mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@prettywoman-2012 wrote:@cynthealee2 That is what I have been figuring, also. That the actual fees are much higher than the fees (in proportion of the money you take in) shown to you on those pie charts in Seller Hub.
The STATS inflate the money you take in, because they incorrectly sum up the
- item price,
- shipping and
- taxes into one lump sum as "income," when the only portion of this calculation should be the item price for which the item sold.
By inflating the income part, the fees appear to be LESS than what they are, in reality.
And this is just how it is now...how it would be in the Managed Payment system is a whole lot worse, I believe. While the payment processing fee that eBay intends to charge on each sale is about the same percentage and even the 30 cents does not change from PayPal's current take, the fact that they intend to charge the entire transaction as one lump sum with an additional 2.5% (total of 12.5%) effectively means am increase in fees on the shipping FVF by 2.5% and an increase in fees by 12.5% new charge on the previously NOT charged tax portion of the buyer's payment. Yes, PayPal charged - since November 2019 - a small percentage on the tax part of buyer payment, but that is already taken into consideration when Managed Payments processes the entire payment by buyers. What is new is the tax 12.5% FVF and the above-mentioned 2.5% on jewelry and clothing item FVF.
How some people can say this is a saving for us sellers is beyond me. No matter how I try to be positive about this, my previous experience with Inferential STATS and other calculation processes is pulling me down.
PW🙃👀🐿
Just as in reconciling a 1099k each year it is important to understand the difference between Gross Receipts and Gross Income. They are not the same. As we know, 1099k's report Gross Receipts.
What you outline above is Gross Receipts, not "income". Ebay nor PP are inflating your income. They have no way of knowing what your income is or all the expenses involved that you may have. Certainly they know what the tax is and that is not income and if you print your shipping labels through Ebay, then they know how much shipping you pay. But beyond that they have no visibility on your expenses.
What you state above is the same in PP too. MP and PP report these numbers in the same fashion because that is what the IRS requires of them. To get this changed, we need to lobby IRS to change their requirements. Until that is done, it isn't going to change.
"...they intend to charge the entire transaction as one lump sum with an additional 2.5% (total of 12.5%) effectively means am increase in fees on the shipping FVF by 2.5% and an increase in fees by 12.5% new charge on the previously NOT charged tax portion of the buyer's payment"
That isn't quite accurate. I know I've posted this before, but clearly I didn't do a very good job of explaining it. So I'll give it another try in the spirit that I'm only trying to help you have a better understanding.
In Fashions for a non store owner the NEW MP Simplified Fee will be 12.35% not 12.50%. Of that 12.35 % it breaks down as follows.
2.9 % Money processing fee
9.45% FVF
12.35% Total Simplified FVF fees
Currently you pay.
2.9% Money processing fee through PP
10.00% FVF in Ebay.
12.9% Total Fee
12.9% - 12.35% = 0.55% reduction in fees.
Now we have to take into consideration that the new Simplified fee applies to sales tax too when in the past we have only paid money processing fees on that money. So that is absolutely a fee increase related to sales tax. And as I've said many times, I am firmly against this.
But if you only look at a few transactions or less, you can't get a realistic picture of the impact of this new fee structure on you account. You need to look at at least a months worth of transactions. Go back and find a month in your sales history that seems to be pretty typical for you and do the comparison. You may just be surprised at what you find. With a small amount of sales that have no sales tax on the transaction mixed with all those that do, it is likely that you will not have a real impact to your overall FVFs paid due to the .55% FVF discount on your product and shipping sales.
For myself what I'm seeing so far in the month of May is a neutral result. I have about 24% of my sales are not taxable. It will be interesting to see how the month finishes. Oh this is US sales only. International is a completely different discussion to be sure.
For you DVDs you sell, currently you pay a 12% FVF to Ebay. In MP it will be 14.35%. Following the same path as above it comes out as follows.
2.9% PP fee
12.0% Ebay FVF
14.9% Total Fees.
2.9% MP Fee
11.45% FVF Fee
14.35% Total Fee
14.9% - 14.35% = 0.55% savings on overall fees.
And in case I wasn't clear before. I don't think most sellers will see an overall savings with the MP Simplified Fees on US sales. But I also don't think they are going to see an increase either, at least for many if not most sellers.
Facts are facts. The numbers I stated above are the actual numbers. While you can try to dispute that, they are the published numbers by Ebay for MP. I'm unsure as to why you resist working the the real numbers so you can get the correct information in which we can each make an informed decision on what is best for our little businesses.
You are in a completely different situation. Moving from having micro payments from PP to MP that doesn't have such a program would be extremely spendy for you and anyone else being faced with the same move. I'm very glad that Ebay did not put you into the program in July. And I hope they do look at some options for sellers like you for future entries into the program. They certainly should.
@bar-29368 wrote:
How can sales tax be included in Gross RECEIPTS if the seller never actually received it?
The IRS defines "Gross receipts" as "The total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses."
https://smallbusiness.chron.com/gross-sales-vs-gross-receipts-25086.html
Regarding the eBay fees conversation, I think the main issue is eBay has been saying since it was first announced that sellers could be expecting consolidated, simpler billing that will lead to lots of savings.
I don't dispute that at all. That is factual. While I haven't posted anything directly regarding that on this thread I sure have on others. You are right, this is an issue, but IMHO not the main issue anymore.
Sadly, as usual when eBay "simplifies" something, it's bittersweet. Improves slightly in one area, but declines in others, without really much of an overall difference at the end.
