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I just noticed another negative of ebay managed payments.
amwldcoin
Posts: 11,269 ✭✭✭✭✭
While going over the terms and conditions something jumped out at me. With ebay and Paypal you only pay Paypal fees on tax ebay collects. With managed payments you pay the entire ebay fee on the tax collected since the payment processing and FVF are grouped together. The additional costs could add up rather quickly, especially to areas that have a 10% tax.
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So you're saying that instead of the 2.9% fee I'm paying on taxes collected by PP, I will pay the item category fee (up to 12.35%, ebay's new highest FVF) on taxes collected by Ebay? If this is correct, I wonder if a top rated seller who gets a FVF discount will see that discount also applied to the tax collected by Ebay.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Good catch. From ebay website:
Final value fees
"We charge one final value fee when your item sells, and you don't have to worry about third-party payment processing fees. This fee is calculated as a percentage of the total amount of the sale, plus $0.30 per order.
The total amount of the sale is the entire amount the buyer pays, including any handling charges, the shipping service the buyer selects, sales tax, and any other applicable fees."
Keep an open mind, or get financially repressed -Zoltan Pozsar
First of all> @amwldcoin said:
This is true, but I don't know about adding up quickly. You're talking about 1% in a 10% tax state.
Message to my ebay account manager:
"If I sell an item that has a 12% FVF that involves a 10% state tax, I am going to pay a fee of 12% on the state tax amount collected from the seller by ebay where I am currently only paying 2.9% on the taxes collected by paypal.
I sell high dollar items in the $2000 range. If my buyer of a $2000 item lives in a state that charges a 10% sales tax, I am going to pay a 12% FVF on the $200 tax which adds $24 to my FVF. Paypal is only charging me $5.80 fee on the $200 tax collected.
So in reality ebay's managed payment fees ARE NOT comparable to those of Paypal as promoted by ebay. Charging me a $24 fee for taxes ebay collects on behalf of a state in grossly unfair. I will be ending my presence on ebay unless ebay can rectify this unfair practice."
Keep an open mind, or get financially repressed -Zoltan Pozsar
You can pick out all the negatives or pick out all the positives, but you really have to look at all of them.
The overall rate is 0.55% lower in virtually all categories. [Positive]
The sales tax is included in that. [Negative]
If the coin rate remains the same (6.15%) then even a 10% sales tax state is pretty much a push. The 0.615% added cost is offset by the 0.55% lower rate.
On a $100 item (shipping included) with 10% sales tax, the current total fees in coins [store but no top seller discount] is:
eBay - $6.15
PayPal - $3.49 (2.9% + 0.30 on the $110 total)
Total fees - $9.64
Using managed payments and assuming they translate the fees the same way they did in all other categories (FVF + 2.35% +$0.30 per transaction), the managed payment fee on the $110 will be 8.5% + $0.30:
eBay fees on $110 = $9.65
No change
And so, if the sales tax is less than 10% you win.
You also score a HUGE WIN if the coin is higher priced because they have heavily discounted the managed payment fees above certain thresholds. For example, jewelry above $2500 has a total managed payment fee of only 2.35% above $2500.
What’s the big deal ? It says you don’t have to worry.
Correct, I no longer have to worry about "third party processing fees." Now I only have to worry about ebay's higher processing fees.
Keep an open mind, or get financially repressed -Zoltan Pozsar
You are overlooking the fact that the overall rate is 0.55% lower - see my math for the $100 coin. On your $2000 item, the overall rate is 0.55% lower than the current PayPal + eBay fees which saves you $12 there.
Way too much math for me. I swore to quit thinking when I retired.
On a $2000 item with a current 10% eBay rate and 10% sales tax:
eBay fees - $200
PayPal fees - $64.10
Total $264.10
Managed payments rate of 12.35%
Total fees on $2200 - $$271.70
Net difference $7.60
ON the other hand, if the sales tax is only 7%
eBay fees $200
PayPal fees $62.36
Total $262.36
Managed payments rate of 12.35%
Total fees $264.29
Net difference $1.93
$7.60 on a $2000 item is 0.4%
And if there is no sales tax in the state:
eBay fees $200
PayPal fees $58.30
Total $258.30
Managed payments fee - $247
Net difference NEGATIVE $11.30
LOL. Well, if you don't want to think or do math it doesn't matter what the fees are.
