Will sellers continue to sell on Ebay under the new EBAY MANAGED PAYMENTS??
 

Just curious what my fellow card members thought about the new change that Ebay is ramming down our throats in a month.

For the uninitiated, because I don't sell on Ebay, what exactly is the upcoming change?

What is this in a nutshell?

From what I understand, eBay is effectively moving off of PayPal as it's main payment processor and beginning to process payments themselves. This requires users to now provide direct deposit information to receive payments.

That doesn't sound like a bad thing . . . when I occasionally sell something usually go to PayPal and transfer proceeds to a bank account anyway. Must be more than that. (Maybe tax reporting ramifications?)

Ebay has been divorced from PayPal since 2015. I'm guessing it is their attempt to finally push them out of the picture and become a "one stop shop" and start collecting some of the payment processing fee money. If sellers don't sign up for the program, they will cease to be allowed to sell on Ebay.

I rarely sell but yes the sellers are going to stay on eBay. There are no other option(s) that i know of with the eyes eBay gets. This is the same whining everyone done when we had to use PayPal.

I receive some things direct deposited to my Paypal account, I wonder if I can use that direct deposit info. I really hate giving my bank account info to anybody.

The answer is always money. As was said, Ebay is going to take the payment fees instead of letting paypal collect them. It makes business sense as long as they don't lose too many customers. I don't sell on ebay much at all (if ever anymore) so it doesn't affect me unless a lot of sellers leave.

For the record, I voted yes in the poll as I doubt I would/will quit with this new change.

Another major change is, with the new change, there will now be a "hold" on your money. No more getting it instantaneously. The hold is around 3-6 days I am hearing.

Managed payments
 

I haven't been switched yet, but I have talked to at least a dozen sellers who have switched to managed payments, and all of them seem to like it. The downside is that most of the payments come through credit cards, and the payments are then paid to your bank account, so you don't have money building up in PayPal like you normally would. Also, if I understand correctly, your selling fees are taken out from each payment, so you don't have a big payment to eBay at the end of the month.

People can still pay you with PayPal, but the default will be a credit card, and you have to click an additional link if you want to pay by PayPal. It is different, but it seems to work fine.

As to the poll, why would I quit selling? I get a nationwide audience, the fees are much cheaper than the fees for setting up at a show, and, even though eBay has a million small glitches that can be trying, it is a good system. My sales have never been so good, and 99% of the customers are easy to deal with. Plus, I get huge postage discounts by printing the eBay/PayPal shipping labels.

It won't matter. People will say they will get out of the hobby or quit selling but then list their items on eBay and be damn glad they can.:D

Taxes
 

The 1099 requirements will be the same as the current PayPal requirements. 200 transactions/ $20,000 in sales.

Rick, are you setting up a separate account specifically to deal with this, or will you give Ebay access to your main checking account?

Account
 

I am going to set up a separate checking account.

Stay with eBay (of course). Where else can I get the type of exposure I get for primarily sports memorabilia (not cards)? I am not a huge eBay fan but until someone rises to the challenge they are the only game in town.

Jeff

I signed up for Managed Payments in September of 2018 and realized I made a horrible mistake and was able to opt out the same day. At that time I was not able to accept PayPal which caused a buyer to cancel. Then one payment was made with AMEX and it took a week for me to get that payment. eBay said they needed to receive the payment from AMEX before they would pay me.

I think many people sell on eBay and keep those funds in their PayPal account to use for future purchases. With sales going directly into bank accounts I wonder if buyers will be less likely to spend money than if it was just sitting in their PayPal account.

I guess we'll just have to wait and see how this all works out.

I got the notice to migrate by July 15th. I don't like it, but I don't have much of a choice.

Ebay is selling it as a cost savings, but it's quite the opposite.

Raw numbers on the surface bring the %'s, just slightly below the combined Ebay and Paypal fees.

Those numbers ignore that Ebay is now going to start charging a final value fee, on top of the processing fee for state sales tax collected.

A sale to a bidder in Alabama, might cost you a bit more then a sale to a bidder in New Hampshire. Won't cost Ebay any more money though. Higher the sales tax rate, the more money they make off your back.

It also ignores how many sellers pay for their bills. By taking the fees directly out of each sale, it skips the step of sellers paying their bill with a debit or credit card and getting a couple points back on your bill on the backend.

Also, like mentioned above, I'm not sure how it will affect bidding, when some buyers/casual sellers aren't looking at their Paypal stash as much, to spend their disposable income now.

Don't like it, but it doesn't really matter to Ebay I guess. Plenty of evidence everywhere they don't care about regular people, including the disgusting story circulating about the ECommercebytes folks.

Oh well..........

It's their playground and if you want to play it has to be by their rules. I don't like it but that is the way it goes. I signed up both my accounts for managed payments and thought it would start immediately. Instead I received an email that I am on the list, whatever that means. At least now managed payments will take all forms of payment. When it first started it was only eBay payments which is why I didn't opt in.

