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

[AddieJoss]

Originally Posted by ibuysportsephemera

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

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

[Michael B]

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[thecatspajamas]

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.

[ibuysportsephemera]

Originally Posted by AddieJoss

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

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


Jeff