YES, absolutely. On this thread linked below, for a period of time we were joking around about that. One member posted a Movie Poster type thing about a horror movie called Simplified Fees or something like that. I made a comment that it was the Sequel to the original horror of Simplified Returns. And I do NOT want to see the next installment if it becomes a trilogy.
Many were pretty reluctant to trust eBay with their funds, and the only hope at the end was that it would at least provide some improvement in terms of savings, as eBay wouldn't be using outside providers and would definitely be saving on their end. Sadly it doesn't seem like it is much of an improvement, yet the worries some had about trusting funds with eBay still stand.
IDK if "improvement" is realistic comparison. But I do understand that it is something we all do. With that said, MP hasn't had any issues with the security of our money or financial data. So it is just up to each of us to make the decision for ourselves and to do whatever is right for ourselves. When the time comes and you are told you are going into MP, that is the time to decide if you are going to give it a try so you can find out for yourself if it will work for you or is it time to move on. Doing what is best for you is the right answer.
I also have recommended that sellers set up a checking account just to use with MP. If there are concerns you don't want them to have access to your money at your bank, this will keep that restricted to whatever you keep available in that account. So easy these days to just transfer your money out of this account into a different one that Ebay has no access to. But with that said, I've read no stories from existing MP sellers that there has been a problem with Ebay dipping into their money in their bank account. Certainly I could have missed a store, but I'm just saying I'm not aware of one.
@cynthealee2 wrote:
@bar-29368 wrote:
How can sales tax be included in Gross RECEIPTS if the seller never actually received it?I believe that was Pretty's point.... the sales stats on your seller hub include EVERYTHING... and eBay seems to be using THOSE figures to claim that overall most sellers fees will be going down.
Because they are REQUIRED by IRS rules to report it that way.
@gwzcomps wrote:
@mam98031 wrote:Just as in reconciling a 1099k each year it is important to understand the difference between Gross Receipts and Gross Income. They are not the same. As we know, 1099k's report Gross Receipts.
What you outline above is Gross Receipts, not "income". Ebay nor PP are inflating your income. They have no way of knowing what your income is or all the expenses involved that you may have. Certainly they know what the tax is and that is not income and if you print your shipping labels through Ebay, then they know how much shipping you pay. But beyond that they have no visibility on your expenses.
What you state above is the same in PP too. MP and PP report these numbers in the same fashion because that is what the IRS requires of them. To get this changed, we need to lobby IRS to change their requirements. Until that is done, it isn't going to change.
"...they intend to charge the entire transaction as one lump sum with an additional 2.5% (total of 12.5%) effectively means am increase in fees on the shipping FVF by 2.5% and an increase in fees by 12.5% new charge on the previously NOT charged tax portion of the buyer's payment"
That isn't quite accurate. I know I've posted this before, but clearly I didn't do a very good job of explaining it. So I'll give it another try in the spirit that I'm only trying to help you have a better understanding.
In Fashions for a non store owner the NEW MP Simplified Fee will be 12.35% not 12.50%. Of that 12.35 % it breaks down as follows.
2.9 % Money processing fee
9.45% FVF
12.35% Total Simplified FVF fees
Currently you pay.
2.9% Money processing fee through PP
10.00% FVF in Ebay.
12.9% Total Fee
12.9% - 12.35% = 0.55% reduction in fees.
Now we have to take into consideration that the new Simplified fee applies to sales tax too when in the past we have only paid money processing fees on that money. So that is absolutely a fee increase related to sales tax. And as I've said many times, I am firmly against this.
But if you only look at a few transactions or less, you can't get a realistic picture of the impact of this new fee structure on you account. You need to look at at least a months worth of transactions. Go back and find a month in your sales history that seems to be pretty typical for you and do the comparison. You may just be surprised at what you find. With a small amount of sales that have no sales tax on the transaction mixed with all those that do, it is likely that you will not have a real impact to your overall FVFs paid due to the .55% FVF discount on your product and shipping sales.
For myself what I'm seeing so far in the month of May is a neutral result. I have about 24% of my sales are not taxable. It will be interesting to see how the month finishes. Oh this is US sales only. International is a completely different discussion to be sure.
For you DVDs you sell, currently you pay a 12% FVF to Ebay. In MP it will be 14.35%. Following the same path as above it comes out as follows.
2.9% PP fee
12.0% Ebay FVF
14.9% Total Fees.
2.9% MP Fee
11.45% FVF Fee
14.35% Total Fee
14.9% - 14.35% = 0.55% savings on overall fees.
And in case I wasn't clear before. I don't think most sellers will see an overall savings with the MP Simplified Fees on US sales. But I also don't think they are going to see an increase either, at least for many if not most sellers.
I still strongly disagree with your math on the fees. There is a high likelyhood buyers will be paying sales tax in clothing and media categories. If sales tax wasn't a factor your percentages would be correct. Increase or decrease on the overall is up for debate as you have pointed out in other posts.
What? I never said people don't pay sales tax nor have I said that any category gets more or less buyers paying sales tax. I also did NOT say sales tax is not a factor. But you can NOT get an accurate picture of what these fee changes will do to you unless you compare it for a month or so's worth of transactions. You can argue that point all you want, it won't change anything. You just can not get an accurate picture of what these changes will do for your business until you run more numbers. If you prefer to determine your decision on what to do on less information, that is your right and completely up to you. I don't recommend it, but that is just me and that has nothing to do with what is right or wrong for you.
