Fees- EBay charging seller on taxes they charge buyer?

[nyquill71]

So it’s an odd question.  How does EBay charge a fee on product/item sold, but also on shipping cost.. and on the taxes charged to the buyer. Example .. item sells for a hundred ..

$100x 13.25% = 13.25 (fee) .. then eBay charges tax of lets say $15.00 then they charge BUYER and then charge SELER 13.25% on that  charge. 15x13.25% =$1.98 .. wait also if you charge shipping to buyer .. let’s say you have to pay USPS $10, but eBay wants 13.25% out of that.. you pay postage and then eBay robs you net 13.25% more 10x13.25%=$1.32.  Also a .30 cent fee on top.   Chow do they get away with this.. does this make sense to anyone??

[mybigsale]

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@soh.maryl wrote:

In what state or states is a real estate agent allowed to collect his commission based on not only the selling price of the property, but on one year of property tax?  

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None... just eBay. eBay is the ONLY company/processor that charges the extra COMMISION on State Tax (13.2 FVF). Everyone else just charges a 0-3% processing fee.

[mam98031]

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@mybigsale wrote:

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@mam98031 wrote:

How are you determining that Ebay's fees are "high"?  What are you comparing Ebay fees to come to this conclusion?  It would need to be a site that get similar traffic.  Just askin as I'm curious as to how you arrive at that conclusion.

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Real estate agent 1 charges his commission based on the selling price of a house.

Real estate agent 2 charges his commission based on the selling price of a house plus one year of property tax.

I didn't say real estate agent 2 's fees were too high. I said it was unfair he included the Tax when calculating his commission.

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Except we are not talking about real estate agents.  That is a completely different industry and has nothing to do with Marketplaces such as Ebay, Etsy, Mercari, Amazon etc.

[mam98031]

Yes. For the first several years of managed payment eBay only charged the low processing fee on State Tax and covered the cost of processing. For the first several years processing fee and FVF were separate.

I'm sure you mean the first 3 years of MP as it started in 2018.  In those 3 years Ebay did NOT charge ANY fee on sales tax collected from the buyer.  None at all.  The Ebay rule at the time was there was NO FVF on sales tax.   Those sellers not in MP were still paying PayPal to process their payments and PP did charge a 2.9% fee on the entire amount of money the buyer paid.

This changed in the summer of 2020 as they started onboarding all sellers to MP.  That is when they created the simplified fee and charged the full fee on whatever the buyer paid.  The onboarding took just about 18 months to accomplish.  But for those seller still using PayPal to process their payments until such time they were onboarded to MP, they only paid the PP fees on the sales tax portion of a sale.

When eBay combined those two fees, eBay started earning the Commission (pure profit) above the cost of processing the State Tax.

Yes they did.  According to Ebay it was to help defray the cost of collecting and remitting sales tax to all the states that required it.  However they failed to mention that the states paid them for this process too.  So they weren't in the hole for this function in the first place that started in 2019.

eBay then goes on to earn even more PROFIT on state tax and shipping costs with the addition of Promoted Listing Fees.

I've addressed sales tax above and shipping in several other posts, so I'm not commenting on that.  I personally see promoted listings differently.  That is a tool Ebay has given us to use if we want or don't if we don't want to use it.  It is the seller that sets the percentage of additional FVF they are willing to pay Ebay if they get a sale.  So to me, the seller decided it was fine, who are you or we to say they are wrong.  

No one is required to use promoted listings if they don't want to.  It is about a million sellers that use them which is a real minority.  With about 250+ Million listings using PL.  

If you disagree with Ebay earning this income off of PL, then don't use it.  It is your choice.

Every time shipping and state tax goes up eBay ends the day with more money in the bank financed by eBay sellers. eBay sellers lose even more with increased costs and increased fees paid to eBay.

I suppose that some sellers do lose money.  Speaking for myself, I don't as I just raise my pricing to cover the increases as to many other sellers.

When I file my taxes, I pay the tax preparer a fair fee. I don't jump up and down with gratitude and let them take more then they earned from my wallet or credit card. 

 I have no idea what that statement is suppose to mean.  It certainly doesn't apply to the subject at hand.

[mam98031]

PayPal charges 3.49% now.  They raised their prices shortly after MP went site wide on Ebay.  There other fees increased too.

