rules laid out by that state. There's nothing surprising or unexpected or nefarious about that.

It is a revenue chain for eBay.  Plain and simple.

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@north40sales 

Yeah, right.

Respectful. Right back atcha. 

[chapeau-noir]

Real easy to answer these questions with a tiny bit of research. 

[pburn]

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@north40sales wrote:

Sales Taxes:  The SD v Wayfair decision now requires sales facilitators to collect and remit sales taxes to many states.  eBay definitely wanted to do that with the buyer's money, not their own, so by moving everyone over to Managed payments, it allows eBay to tap into the buyer's funds for this sales tax that eBay has to remit.  Not sure what eBay does with it from the time that its collected to the time that it is remitted...they are pretty tight with that kind of information, so you will have to speculate on your own there.  

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It appears the cart's been put before the horse. This comment implies Managed Payments was developed in response to South Dakota v. Wayfair, Inc., et al . That is not the case.

eBay announced its Managed Payments program in January of 2018. South Dakota v. Wayfair, Inc., et al was decided on June 21, 2018. 

Please don't start in on that eBay-earning-interest tangent again. For awhile there, it appeared that one had been put to rest for good. 

[jth86]

I TOTALLY AGREE WITH THE STATEMENT TOTAL GREED WITH THE MANAGED PAYMENTS. GET THIS I GOT CHARGED FOR A SHIPPING LABEL THAT PRINTED SO SMALL THAT IT COULD NOT BE SCANED/ WORTHLESS TO ME BUT NOT TO EBAY 'S CLOSE TO BIGGEST RIP OFF IN THE WORLD . AND BECAUSE IT'S PROBABLY RUN BY ARTIFICIAL INTELEGENCE NO ONE KNOWS ANYTHING ABOUT HOW TO FIX IT !!!    N O  O N E !!!    20 YEARS WITH EBAY ALL SHOT TO HELL FOR THE MOTHER LOVERS GREED!!!