6.15% FVF applies currently only to basic (or higher level) stores. Everyone else pays the current 10%.
Under managed payments, coin category fee is 12.35% for a non-store and 11.5% for a basic or higher level store. If you remove the current 2.9% paypal fee (included in managed payments) you have base FVFs of 9.45% and 8.6%. Ebay is effectively raising their FVF by more than the 2.9% processing fee they are taking over.
So, Managed Payment is better only if there are no state sales taxes. Do you know how many states have a 0% sales tax? lol
Keep an open mind, or get financially repressed -Zoltan Pozsar
That's not exactly true. It depends on your rate. For the store rate of 6.15%, you win at almost any sales tax value. The tipping point using you 10% FVF is around 5% sales tax
And there are far more states that have a 0% sales tax on coins than have a 10% tax rate.
As for store vs. no-store. Your example alone shows the merit of having a store even if you are only selling one $2000 coin per month (your example)
$2000 coin + 10% tax - no store:
$264.10 total fees
$2000 coin - with a store.
eBay fees - $123
PayPal fees - $64.10
Store fee - $27.95
Total fees $215.05
You forgot these:
Keep an open mind, or get financially repressed -Zoltan Pozsar
The store fee is a fixed cost not a variable cost like the other eBay fees. My business has other fixed costs as well to be recovered in the markup equation - bank fees, subscriptions, supplies, publications, travel, lodging, meals. In addition for online there is shipping cost.
Consequently the markup equation needs to include all the above cost elements both variable and fixed plus the minimal commission. Say all this equates to 33pct margin on sales. This wb a markup factor of 1.50. Of course items one can sell at keystone markup 100 pct will help float the business for items sold less than plan markup.
At shows you have a table fee and show expenses like travel, meals, and lodging. A fixed cost hole to get out of. Buying below bid is critical if sales are weak as this can deflect some of this cost impact and lessen negative show performance.
The fixed cost pct allocated to the markup equation could be based on average inventory or a transaction fee added to each sale based on plan sales volume. There are many avenues.
Many are ignorant of what it takes to make it in the coin business, don’t grasp the math, or have their own goals to rip it from you. Don’t let them bug you. When their BS starts it’s time send them away.
Am I correct to say that there is a FVF or MP fee that covers sales tax, too?
Under managed payment the discounted coin rate for a basic store is a FVF of 11.5% to include payment processing.
Under the current system the discounted coin rate for a basic store is 6.15% with another 2.9% going to paypal to process the transaction.
My total current cost (percentage) is 6.15% + 2.9%, or 9.05%. That is 2.45% cheaper than the basic store FVF of 11.5% under managed payments. I may not be a rocket scientist, but I do have a space age calculator that can add and subtract.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Your 3rd point is factually incorrect as it is comparing apples to oranges. You are comparing the coin rate to the general rate. The current store advantage in non-coin categories is also 0.85% (10% vs 9.15%).
The rate migration in all posted categories is 0.55% lower for store or non-store rates in all cases. So the store vs. non-store gap remains the same in all currently posted categories.
As for your 4th point, we have not figured in the Top Rated seller discount in any of these calculations so I'm not sure why you raise it here. But, the answer is "yes"
Top Rated Plus benefits and requirements
As a Top Rated Seller, you can qualify for these exclusive Top Rated Plus benefits if you offer same or 1-business-day handling time and 30-day or longer free returns:
The Top Rated Plus seal will be displayed prominently in search results and in the listing description.
A 10% discount on your standard final value fees:
For managed payments sellers, the discount is applied to the final value fee which is calculated on the total amount of the sale, including shipping and tax. The discount does not apply to the $0.30 per order portion of the final value fee
For non-managed payments sellers, the discount is applied to the portion of the final value fee calculated on the item price only, not including shipping costs or tax
(reference https://ebay.com/help/selling/selling/seller-levels-performance-standards?id=4080&st=3&pos=2&query=Seller%20levels%20and%20performance%20standards&intent=top%20rated%20seller&context=9056_SELLER&lucenceai=lucenceai
THEY HAVE NOT POSTED THE COIN CATEGORY RATE FOR MANAGED PAYMENTS.
