E-Bay Fees (I know, again)
DollarAfterDollar
Posts: 3,215 ✭✭✭✭✭
Forgive me for bringing up this sore subject again but I know many of you are much better versed than I in this. I sell only the occasional coin on E-Bay and as such never felt a store was a practical expense. Now that E-Bay is gobbling up 12.55% as a Final Value Fee should I re-consider? How much is saved with a basic store today?
Thanks in advance for responses.
If you do what you always did, you get what you always got.
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You used to pay eBay 10% plus 3% to paypal without a store. The net take is lower.
I am not sure on the store breakeven math, but at $20/mo and fees at what? 8.625% or so against 12.55%? That is about $500 in sales and up where it starts to save you money?
"It's like God, Family, Country, except Sticker, Plastic, Coin."
This. Fees have not gotten higher, especially since PayPal is up to 3.5%. You would be paying 13.5% under the old system.
The answer to the store question really depends on volume as @DelawareDoons points out. The only thing I would add is that if you are selling bullion in the bullion category, you can get an even lower rate than the 8.6% At 7% for bullion (or lower for higher values), you are saving more than 5% in fees with the store so you only need to be doing $360 in average monthly sales for the store to be worth the expense.
Fun fact, if you sold a $10,000 bullion item (I know, crazy large) and had Top Seller discount, the TOTAL fees for the sale would be 3.6% which is barely above the PayPal fees alone.
FYI, the bullion fees (with store) are:
7% if under $1500
5% if between $1500 and $10,000
4% if over $10,000
Very rarely sell bullion. I think all of last year sold $2,500 in various collector coins. I think I'm right on the border between needing a store or not. Hmmm.
I sold some watch parts last week on ebay, first items in a long time. auction came to $262 plus $20 shipping with insurance in medium flat rate box. Ebay said I would be receiving $236 from them total. Its been 8 days since buyer paid and they have received the item, I have still not received my money! Ive been an ebay member since 1999, over 4k in positive feedbacks. And they cant even get me my money and they took $46 of it! Thats way more 10 or 12 %. Paypal usually had my money in my account in 1 business day. Probably done with them myself.
Are you set up for daily transfer or weekly? Does it show as cleared under "Payments" or still "processing"? If the fees were $46 on $282 shipping, was this an international payment?
Almost all of my payments clear in 24 hours and are paid within 24 hours of clearance.
If you are only doing $2500 per year, then a store doesn't make sense. [Although you will get the free shipping supplies every quarter! LOL] The added free listings aren't going to matter to you unless those were all $5 coins you were selling. And the savings are nowhere near the cost of the store.
Like anything else you sell, the question is the wholesale/retail spread. For example, even with the 7.5% that I pay in eBay fees, there is no point in selling common date circ Morgans on eBay. If I'm lucky, I'll get 10% over wholesale so it is better to just wholesale them: same money (7.5% + shipping) and zero risk. On the other hand, the wholesale/retail spread on most exonumia can be 50% so it is better to retail even if I were paying 12.5% in fees.
I consider the eBay store fee Opex - fixed cost like a table fee at a show (the eBay worldwide money show). I might have as many as 300 items listed on eBay at a time Bin or BIN / make offer. Mainly are small ticket items < $100, listed at cost + plan markup (for eBay). I believe the limit is 500 items. It’s $27.95 a month less than what it would cost 2 people to go out to dinner.
Bigger ticket material over $300 - usually do at shows only as these usually operate best on tighter margins. All fighting at show is table fee / travel expenses which can be a big hole get out of. So in that arena how much did I clear after table fee (and other show costs) and cost of sales? Having material offered me from bourse can buy right helps. Wholesaler has matl abt 70 pct CPG so if can setup 7a (public arrives at 10a) can pick off good stuff.
So I look at eBay Variable Selling exp as pct of sales (fees other than store) in computing Markup factor / VSE plus commission along with Amy fixed cost impacts sch c related.
Managed pmts I reconcile with the SJ to verify eBay paid me and how much actually being charged. At end of month their sales report get a total for all the fees. Can be very sobering especially if promo fees (one decided promote the item).
So as far as you doing a store I guess that your call based on what you do. Just calculate all the costs and see how your doing.
