Ebay fees

[2012ontheside]

Is it me or is Ebay taking way too much in fees? I've been with Ebay on and off for about 12years and it seems like they are taking way too much in fees. On top of that it seems as if they are taking control of my sale. I feel like I used to have more control over what I sell. It's like once someone purchases your item ebay swoops in and handles the sale and you get whatever they figure is yours. They charge shipping and tax not you. After collecting the money they deduct their percent - 12.66% - from your sale price plus deduct tax and shipping even though they've collected the tax and shipping from the customer. That just doesn't seem right to me.

[bluestardiecast · Accepted solution]

---

@mam98031 wrote:

@2012ontheside 

I think you may have some misunderstandings.  If you keep your own books on your sales, you'd quickly realize that some of what you said is inaccurate.

Ebay's FVF covers both your FVF on your sale and the money processing fee that you use to pay to PayPal.  You are likely not paying anymore now than you did before you went into Managed Payments.

" They charge shipping and tax not you. "  While Ebay does charge the sales tax per the state the buyer is having the item shipped to, Ebay does NOT charge the shipping.  Well technically they do, but it is the SELLER that SETS that shipping amount, NOT Ebay.  Whether you use fixed price shipping or you use the calculator, that is completely determined by the seller.

"...from your sale price plus deduct tax and shipping even though they've collected the tax and shipping from the customer. "  No that is not how this works either.  While Ebay does charge the buyer sales tax and the buyer pays the sales tax, not the seller.  When Ebay takes the sales tax from your sales amount, it was money provided by the buyer NOT the seller.  

As to the shipping that the buyer pays.  That money comes to the SELLER.  Ebay does NOT keep it.  YOU get it so you can cover your shipping costs if you charged the right amount to the buyer.

The fees in MP have NOT increased overall fees. The following numbers represent those that do not have a store and the fee rate for most common categories [not all].

Fees BEFORE going into MP
10.20% FVF + 2.9% PP fees = 13.10% plus 30 cent per transaction fee.

In MP the fees are:
10.20% FVF + 2.35% money processing fee paid to MP = 12.55% plus a 30 cent per transaction fee.

Starting August 2nd, PayPal is raising their fees, so they will be as follows:
10.20 Ebay FVF + 3.49 PP Fee = 13.69% plus .49 cent Per Transaction fee

PP is apparently offering different fees to different sellers, likely depending on size. From what I've seen it is between 2.59% and 3.49%.

---

Seller Fees are actually higher now since Sales Tax is now considered a Product and hit with the full category FVF fee. Prior to Managed Payments, eBay did not treat Sales Tax as something to hit with FVF.

Before Managed Payments under the eBay / PayPal system Sellers were only charged the 2.9% number you used on Sales Tax collected amount. PayPal had to treat all money on the transaction the same.  ex $1.00 Sales Tax at 2.9% = $0.029 ($0.03)

Now with Managed Payments Sellers are being charged using your 12.55% number on Sales Tax collected.

ex $1.00 Sales Tax at 12.55% = $0.1255 ($0.13)

eBay in trying to emulate the PayPal system wants to subject the entire sale amount to the category FVF. There is no breakdown of FVF fee on Item Sale + Shipping and then a separate money collected fee percentage for the entire balance like the old eBay / PayPal system.

As we see there is a difference of almost 10% in the fees charged by eBay MP and the old eBay / PayPal system when it comes to just the fees amount charged for Sales Tax.

Sales Tax and even the VAT Tax if you do International Sales is being treated as a product just like the Item you are selling and the Shipping you charge - whether this is appropriate is a different topic for discussion.

It wasn't that way before MP and this is why many Sellers are noticing higher fees. Since most states now mandate sales taxes to be collected on e-commerce sales this has driven up those small amounts of FVF for Sales Tax collected by eBay, thus also increasing the average total fees charged to the Seller account. So by saying that the old way of eBay / PayPal fees and Managed Payments fees are the same is not correct. 

The fees are what eBay wants them to be at their discretion. Sellers should understand their fees breakdowns and make sure their items are priced appropriately to hit their profit margins. Sellers have the choice to lower profit margin and absorb the extra cost or raise their price to accommodate.

[buyselljack2016]

@2012ontheside 

eBay does not charge shipping. seller charges shipping

eBay collects/remits sales tax. eBay does not charge sales tax.

[mam98031]

@bluestardiecast 

Yes fees are slightly higher on sales with sales tax, but they are lower for sales without sales tax by over a half of a percent.  Overall for most sellers, looking at your total fees for any given month is likely to be roughly the same as before MP.  I personally did this comparison for a six month period and each month was basically neutral.  Certainly if you only want to look at a transaction or two you can come away with the opinion that your fees are higher.

