Creation of a Separate Handling Fee by State

[lesey06]

Sellers  have different ebay final value fees based on the buyer location because state taxes are included in the calculation.  In order to remedy this extra cost, Ebay should allow the seller to be able to charge different handling fees by state.  Additional I know my shipping costs are different as well by location.  I am on the west coast and it costs more to ship to the east coast using ground advantage for example, so I could build that into the handling costs as well.  Thoughts?

[lesey06]

Sorry to me it does not make more sense to just add 8% or provides fairness to the buyer.  Why should a buyer in Nevada have to pay an extra $2-$3 to subsidize the extra costs due to sales tax and extra shipping costs to a New York purchaser? 

[lesey06]

Thank you for everyone's thoughts,  it seems like there is not enough drive from others for this initiative.  Even though I do not agree with most of your thoughts, I do sincerely appreciate them.

[dnasilver]

Why not a fixed handling fee by eBay of "X" amount instead of dealing with a zillion different sales tax percentages across the US? If eBay collects one cent or a million dollars on an order it still is just a service being provided by eBay.

[mam98031]

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@lesey06 wrote:

Why should a buyer in Nevada have to pay an extra $2-$3 to subsidize the extra costs due to sales tax and extra shipping costs to a New York purchaser?   

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You need to look at my post again.  The sales tax in Nevada, California and NY, states you keep using as examples all have similar sales tax rates.  So I don't know what your complain really is.  

You have the ability to put a handling charge on the shipping you charge to buyers if you use Calculated Shipping.

And if you want sellers to have the ability to have a handling charge per state, what are you going to use as the rate for each state.  The average rate of the state????  How would you determine that?  Different counties and cities have different rates within the state.  Are you going to go by population in each area and try to calculate what the average for that state will be taking all these numbers into consideration?  How would you accomplish this.

Are you going to have every state report to you when a sales tax rate changes within their state?  This could become a major job function for you as a seller to keep this info accurately.

You want this to be a simply issue and it simply is not. 

[nobody*s_perfect]

For an average sales tax rate of 8% you're adding 13.25% of 8%, which would be $1.06 on a $100 sale.  And BTW the sales tax rate is 8% in some parts of Nevada. Variation in shipping costs is usually addressed by using calculated shipping.

[lesey06]

Hi, I was using Nevada because I get a lot of business from Nevada and the shipping cost is so much lower than shipping to the east coast therefore my ebay fees are less.  But I could just as easy use Montana  from sales tax reasons versus California, however it would be the same concept expect more skewed towards sales tax difference than shipping.  Each seller could use there own discretion as to the handling fee charged by state by whatever factor they want.  I would use my sales data/ebay fees to determine mine.  You could just click the same to charge all customers the same,  however all things being equal I think I would have a competitive advantage to my Nevada customers as my item is more fairly priced for them.

[ajs_coins_and_alchemy]

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@lesey06 wrote:

Why should a buyer in Nevada have to pay an extra $2-$3 to subsidize the extra costs due to sales tax and extra shipping costs to a New York purchaser?   

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If you charge a buyer calculated retail price shipping, and you pay commercial shipping rates, there is a decent percentage difference between the shipping rates you pay and buyer pays. THAT covers FVF for shipping. Why would you need to surcharge a NY buyer vs NV buyer? The shipping itself is higher and has a baked in percentage buffer for you.....

[ajs_coins_and_alchemy]

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@ajs_coins_and_alchemy wrote:

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@lesey06 wrote:

Why should a buyer in Nevada have to pay an extra $2-$3 to subsidize the extra costs due to sales tax and extra shipping costs to a New York purchaser?   

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If you charge a buyer calculated retail price shipping, and you pay commercial shipping rates, there is a decent percentage difference between the shipping rates you pay and buyer pays. THAT covers FVF for shipping. Why would you need to surcharge a NY buyer vs NV buyer? The shipping itself is higher and has a baked in percentage buffer for you.....

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Ohhh @lesey06  You are charging buyers flat rate shipping!?!? That's your problem!! You want to be fair to a NV buyer vs a NY buyer?? Then don't charge them the exact same shipping rates .... NY costs more, use calculated shipping and they'll pay more. NV costs less, use calculated shipping and they'll pay less. Problem solved for shipping. You're left with sales tax and the differences between sales tax across the country is fairly negligible, use the working average as has been suggested and you'll do just fine.

Your own business practice choice of charging flat rate shipping instead of calculated is what's hurting you most...

[fern*wood]

Are you charging your buyers retail rates?  If so, and you also want to add a handling fee, that might hurt you more than help.  As others have mentioned, I let the retail rates take care of most of my fees.  I highly doubt many sellers would want to mess with your proposal.  It would probably make the board explode with complaints.

[dbfolks166mt]

@lesey06 wrote: ... Ebay should allow the seller to be able to charge different handling fees by state.  ...

Sales tax rates vary not only by state, but by location within the state because so many states allow localities to add their own increment on top of the state sales tax. For instance, in Arizona, the base statewide sales tax rate is 5.6%, but localities can add up to another 5.6%, bringing the total rate up to 11.2%. Colorado has a base sales tax rate of 3.90%, but local rates can bring that up to 11.2%. Precision is impossible, so IMHO a rough estimate flat rate handling fee makes more sense.

https://www.avalara.com/taxrates/en/state-rates.html

     Agreed it would be almost impossible. Not only do you have the different instate rates but you also have the different tax rates based on the item type. There are over 10,000 various state, county, city, parish, township....... tax laws. That would be a LOT of different handling charges and a formidable task to keep current and accurate the way tax laws change. 

[rosszonebricks]

I'd prefer a more simple and global solution:  Don't charge fees on sales tax. 🙂  

[buyselljack2016]

Giving the nearby buyers a beating with a flat rate charge for shipping vs the east coast buyer, but concerned about charging them a few extra pennies to cover your fees?  I'm confused🤔

[gone.c-33]

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@lesey06 wrote:

I understand the cost per transaction may be small.  However lets says the difference is only $0.50 on 8 transactions a day is $4 which is about $1500 a year.  It may not be to you however to me that is material .  Just as important is fairness to the buyer based on your suggestions a Nevada buyer have to subsidize a New York or California buyer. Doesn't seem fair or proper to me.

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Calculating the average sales tax rate doesn’t mean some buyers will subsidize other buyers’ purchase, it just means you’re distributing an expense across all sales.

It makes no business sense to micro calculate such expenses when doing your level of business anyway. You’d probably spend more time, and time is money, calculating the ever changing tax rates of everyone than you’d be saving by micromanaging the sales tax.

[ajs_coins_and_alchemy]

OP is also so worried about "fairness" to their NV buyers subsidizing their NY buyers shipping costs, because they CHOOSE to charge flat rate shipping. Not sure why but that choice is the biggest problem and one of their own making.

[geo2061]

  @gone.c-33   Very well said:

                            " It makes no business sense to micro calculate such expenses when doing your level of business anyway."  

   i need two hands to count the number of bosses (owners)  i have worked for that will trip over a dollar to pick up a penny ...