Edited to add: I did talk to CS and they say that the rate is forthcoming but the CS rep did not know what the number was.
I have not used this additional cost in my comparisons. An ebay seller must weigh his individuals numbers to determine if the cost of a store will actually save him dollars.
Keep an open mind, or get financially repressed -Zoltan Pozsar
If I sell an item for $2000 and ebay collects $200 in sales tax in a state that doesn't charge sales tax I pay fees on $200 that should have never been collected in the first place. If the buyer is aware and requests the money back that was illegally collected do you think ebay is going to do the right thing and refund me as a seller. If the buyer doesn't request the refund there is zero chance of me being refunded for the fees on taxes illegally collected.
I recently sold a coin for $500 to a customer in a state that doesn't charge sales tax, there was $30.50 collected buy ebay. Not only was the buyer charged $30.50 they shouldn't have but I was charged fees on it. The buyer is a very active buyer of coins so I sent them a message informing them of the tax collected. The buyer said they were unaware of the problem and ebay owes them thousands in taxes collected.
It's all a money grab by ebay and they don't care about the buyer or seller.
UNTIL THEY POST COIN CATEGORY OR ALIEN ARTIFACT RATES THE RATE IS:
Edited to add:
Hopefully the rate will be much lower. However, check this out.
Keep an open mind, or get financially repressed -Zoltan Pozsar
That is neither new nor a surprise. Managed payments do not yet allow for coins which is why they haven't posted a rate for a non-existent transaction category.
I doubt they'll raise the rate on coins unless they want to cut their own throats.
Professional Numismatist. "It's like God, Family, Country, except Sticker, Plastic, Coin."
State sales tax and shipping will be included in the amount that gets hit with the FVF.
Keep an open mind, or get financially repressed -Zoltan Pozsar
And alien artifacts? Maybe you should tell them they are running way behind. Everyone has to be under the new MP system by end of Feb.
Keep an open mind, or get financially repressed -Zoltan Pozsar
The date I was given was January 25th for the launch of coins in MP.
@errorsoncoins was told he had till July to switch
In one section of "My eBay", it says:
You need to update your account details on file – this is required to set you up for managed payments.
In another section, it says:
You’ve successfully registered for managed payments.
I'm sure everything is right on schedule.
my ebay email says Feb. 28.
Keep an open mind, or get financially repressed -Zoltan Pozsar
It's not 100% clear, but as I read it, this fee is for a dispute which the seller loses when the dispute is filed with the payment company (chargeback, etc.), not just a case on eBay. If my reading is correct, then it's no different than PayPal. I don't remember how much they charge, but it's $15-25 for a lost chargeback case, I think. https://www.ebay.com/help/selling/getting-paid/handling-payment-disputes?id=4799
According to the PayPal user agreement, PayPal charges $10 if in the US
And, for what it is worth, I have never confronted this situation in over 70,000 eBay transactions.
Then surprisingly it's gone down. I think I got hit with it once or twice. Knock on wood I haven't dealt with a chargeback in a long time.
Well, this says $20
https://www.paypal.com/us/brc/article/what-is-a-chargeback
I think I might have had an older version of the table.
🤔🤔🤔🤔 I am so confused! You guys are killing me! My head is spinning trying to follow you two.
I learned a long time ago that you have to calculate Ebay and PayPal fees to determine your costs of selling on Ebay. The easiest way to do that is sell a few things and track the costs.
Bottom line, I think Ebay is trying to copy Amazon's fee and payment structure and they don't care if a current seller is making less money with these changes.
The real question for us is where else are you going to list your items and generate the same amount of sales dollars and profits other than Ebay?
Wow. I was already not happy when eBay started collecting sales tax on my behalf and had to pay PayPal for money that doesn't spend a second in y account. Ugh.
Young Numismatist/collector
75 Positive BST transactions buying and selling with 45 members and counting!
instagram.com/klnumismatics
Hey! I found this calculator that will do it both ways:
https://www.ebayfeescalculator.com/usa-ebay-calculator/
eBay has been a good platform for me sell smaller ticket high markup material. Shows use to buy and sell from wholesaler plus move my bigger ticket somewhat lower markup material say in the $500 -$3000 range where all I am fighting is $150-$200 table fee.
Sort of like a balanced offense.