For me, I much prefer looking at the actual facts of how it affects me in any given month.  As long as it remains a neutral change, as it has for ALL the time I've been in MP, I'm just fine.  Slightly more on most transactions but less on a few others, simply work out for me.  You might consider taking a wider view of what is transpiring instead of on a single transaction.

[studiodeflores]

I've found that the total fees as a percentage of each sale are about the same as they have always been, and they are the same as the commission fees at the physical store that I have a vintage booth in.  The big difference for me, since transitioning from paypal to ebay managed payments is that the fees are taken out up front, instead of settling up after the monthly invoice.  That took some getting used to, but now I'm glad that I'm paying as I go instead of having a cumulative bill to deal with every month.  

[bluestardiecast]

The states that don't require Sales Tax collection is down to only about 5 right now and should be 0 by Jan 1, 2023 and with the EU, New Zealand and Australia charging 20% VAT on items and shipping charges the fees really start to add up. Over the last quarter our fees for FVF on Sales and VAT Taxes was almost $40 / month and for items sold in September less than 20% were to states or countries with no Sales or VAT tax added. This isn't a large number but it still represents a noticeable increase in fees. 

Sellers can choose not to sell to certain countries, but with only 10% of the States not collecting right now a majority of sales will have Sales Tax added and FVF fees charged for that tax.

We understand this and do our pricing accordingly to help offset these additional fees, but many Sellers don't know or take the time to break down the individual fees associated with the total FVF fees so it may come across as higher fees for no reason. 

Stating the fees for Sellers is not higher or saying total fees is going to be roughly the same is just not correct. Since you have "Visionary" status with over 38K Helpful votes received, you have status and influence with your replies on different subject matters. For some Sellers looking for answers your Replies on topics may carry a lot of weight and no other research may be done.

[house*of*paws]

Hi @bluestardiecast 

Maybe I missed it ... but I don't think anyone's mentioned that PayPal has increased its fees recently.  That makes comparisons between current Managed Payments fees and the old PayPal fees obsolete.

[femmefan1946]

Prior to Managed Payments, eBay did not treat Sales Tax as something to hit with FVF.

EBay did not, but Paypal did.

This is standard practice with all money processors. Ask at the corner shop if they pay their processor fees on the full payment you make for your bread and cigarettes or if the sales taxes are exempt from that fee.

However, the PP fee was 2.9% on domestic sales taxes and the MP fee is 12.35%.

Sales Tax and even the VAT Tax if you do International Sales is being treated as a produc

We non-US sellers also have those fees applied to US sales where there is a state sales tax.

The percentage rise of ~10% is on the percentage of the sales tax.

On a $10 sale from a 5% state,  that would be  a nickel.

On a $100 sale from a 10% state, that would be a dollar.

Percentages are both useful and misleading.

[2012ontheside]

Ok, I think I was just upset with the transaction I just experienced. I reviewed over again and yes I misunderstood on some of it. I guess the thing (after re-reviewing it) is still the fees. I kept wondering why I was coming up with a different amount and I figured it out. Not only are you charged fees on the sale price, which is fine, it's being charged fees on the sales tax and on the shipping. I don't think that sellers should pay a fee charge on sales tax or shipping. I just spoke with a rep and they agree, this is a problem they have raised with their upper management.

[bluestardiecast]

Hard to know if PayPal raises fees if eBay transactions were still being processed and yes it was mentioned that the base percentage could vary depending on the Seller PayPal account between 2.49 & 3.49%. The root situation still exists as to treating Sales Tax and VAT Taxes as a Product with full category FVF being charged - that is still a higher percentage than PayPal even with higher transaction percentage charged. Even at the highest percentage of 3.49 as an example is still lower than the 12.55% FVF Fees eBay MP is charging. That 9% makes a difference. 

If their reasoning is because the cost of administering the distribution and reporting of Sales Tax / VAT Tax is why they are charging more, then so let eBay state that is the cause. That is fine with our business as I know it would cost us more than that 9-10% upcharge on those taxes since right now our cost is under $50 / mo - but what about very large Sellers doing quite a bit more in sales volume than our 400-500 items / mo? But for now, eBay position is there is no fee for this tax collection and distribution.  Again, that issue could be debated as it is off topic for this discussion on whether fees are higher now vs eBay / PayPal model before Managed Payments. By our breakdown and calculation, it is a definite yes.

[femmefan1946]

As long as it remains a neutral change, as it has for ALL the time I've been in MP, I'm just fine.

One thing that is a little bit hopeful with MP is all the agony sellers have reported in changing over.

