@lepke1979 wrote:
@dbfolks166mt wrote:
Well you do know corporate greed IS the American way.
I would be surprised if eBay is making much, if anything, on collecting, remitting and managing the software required to handle the sales tax. For a $100 item with a state sales tax rate of 8% and a 12.9% FVF you are talking a whopping $1.03 addition to the FVF's. Factor it into your pricing.
In exchange eBay has to manage the collection and remittance of the tax to the states on a periodic basis and adjust software programs as the tax laws change. All of this requires resources: people, software, office space, etc. which gets paid out of that minor fee. From my perspective it's cheap accounting service.
Realistically, it's probably not that bad. After some up front programming. They most likely are subscribed to feeds that keep track of all the stuff based on zip codes and what is taxed depending on category.
For instance, back when I did support on POS software we had to answer questions for some stores that sell clothing and I guess it's tax free if it's under $100. Not to mention some states do tax free days.
In any event. After the service figures out the amounts. They'll be tied into whatever services the states have to transfer the money at least once a month. Possibly even daily. Although it wouldn't surprise me if some states are mailed a check.
@lepke1979 - you're right, the incremental ongoing costs to eBay beyond the initial set up years ago are likely not that high (relatively speaking for a company their size/available resources).
I believe early on eBay may have partnered with Avalara, though not sure if that's still true today, but it's likely they are using a customized version of existing 3rd party SaaS solutions instead of building their own program from the ground up.
Either way, in my opinion, if other marketplaces and payment processors can somehow manage to cover their costs of compliance at around 3%, there's no good reason eBay *needs* ~13% to cover theirs.
Not to mention I'm pretty sure the 15 year tax sharing deal eBay cut with the city of San Jose goes a long way toward covering those costs as well.
The deal designates all sales on the site that ship anywhere in California as having occurred at eBay HQ - thus allowing the city to collect the local tax that would normally be spread out amongst various cities in the state where buyers actually reside.
San Jose gets 1% of all CA sales and eBay gets a kickback of 30% of anything they collect over $5 million a year - estimated to be worth $150M to eBay but of course that could be more or less depending on how much tax they collect.
https://news.bloomberglaw.com/daily-tax-report-state/no-strings-attached-tax-deal-shows-depth-of-eba...
When you get down to the bottom line, and that is what this is all about, I really don't care what eBay does with regards to their revenue generating efforts that is what they are in business for. Buyers and sellers either accept and adapt or they can go elsewhere.
My only concern is my own bottom line and whether I am making a net profit and a decent ROI. I don't have all that many buyers asking me how much I paid for the item and what my profits are. At least eBay has full disclosure on their fees. How many sellers would be willing to put their costs into their listing description and the profit percentage they are making? Would they get as many complaints about how much they are making as eBay seems to get about the fees on taxes among other things?
