Fees are More Expensive with Managed Payments

[melissasminis]

I have an order of $33.98 plus tax is $36.02, I receive a net payment of $28.34, that is over 16% fees taken. It used to be 11% fees taken from ebay in my catagory. I understand they charge $0.30 like Paypal does per transaction. Paypal charges about 3% plus $0.30 per transaction. So when we accepted payment through Paypal directly, it would be 14% including ebay fees, plus $0.30, that is less than 16% last time I checked. Ebay is charging us more with this managed payments scam!!

[femmefan1946]

For a domestic sale both MP and PP charge 30c plus 2,9%.

For a US sale both MP and PP charge 30c plus 3.7%

For an overseas sales both charge 30c plus 3.9%.

EBay charges 10% on your shipping charge and ~10%* on your selling price

The main difference should be that all the costs are showing with MP but for those not yet in MP** the PP fees are immediately visible , while the eBay fees are only available at the end of the month.

But do look at whether your customer is in Canada or the USA. That makes a 0.8% difference.
There's also something I don't understand about foreign buyer charges.

*The FVF can vary depending on category, store subscription, etc.

** I'm holding out.

[pjcdn2005]

@melissasminis 

According to your numbers, your fees were 5.64. I got 5.63 when I figured it out so they probably used more numbers after the decimal than I did. I've written down my calculations for MP fees and compared it to the cost when you were using PP.   If I did everything right, you paid about .10 more for this transaction. 

Since you mentioned tax on the transaction, I'll assume that the buyer was in the US as your listings don't show that you charge gst.

MP  (non store fees)

36.02 x 12.35% fvf = 4.448

International selling fee - 36.02 x .4% = .14408  (For Canadians the international fee for US buyers is .4% and 1% for others)

transaction fee - .30

4.448 + .14408 + .30 = 4.892 fvf

4.892 x 15% (NS HST) = .7338

MP - Total fvf with gst - 5.63

Total fees for same transaction when using PP

33.98 x 10%= 3.398

3.398 x 15% HST = .5097

Total ebay fees - 3.398 + .5097 = 3.9077

Paypal fees - 36.02 x 3.7% (2.9 + 8% for US buyer) = 1.33

transaction fee - .30

total PP fees 1.33 + .30 = 1.63

Combined ebay and Paypal fees - 3.907 + 1.63 = 5.54

Total fees with PP and ebay - 5.54

Total fees with MP - 5.64

US sellers have said that their MP fees are more if the buyer is in a state with a higher tax than others.  That will affect us too but we also have to take into account that we have more international transactions than many US sellers. Also, we pay gst/hst tax on our fees as well. In the past we were only paying that percentage on the ebay fees, not on the payment part. 

[pjcdn2005]

@femmefan1946 

With MP, fees for US buyers are .4% rather than .8%.

For other countries it is still 1% extra.

[femmefan1946]

So US and International fees really are higher with MP than with PP?

That's the first time I've seen that spelled out.

Given that most Canadian sellers have more sales to the USA than otherwise, that is an important difference.

[space_pirate]

I was forced to sign up for managed payments today because it was the deadline. I don't have a store, I only use the 200 free listings. I don't have the volume to justify the extra cost of a store. The final value fee (which is really a commission - that's what they should call it) was 10% under the old structure. On top of that I had to pay 5% GST and 10% PST (Quebec). So that's essentially 11.5%. PP depends on the currency that the buyer is using. That ranges from about 3% to 5% (I'm rounding off to make it simple, with the $0.30 per transaction included). So basically I had to contend with fees totalling about 14.5% to 16.5%.

The new final value fee is 12.35% + $0.30 per transaction. Then the International Fee: "If your registered address is in Canada, we charge an international fee of 0.4% to the US and 1% to all other countries." Ok. so it looks nice so far. 12.35% + 15% tax = 14.2% +0.4% = 14.6%. Or, worst case scenario 14.2% + 1% = 15.2%. Domestic sales would be 0.1% more expensive. But anywhere from 0.3% to 1.3% cheaper for international sales (including USA).

The proof of course is in the pudding. I only have the selling price + shipping in my calculations. And many of my items have the same selling + shipping prices. Therefore it should be easy to compare. But, something tells me that we have more to expect which hasn't yet been revealed. I don't trust them at all anymore. I especially don't trust people who are asking for your SIN without any legal or non-legal justification to do so.

[space_pirate]

"There's also something I don't understand about foreign buyer charges."

Just another excuse to skim more money from sellers. A bunch of word games with vague definitions.

[brya_fonta]

There is also the currency exchange fee. You will be charged 3% if you sell on .com USD & the receive CAD funds

Ultimately selling on .ca with CAD deposits would be cheaper for Canadians.

Ebays way to motivate Canadians to sell on .ca?

[itolduandso]

Sorry to revive this post again but I thought to confirm and summarize the percentage for price budgeting and cost estimating. Based on calculations above the cost of fees based on the listing price of the item before taxes:

PP:     16%

MP:     17%

That's assuming no currency cross conversions (3.5% vs 3%). If currency conversions, then the sweet deal would be as follows:

PP:     19%

MP:    20%

Right?

All percentages are rounded.

And these calculations assume you charge enough for shipping. Whether I have my own shipping or buy labels from ebay, the same charges apply to shipping.

If you purchase labels through Ebay or if you are in the U.S. and participate on the Global Shipping program, then the MP fee is charged on Global Shipping fee as well.  And those fees will need to come out of the item margin bucket, so the actual fees could potentially increase even more. I am not sure in case of labels purchased through eBay but I assume same thing.