It is possible that making it tougher to open a selling account -or more exactly a payment processing account- might possibly in future maybe make it harder to hijack abandoned accounts or open new scam accounts.

Possibly,

[justafemster]

Fees on the shipping has been an issue since the bay started charging it.  

Before that, sellers would sell something for $1 with $499 shipping.  And get charged $0.10

Other sellers would sell for $500 with free shipping and get charged $50.00

So ebay decided to even the field.  Charge on the TOTAL transaction.  

Yeah, those ebay reps will agree with anything you say to get you off the phone.  

Oh and you do realize that you were ALWAYS charged on the tax, shipping and sold amount through paypal right?  

[bluestardiecast]

---

@femmefan1946 wrote:

Prior to Managed Payments, eBay did not treat Sales Tax as something to hit with FVF.

EBay did not, but Paypal did.

This is standard practice with all money processors. Ask at the corner shop if they pay their processor fees on the full payment you make for your bread and cigarettes or if the sales taxes are exempt from that fee.

In my example I did state you were charged a fee from PayPal for the money collection no matter the source of those charges. But that fee charged on the Sales Tax amount was for the purpose of our example 2.9% for PayPal and not the 12.55% eBay MP charges. There is the difference in fees between the 2 processes. So if I'm just a corner store using PayPal, my charged % for taxes I collect is the 2.9%, same as the process when it was eBay / PayPal process before MP.  

---

@femmefan1946 wrote:

Sales Tax and even the VAT Tax if you do International Sales is being treated as a produc

We non-US sellers also have those fees applied to US sales where there is a state sales tax.

The percentage rise of ~10% is on the percentage of the sales tax.

On a $10 sale from a 5% state,  that would be  a nickel.

On a $100 sale from a 10% state, that would be a dollar.

Percentages are both useful and misleading.

---

I'm sorry I should have prefaced this discussion with this may only apply to USA sellers since I have not researched fees and how they are charged by eBay MP or by PayPal for other countries. I'm sure there are many different policies in place depending on the country for both eBay and PayPal collections. 

As for your $10 sale / $100 sale - yes you would have differing base amounts charged in Sales Taxes depending on the state, but the example still remains true as you are being charged a higher percentage for that amount with eBay MP versus the eBay / PayPal model. Percentage based on the amount you collect doesn't change, only the dollar amount you pay in those fees.  

$10 Sale / 5% state = $0.50 so you are charged 2.9% ($0.01) on that amount by PayPal or 12.55% by MP ($0.06) only a nickel between the 2 processes - but

$100 sale / 10% state = $10.00 and charged 2.9% ($0.29) by  PayPal or 12.55% by MP ($1.26) - it becomes almost a $1.00 extra between the 2 process, so percentage on amount collected is not misleading as it remains constant - only the base tax amount (based on state / country rate) collected changes which the constant percentage is applied.

It is very hard to average out each sale since you don't know where the potential  buyer is located and the various tax rates for each state. I'm sure it won't be long before localities start trying to get their surtax charge rate. Right now for those International countries mentioned earlier the VAT tax is 20% - so more International sales in total $ means noticeably higher selling fees. Do plan accordingly. 

[mam98031]

@bluestardiecast 

I am aware of what states have no sales tax.  But still on the average month the fees are no different than they were before MP.  Keeping in mind that the fees are about .55% cheaper on sales with no sales tax.  So you can have a few with sales tax before it offsets the savings you have on ONE sale without sales tax.  It isn't a one for one ratio.  

You don't believe me, that is absolutely fine.  Do your own analysist and compare a few months worth of sales in MP and then before MP.  See for yourself.  Or easier yet.  Look at your monthly fees [less any store fees and promotion fees] and compare it.

[mam98031]

---

@house*of*paws wrote:

Hi @bluestardiecast 

Maybe I missed it ... but I don't think anyone's mentioned that PayPal has increased its fees recently.  That makes comparisons between current Managed Payments fees and the old PayPal fees obsolete.

---

@house*of*paws 

I did in post 5.

[mam98031]

---

@2012ontheside wrote:

Ok, I think I was just upset with the transaction I just experienced. I reviewed over again and yes I misunderstood on some of it. I guess the thing (after re-reviewing it) is still the fees. I kept wondering why I was coming up with a different amount and I figured it out. Not only are you charged fees on the sale price, which is fine, it's being charged fees on the sales tax and on the shipping. I don't think that sellers should pay a fee charge on sales tax or shipping. I just spoke with a rep and they agree, this is a problem they have raised with their upper management.

---

We have been charged a FVF on shipping for over TEN years, so nothing new there.  The ONLY part that is new is the FVF on sales tax.