Jeff

eBay
 

I received an email in the spring of 2019, so I tried to sign up. I received a message that told me that an agent will be calling me, but that never happened. I also received a message a couple of months ago asking me to sign up, but when I tried, I received a message that I was not yet on the list. I can't believe that all of this will happen next month.

Also, when managed payments first surfaced, PayPal was not going to be accepted, but not managed payments will include PayPal.

Not trying to defend Ebay but this statement is not how it works under Managed payments. They (Ebay) still accumulate all fees and you pay monthly and you can use a credit card if so desired.

Ok, I stand corrected then. Do they just take out the processing fees then, when they sweep into your account, like Paypal, and then bill you for the final value fees later?

It’s less in fees for all sellers. There is no scenario where the fees will go up unless you have a special deal with PayPal. And buyers have more options to buy.
Currently PayPal charges fees on sales tax too.
This is not a bad change. The fees aren’t higher. Besides it’s different/new I can’t see the downside.
Cory Weiser

Cory,

I have read that eBay will be taking a fee per item sold as opposed to paypal that just takes one fee for the entire transaction. For me that would result in a much higher charge since I always promote and try to sell similar items at one time (and offer combined shipping). This type of marketing has been very successful for me so I hope that this is not true.

Jeff

No, the processing fees are accumulated and paid monthly just like the FVF for managed payments.

That processing fee for some Managed Payment members is currently 2.7% with no "hard transaction fee" compared to PP at 2.9% and a .30 transaction fee which helps on lower end sales. However, that is changing in July as Ebay is adding the transaction fee to all.

I've never sold a card (trade or give away dupes), but I expect much grousing and little boycotting. There's no other medium to replace it. High end items can go to an Auction House, but the low-middle end stuff that is the bulk of pre-war and vintage cards sold aren't desired there, and the little auction places get nowhere near the eyes that eBay does on an item. The change is not so egregious as to make it easier/more profitable to list items anywhere else.

As a retired 30+ year finance guy, I can tell you that the real profits going to e-bay with this new set-up will be the float time on the money that they collect instantly from the buyer and hold for 3-5 days until they deem the funds ready to deposit into the seller's bank account. Take those numbers times the tens/hundreds of millions of buyers and sellers and that's where e-bay is making the real money. The .001 or whatever fees you are saving as a seller is vastly negligible when compared to those profits that they will be enjoying.

Like many others, I'm not in favor of the new set-up at all but have to live with it. Etsy isn't really a reasonable alternative, is it? lol

Managed Payments
 

I have been in managed payments for months. 1) Simply put eBay is taking a $.35 fee per transaction with it. They have been losing out on this by accepting PayPal. The way I figure it is they miss PayPal and are starting a "NEW" version of it. 2) You do not wait that long for your deposits to your bank account. Most are sent from Ebay with 1 day (sometimes hours) of items being sold and paid and then there is a few day delay for the deposit to show up in your bank account. You will receive deposits on a daily basis and sometimes (I have had 3) in a single day. You can opt into a once a week deposit if you like. 3) The fact that PayPal is not used anymore is a downside. I use PayPal to pay for a lot of business related things such as Stamps.com shipping and now when my PayPal gets low I find myself depositing money into PayPal from my bank account. 4) My fees are NOT deducted from my payments and my credit card is still charged my full eBay seller fees and related fees every month. I hope this helps, Jeff W

Paypal took 2.9% of the Sales Tax collected. Ebay will now be taking 11.5% of the Sales Tax collected if you have a store.

12.35% if you don't have a store.

Sigh, all I have to add is I miss grandslambids (edit: FYI, ummm, don't try to go to the site anymore, especially at work :eek: )

So of course I just received an email from eBay concerning managed payments. It starts "Welcome to Managed Payments".....like I had a choice :D.

Jeff

LOL...You have a choice alright...don't sign up. That is the choice I am grappling with now.

eBay
 

This is from the email that was received today:

Simplified fees:
○ Once activated for managed payments starting late July, you will pay a final value fee, consisting of a category-based percentage of the total amount of the sale, plus a $0.30 fixed fee per order.1
○ Your final value fee will be automatically deducted from your sales proceeds. You can cover the costs of refunds from your bank account or credit card when your pending payout is not sufficient to cover the refund amount.

I never gave any thought to refunds. PayPal won't be involved, in most cases. So, hopefully, your bank account will have enough of a balance to cover any refunds. If not, it will come from your credit card. I give a lot of refunds from PayPal because of buyers buying multiple items and not waiting for me to send them a combined shipping invoice.

Ok, so I was right. LOL!

The new and improved Ebay.

"To simplify the act of skimming more money from you"

LOL!

Still need to set this up, sounds like a good July 4th Holiday task to read more about it! Paying for items should not change - and Paypal should still be an option

Jimmy

This won’t accumulate enough to be a rounding error. Based on the sales price it adds only about 0.01% more to earnings after already making 10.00% in Final Value Fees. That’s 1/100th of a percent more. Calculated as 1% overnight interest rate times 3-4 days divided by 365 days in a year. Doesn’t even consider the loss of a day until they receive payment and loss of another day when they process the ACH the day before the seller receives payment.