I transitioned to a store a few years back. Wished I had done so sooner. The fees are better. But also nudged me to sell a lot of other things and reduce this packrat's hoard a junk (nice junk though). Gotta start listing all the LPs. I was waiting for the weather to cool off for safer shipping.
I moved to a basic eBay store very soon after I started selling 10 years ago. The monthly cost is $21.95 (if renewed yearly) and comes with many more free listings which has encouraged me to sell less costly lots. The managed payments are working just fine for me despite all of the controversy when it first came about.
And don't forget the shipping supplies! It's like getting 4 months free.
I don't understand bringing up PP fees as justification for ebay charging more now. Ebay has managed payments now to avoid PP use so they raise the price of their fees so you can feel better that it's still .5% less than when they were combined??
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Let’s use round numbers since the exact ones don’t matter for an example.
Suppose eBay used to charge 10% to sell and item and PayPal charged 5% to process the payment. Your net fee to sell the item and get paid was 15%. If eBay now brings the payment processing in house and charges you 13% to sell and get paid for the item, you pay less than before. eBay gets more overall, but where the money goes doesn’t matter. You MUST pay to sell and process the payment, and with there new structure it’s less.
So whatever the actual eBay and PayPal numbers used to be and are now, the end result is you are paying less money to sell and get paid for an item. If you only look at the eBay fee in both scenarios and ignore the fact that you used to pay PayPal as well, then you’re comparing apples and oranges.
It's really quite simple. The fees you pay now have two components: the "final value fees" and the "payment processing fee". Two different services. Two different fees. All in one simple package.
The payment processing is done by Ayden.
But, what do you care? The fees you pay are now CHEAPER. It's a win for the seller. It takes twisted logic to make this into "ebay charging more". When eBay and PayPal were one company, you paid both separately. Now eBay and Ayden are one company and each charges for the service they provide. Why would you expect eBay to take over payment processing from PayPal and do it for free?
This!
Sorry, I was typing while you posted. I could have just agreed with your post.
The same thing happened when "free shipping" first became a thing on eBay. Some people would prefer to pay $27.95 for something and get free shipping than pay $15 and be overcharged $10 for shipping.
I believe when I had a store years ago you were able to cancel at any time. Not sure if its an annual fee now or still monthly, wherein you could cancel store at any time. If it is still monthly, nothing lost but one monthly store fee to give it a try.
It sort of ends up being 1+ months. You have to pay for a full month, so if you start in the middle of the month you have to pay for the pro-rated partial month.
That's still a thing. People just love free shipping...no matter what it costs them.
eBay standard 1st class remains the best bargain on the internet, by the way. Since a 1st class letter is now 58 cents, it is almost criminal that I can ship a coin for 53 cents WITH INSURANCE!!!
God bless eBay and Tiny Tim.
One slight difference. If you want to return an item and shipping isn’t refundable (let’s ignore the “file a snad and all returns are free” argument… let’s just say you don’t like it but the seller didn’t do anything wrong) then being overcharged on shipping means you lose on the return. So maybe $30 and free shipping means the seller loses in the return versus $25+$5, but if you pay $15+$15 you’re in a bad position with a return. Also in the old days the shipping fee could be a bit more hidden than it is now, so it was easier to not realize the total you were paying. But overall I agree with your point and to a large degree it’s an apt example.
When I get a chance, I need to review my store listings that are priced between $21 and $30 or so. I've had a couple of $21/$22 offers on coins priced at $25 and I've countered at $20 because it saves over $3 on shipping. Plus, I get insurance with the $20 sale but not a $22 one.
And now we’ve learned a valuable lesson in procrastination.
Sure, that's always possible. My comment was meant to address transactions that don't have any irregularities such as you described.
Yes. It actually annoys me when an auction ends at 21 or 22. Lol
I can't remember the last time I had a buyer pay for shipping on a return...
I’m not talking about the return shipping, I’m talking about refunding (or not) the original outbound shipping cost.