[pjcdn2005]

Are you referring to the transaction that I figured out in post 3?

I'm not sure what criteria you're using.

You said before tax....are you referring to buyer paid tax such as US state tax?

Is the buyer in the US?

What province are you in?

It would be best to keep track for a month to see what your fees are overall as it will make a difference if the buyer is charged tax and how much.  Then you can average it out.  You can't really base it on just one transaction.

[itolduandso]

Yes, I used your numbers from post # 3. Selling from Ontario to BC or US for instance. I am not registered for GST/HST.

33.98 is before tax, that's the listing price.

PP way:         5.54 / 33.98 * 100 = 16 %

MP way:        5.63 / 33.98 * 100 = 17 %

If applicable - currency cros-conversion fees are on top of that.

The example about US Global Shipping is a hypothetical example, not applicable specifically to me.

[ypdc_dennis]

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@itolduandso wrote:

Yes, I used your numbers from post # 3. ...

PP way:         5.54 / 33.98 * 100 = 16 %

MP way:        5.63 / 33.98 * 100 = 17 %

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For this example, it is not a 1% difference, only 0.26%  (9 cents divided by 33.98)

[itolduandso]

That's OK, it was all rounded. Just wanted to see a total number of quick and dirty calculation when making estimates about profit margin.

[puretrees]

I'm a few months late to the party but am I not mistaken in my recollection that Ebay insisted that their managed payments would be cheaper for sellers? I'm a hair away from writing to the Ontario Obudsman to file a complaint about false advertising/claims. 

[snoopwiz]

my recollection that Ebay insisted that their managed payments would be cheaper for sellers

I believe they had added cheaper for either some/many or most (sellers).  Whichever weasel word their legal team advised them to use.

[marnotom!]

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@puretrees wrote:

I'm a few months late to the party but am I not mistaken in my recollection that Ebay insisted that their managed payments would be cheaper for sellers? I'm a hair away from writing to the Ontario Ombudsman to file a complaint about false advertising/claims. 

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I don't recall cost savings being touted as a selling point for Managed Payments on the Canadian site.  I know it was initially on the US site, but I don't think it was here.

There's an older MP promo video on this page that trumpets the benefits of Managed Payments.  The fees aren't mentioned:

https://pages.ebay.ca/seller-centre/fees-payments/managed-payments-on-ebay.html#what-is-managed-paym...

[reallynicestamps]

The word I kept seeing was "simpler".

The good thing about writing is that we can go back and see what is fact and what is wishful thinking.

There are a couple of minor savings that sellers would rarely see.

One is that on refunds, eBay keeps the 30c non-refundable transaction fee, while PP keeps both the fee and their percentage of the payment (2.9-4.4%).

Another is that come Fall, PP has announced they will be increasing their percentage charged.

And one rise, where both processors charge fees on the whole payment but PP's processing fee is 2.9% and eBay which deals with the entire transaction charges 12%??? I don't understand this, obviously, and it seems only to apply to US sellers.

[pjcdn2005]

And one rise, where both processors charge fees on the whole payment but PP's processing fee is 2.9% and eBay which deals with the entire transaction charges 12%??? I don't understand this, obviously, and it seems only to apply to US sellers.

@reallynicestamps 

I'm not totally sure what you are referring to but afaik there isn't difference in the way that sellers are charged other than that some of the .com fees were made higher a few months ago and .ca stayed the same.

Based on non store sellers....

When a seller was with PP, for a domestic transaction they would pay 10% to ebay on the item price and shipping and pay ebay 2.9% on the total sale...fees, taxes and shipping. 

Now they pay 12+% to ebay on the item price, shipping and taxes.   That's true for both US and Canadian sellers. 

Does that help explain it or are you referring to something different?

[lotzofuniquegoodies]

@marnotom! 

@snoopwiz 

What was stated originally was "simpler" and "some sellers would see savings". Their words, not mine.

From the Canadian collection of announcements. Store vs Non-Store will also affect potential savings. In regular reads of  discussion posts on dot com, many have been finding  filing taxes much more complicated than it was in the past. From 3 sellersin Canada that I have been in contact with they've all basically said it is much more time consuming to make heads or tails of the current presentation of information. The words "extremely messy" were used.

Simplified fees

eBay charges an updated final value fee when your item sells. The final value fee consists of a category-based percentage of the total amount of the sale, plus a fixed fee per order, with no third-party payments processing fees. Most sellers can expect to see overall savings.*

What’s changed

 

eBay now manages the end-to-end selling experience for our marketplace. This means you no longer need a third-party payments processor, and there is no more separate payments processing fee. For most sellers, this means savings for their business.* It’s that simple.

*Savings based on annual total sales volumes, and comparisons of (a) prior eBay final value fees plus typical 3rd party payment provider fees, with (b) new eBay final value fees (without any 3rd party processing fees).

*Savings based on annual total sales volumes, and comparisons of (a) prior eBay final value fees plus typical 3rd party payment provider fees, with (b) new eBay final value fees (without any 3rd party processing fees).

Now, when it comes to payments, fees are more transparent and reconciliation is easier. The main thing to think about is your final value fee. The final value fee is a variable percentage of the total amount of the sale that varies by category (for sellers without an eBay Store subscription, this is 12.35% for most categories), plus a fixed $0.30 per order.

-Lotz