Float Income basically doesn’t exist anymore.

This is the part I can't believe eBay still hasn't figured out. Not only do they benefit from buyers' money burning a hole in their pocket to spend back on ebay, generating additional sales in the process, but if funds used for the second purchase were in the buyer's account already, no additional processing fees are being charged by a credit card issuer for the second purchase. But in Paypal's case, unless f&f is used, they're still going to charge that second seller the same processing fee. There is an awful lot of money that just bounces from one Paypal account to another, racking up fees for Paypal along the way, that never actually gets run through a credit card. By not having a way for users to spend directly from their MP account (except on postage, starting in July), eBay is missing out on additional sales, processing fees for the account-balance-shuffle, and interest on all the funds allowed to build up in users' accounts as they save for larger purchases.

So as I understand this thread, they are cutting out paypal as the middleman and taking their fees directly right away, but delaying your money a few days to steal the float.

Ok, the world is not ending, but I guess if I sold for a living I might view his differently.

Only thing that bums me out a little is that I am a paypal shareholder. . . .

Jeff,
PayPal takes 2.9% plus $0.30 per transaction currently. And Ebay charges 10% (for cards). So the total fee without a store is currently 12.9% plus $0.30 per item. This is the current cost. (Currently PayPal also charges us the 2.9% on the sales tax)

The new fee structure will be 12.35% plus $0.30 per transaction. This is a reduction of .55% for the seller. There is NO scenario where the seller pays more unless they have a special deal with PayPal currently.

If one has an EBay store the the costs are all .85% lower than this plus the Ebay store cost.

Also, the maximum final value fee for EBay store owners is also dropping as well. This will drop to 11.5% upto $2500, which is really 9.15% (plus the 2.35%) upto $2500 ($229 vs. currently $350). Then there is still 2.25% over $2500 instead of the 2.9% PayPal currently charges.

So every scenario shows lower seller fees. If anyone has a factual example of where the new eBay fees are higher than the current ones, I’d love to see it.
Thx,
Cory Weiser

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Cory, you are correct for sales to states which do not have a remote sales tax, or which have low sales tax. Because eBay will be charging that full 12.35% rate to process the "full sale price" (final bid + shipping + sales tax) vs. the current arrangement where the ebay final value fees are not charged on the sales tax portion, there will be a number of states whose higher sales tax rate drives up that total fee price to slightly larger than it is now. It's been a bit since I worked out the numbers, but I recall the break-even point being somewhere around 5% sales tax resulting in equivalent fees for either scenario.

So some higher, some lower, it's probably a wash in the long run for most online sellers. The sticking point for much of the conversation I've read over the new fee structure is that eBay is essentially charging their full commission on the sales tax versus the current arrangement where the only fees charged on the sales tax are by Paypal for processing the transaction. Because they are no longer breaking out the fees for each sale into separate final value fees and payment processing fees, some are viewing this as a tax on a tax kind of scenario, and take issue with that scenario.

Edited to add: I went back and re-worked the math, and the break-even point if you do not have an eBay store is when selling to a theoretical state that has 5.82% sales tax. If the sales tax rate is higher, you will pay slightly more in fees under Managed Payments than previously with Paypal processing the fees.

Also note that if you have an eBay store that is more than just the basic store, the eBay fee under MP drops to 11.5% instead of 12.35%. In that scenario, the seller would see a savings in all cases where the sales tax rate is less than 16.23% (which I believe would be in all cases). So you are correct in that scenario.

Thanks Cory...I am hopeful that you are correct.


Jeff

You might be surprised at how some of the little auction houses do in comparison to ebay.

I have read all the posts and am still confused. It appears that small time sellers like me who accumulate funds in my Paypal account to spend on future purchases are out of luck. Am I correct? You will not be allowed to accumulate funds in your managed account?

You can accumulate them for up to a week depending on how frequent you set your payout, but cannot spend them directly out of your managed payments account except to purchase eBay shipping labels. For all other purchases, you would have to deposit the funds to your checking account, and then either pay directly from there or transfer the funds to Paypal or some other payment source.

So, there won't be paypal as a bucket of funds ? So, a buyer will just sends funds from their own bank account directly to the seller's bank account. So eBay will take funds out for the fees directly from the seller's bank account ? Is this correct ?

Lance, a seller currently pays the PayPal 2.9% fee on the sales tax as well to PayPal now.

Ebay removes their fees from the funds as it moves through them. So the funds come out of the buyer's bank account (or credit card, or Paypal account, or whatever funding source they use), and those funds minus the eBay fees are what gets deposited to the seller's bank account. The seller does not have opportunity to turn around and make a purchase from that pool of money before it goes back into their bank account though.

Buyers can still use PayPal, or a credit card or many other methods in the future. It opens it up more.

Lance if I am reading this correctly, eBay will (eventually) send the funds to your bank account and then when purchasing an item you will have the option to use a credit card to pay fr that item?