Don't forget that store subscribers> @bsshog40 said:
The buyer can still use PayPal to pay. I'm sure PayPal doesn't process that payment free of charge to eBay. Someone has to absorb those fees.
it's crackers to slip a rozzer the dropsy in snide
the annual fee for a store is lower "per month" than the monthly fee. Now if you sign up for the lower monthly annual fee and close your store before the year is up you get charged a pro-rata fees based on the number of months remaining which ends up equaling the "difference" between the annual fee per month and the non-annual monthly fee. I think I explained it correctly.
it's crackers to slip a rozzer the dropsy in snide
Me, too. I've always had to pay both.
Or credit card fees as well. Payment processing isn't free.
https://pages.ebay.com/stores/subscriptionterms.html
I guess my point was missed. All I was saying is ebay came up with a system for buyers to not have to use PP and then still added processing charges. So all they alleviated was clicking the little PP button to pay and letting you click your acct. method to pay. I know it still costs to process payments but when I first saw this ebay option, it looked like ebay was making "all things better" when it really was giving them the option to get charge fees instead of losing it to PP. No biggie to me as I'm not a seller. Just an occasional buyer.
My Original Song Written to my late wife-"Plus other original music by me"
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But they also REDUCED the net fee. They did make things better. Making payment processing completely free would be better still, but any reduction is better. They never sold Managed Payments as free payment processing--it was always very clear the fees were just going to go to eBay and they'd be more streamlined.
I think at the end of the day I'll just leave things as is as the things I sell usually are less than $200 and I rarely sell $400 + in a month. If I step it up I'll consider a store.
I generally blow out things that don't sticker (keeper coins) or don't fit what I'm working on currently. I can usually sell things in a live auction for more than the bottom feeders on E-Bay are willing to pay anyway.
Thanks again for all the points to give consideration to.
As of today still no funds! Item was bought from Florida and delivered in 3 days. Ebay sent an email on Dec. 2nd saying funds would transfer in 1 to 2 business days.Been a week now. I dont know anything about transfer schedule selection.
They definitely made things better. They NEVER said they were eliminated payment processing, just that they were streamlining the process.
It is also worth noting that they might well be "losing it to PP". Within managed payments, the buyer can be using PayPal or a CC which results in PayPal or the CC collecting their fees. I don't know what PayPal charges eBay, but given the INCREASED 3.5% PayPal rate, eBay might be making LESS THAN ZERO on the payment processing.
I'd wager the chances are essentially zero that an entity the size of eBay is paying PP the same rate as a retail user.
I agree which is why I said "I don't know what PayPal charges eBay". However, if you consider that the eBay Managed Payments rate is about 1% less than the old eBay + PayPal rate and that PayPal raised their rates by 0.5%, they have to be paying less than 50% of the normal rate to be at break even. You also have credit cards that have merchant rates of 3-5%.
So, I don't know that it is a huge money maker
Shhhhh, it is still the cheapest, highly trafficked site available. Over time the model will surely move towards getting a bigger and bigger cut, but still way less money than any of the major auction houses.
Totally agree. And generally cheaper than a B&M, although the fee model is different with predominantly incremental costs for eBay versus predominantly fixed costs for a B&M.
To be fair to the major auction houses, they do a lot more of the work. eBay is pretty much "do it yourself".
shhh...don't give the haters an inch or they'll take a mile....
I sell a lot of coins on eBay even though they are available on my site for less. Who's doing that? Me?
Sorry, I don't understand. The comment of yours that I replied to mentioned "eBay" and "major auction houses". There wasn't anything about your website.
Depends on whether you consider GC a "major auction house". I do, and find that for a lot of coins, GC is very cost competitive and a better alternative than eBay these days.
I view eBay as an advertising /marketing platform.
As someone who has paid to advertise a business in the past, eBay is by far the least expensive per eyeball venue on earth that gets great results.
GC is fine, but not cheaper than eBay. I can sell a coin on eBay for 7.5% all in (8.5% without top-rated seller discount). If you are over $1000, GC is 10% BP. If you are under $1000, GC is 15+%. For coins under $100, GC is 20+%
I didn't say GC was cheaper, I said it was competitive (for some coins). When you factor in that they do the photography, I can ship multiple coins to a single address, and that GC will send coins to CAC (of which I'm not a member) for the consignor, it's a no-brainer for me to use GC in many cases. YMMV.