It seems that some may be of the opinion that they have the right to set how much Ebay can make off of any given transaction or set their percentages earned.  To be clear, Ebay owns this site, they are the ONLY ones that set their fees.  Like them or not.

[mybigsale]

I am of the opinion that companies should set processing fees to whatever they want, as long as they use processing fees for processing portions of transactions. I am of the opinion that companies should set commission fees (FVF) to whatever they want, as long as they use commission fees on the part of the transaction where a commission is earned.

It's all in the details. When you eliminate the details, you allow companies to just create a fee and apply it Willy Nilly. By eliminating the concept of processing fees and commissions (FVF) you allow companies to charge inappropriate commissions where they don't belong.

eBay is the only company that charges a COMMISSION on STATE TAX. 

eBay was only charging a processing fee on State Tax for the first years of managed payments. 

When eBay combined all fees into one and essentially eliminated the details and correct math of the different fees eBay became the ONLY COMPANY to earn commissions on State Tax.

The majority of sellers were there to support eBay on their right to change the details of how accounting and fees are correctly processed.

That opened the door for eBay when last June eBay went ahead and made sellers pay Ad Fees on not only the item sellers advertise but also the Shipping and State Tax.

Most sellers are of the opinion that eBay can do as they please and don't care if they charge commissions on State Tax and Ad Fees on the total transaction. 

Most of eBay sellers are of the opinion that the ends justify the means. I am of the opinion that how you get to the end is important and giving eBay a pass to get there by any means possible is not the right thing to do.

I am of the opinion the details are important and commissions and processing fees should be used correctly. I am not of the opinion that I have the right to tell eBay what fees to charge.

I still believe eBay is the best place to sell collectibles and 1-offs.  I do enjoy my interactions with other sellers and respect everyone's right to their own opinion. Have a great day and may you have ever increasing sales! Maybe a little too optimistic, may you have ever increasing sporadic sales! 🙄

[jerseyboymusic]

Did @nyquill71 ever come back to this thread?

[mybigsale]

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@jerseyboymusic wrote:

Did @nyquill71 ever come back to this thread?

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No, I think we gave him a headache. Sorry, Nyquil - just a bad joke 🙄

[up_4_reasonable_offers]

it may be old news to you and many others, but to new sellers it is new news (and ridiculous in my opinion).

[up_4_reasonable_offers]

to all of you complaining that this is old news there are many new sellers on eBay and therefore this is pertinent information to many of us who want to know why they are making far less than they originally thought they would.

[mam98031]

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@up_4_reasonable_offers wrote:

it may be old news to you and many others, but to new sellers it is new news (and ridiculous in my opinion).

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That is a bit unfair.  To new sellers EVERYTHING is new.  Which is why new sellers need to not assume they can just jump in and start selling on this site.  It is like any other JOB, you need to do some training for it.  It is ridiculous in my opinion how many new sellers think they don't even need to learn the basics before starting to sell.  Selling fees are one of the basic rules.

It is the most often thing that gets new sellers into trouble all the time.  ASSUMING they know what the answers are or how to process something.

Here are some important links to areas you should really take the time to learn about as a new seller.

https://academy.ebay.com/student/catalog?locale=en


https://www.ebay.com/help/selling/selling/selling?id=4081

https://pages.ebay.com/seller-center/get-started/seller-fees.html

https://pages.ebay.com/seller-center/service-and-payments/funds-availability.html

https://www.ebay.com/help/selling/getting-paid/getting-paid-items-youve-sold/pending-payments?id=415...

https://www.ebay.com/help/listings/creating-managing-listings/creating-listing?id=4105


And make sure you know this policy extremely well.

https://www.ebay.com/help/policies/ebay-money-back-guarantee-policy/ebay-money-back-guarantee-policy...

[mam98031]

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@up_4_reasonable_offers wrote:

to all of you complaining that this is old news there are many new sellers on eBay and therefore this is pertinent information to many of us who want to know why they are making far less than they originally thought they would.

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That is an EASY question.  Because they don't bother to learn the basics BEFORE selling.  How any seller thinks they can make money on this site without even bothering to LEARN what fees the site charges a sure fire way to make mistakes in pricing your items.  But I'll give you a little credit, as new sellers often come to the threads calling Ebay all kinds of names and accusations when it is the seller that didn't feel they needed to take the time to LEARN what the selling fees on this site are.

[kh-stanley1]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread HERE if you wish to continue to discuss this topic.

Thank you for understanding.