Fees for selling to US customers

[mrdutch1001]

please elaborate...what exactly is your question?

[dollargoose]

Sorry, new to the forum. I would like to figure out the fees I'm paying when selling to US based customers.

So for Canada if I sell a $3.99 item with free shipping and my buyer is in Ontario, it's $3.99 + 13% tax = $4.51 

I am charged a 12.9% ebay fee on that $4.51 plus $0.30 = $0.88

On $0.88 I pay whatever my provincial tax rate is (13% for me) so $0.12

Total fees = $1

Now when selling the same item to the US I added a $0.99 shipping fee and I get this: 

 

What your buyer paid

Item subtotal

C $3.99

Shipping

C $0.99

Sales tax*

C $0.51

Order total**

C $5.49

 Fee details page:

Fees based on

C $4.50

• Item price
  C $3.99
• Sales tax
  C $0.51
• Fees based on

  C $4.50

  My question is, how come the fee is based on $4.50 here? The item price is $3.99 and shipping is $0.99 so shouldn't it be: 

  $3.99 + 0.99 = $4.98 + applicable taxes (in this case it's going to chicago, IL so 10.25%?)

  $4.98 + 10.25% tax = $5.49 and 12.9% fees on $5.49? Why is the 12.9% fee based on $4.50? I am confused. Is eBay not charging me fees for the shipping because I have the listing set to free shipping in Canada or something? Any help would be greatly appreciated, thank you.

[marnotom!]

eBay assesses the lowest domestic shipping price you offer when calculating fees for sales outside of Canada.  As you offered free shipping within Canada for the item, the fee would be based on just the item price and the Chicago sales tax.

As an aside, Canada Post and USPS are getting pretty picky about merchandise being sent to the US as letters.  Your item may get returned to you.

[dollargoose]

Thank you very much for clearing that up for me. Is this information available anywhere? Because I only found 1 post talking about the shipping fees to the US and that was from 2017. Also, I don't really send anything heavy to the States but I will keep that in mind. It will suck if USPS cracks down on merchandise being sent via Lettermail cause I can't afford to pay the expensive parcel fees Canada Post charges.

[recped]

@dollargoose 

In addition to what @marnotom! posted there is also an extra .4% (International fee) for sales to the US or 1% to other countries.

Fees are detailed on this page:

https://www.ebay.ca/help/selling/fees-credits-invoices/selling-fees?id=4822

Note that fees in some categories are (usually) slightly higher but occasionally slightly lower. Also fees for sellers with a Store can be different (lower) that without a Store, again it varies by Category.

[dollargoose]

Oh ok I see the part in there now about being charged based on the cheapest domestic shipping. I had a look at that article before but I guess it was still confusing to me. And Yes I know about the international fee and how fees vary by category. Thank you for your help.

[dollargoose]

Couple of other things I was wondering about, does eBay collect sales tax from all US buyers? And do they collect on both item and shipping or does it vary? In my example above,  I'm assuming that the buyer paid tax on both the item and shipping cost, right? 

This is another thing I'm confused about as US tax rates are all over the place and I've read that some states collect tax on just sales and not shipping, or some don't even collect tax on Internet sales, etc.

Also, I don't know what US tax rate to assume when trying to calculate what price I should sell an item at. For Canada I just assume the highest tax rate which is 15% or whatever but it seems like the states has much lower taxes so I don't want to calculate too high of a figure when determining my profitability. 

 

[lotzofuniquegoodies]

---

@dollargoose wrote:

Sorry, new to the forum. I would like to figure out the fees I'm paying when selling to US based customers.

So for Canada if I sell a $3.99 item with free shipping and my buyer is in Ontario, it's $3.99 + 13% tax = $4.51 

I am charged a 12.9% ebay fee on that $4.51 plus $0.30 = $0.88

On $0.88 I pay whatever my provincial tax rate is (13% for me) so $0.12

Total fees = $1

Now when selling the same item to the US I added a $0.99 shipping fee and I get this: 

 

What your buyer paid

Item subtotal

C $3.99

Shipping

C $0.99

Sales tax*

C $0.51

Order total**

C $5.49

 Fee details page:

Fees based on

C $4.50

• Item price
  C $3.99
• Sales tax
  C $0.51
• Fees based on

  C $4.50

  My question is, how come the fee is based on $4.50 here? The item price is $3.99 and shipping is $0.99 so shouldn't it be: 

  $3.99 + 0.99 = $4.98 + applicable taxes (in this case it's going to chicago, IL so 10.25%?)

  $4.98 + 10.25% tax = $5.49 and 12.9% fees on $5.49? Why is the 12.9% fee based on $4.50? I am confused. Is eBay not charging me fees for the shipping because I have the listing set to free shipping in Canada or something? Any help would be greatly appreciated, thank you.

---

@dollargoose 

Here are 2 fee checkers you can test out.

https://www.ebayfeescalculator.com/ca-ebay-fee-calculator/

https://finalfeecalc.com/

Both work fine by me.

-Lotz

[flipistics]

---

@dollargoose wrote:

This is another thing I'm confused about as US tax rates are all over the place and I've read that some states collect tax on just sales and not shipping, or some don't even collect tax on Internet sales, etc.

 

---

It's worse than that. Some cities and counties also have additional taxes. You should probably just assume the same 15% as in Canada and (I think) you'll always come out ahead.

[mrdutch1001]

The buyer pays for shipping so if you are shipping to the USA be sure you are calculating adequate postal costs.

and BTW, it is specifically spelled out in the Canada Post guidelines that goods/merchandise DO NOT qualify as letter mail to destinations outside of Canada. Lettermail to USA & International destinations is exactly that> letters and documents. Batteries definitely DO NOT qualify as lettermail!  The postal systems have every right to return your packages if you attempt to send those types of goods/merchandise via lettermail to the USA.  Sure, it is up to you if you want to take the risks, but you best be prepared for any and all consequences.

[recped]

---

@dollargoose wrote:

Couple of other things I was wondering about, does eBay collect sales tax from all US buyers? And do they collect on both item and shipping or does it vary? In my example above,  I'm assuming that the buyer paid tax on both the item and shipping cost, right? 

This is another thing I'm confused about as US tax rates are all over the place and I've read that some states collect tax on just sales and not shipping, or some don't even collect tax on Internet sales, etc.

Also, I don't know what US tax rate to assume when trying to calculate what price I should sell an item at. For Canada I just assume the highest tax rate which is 15% or whatever but it seems like the states has much lower taxes so I don't want to calculate too high of a figure when determining my profitability. 

---

There are 4 US States which do not have a Sales Tax (5 technically if you include AK), there might still be one or two that do have Sales Tax but do not have a Marketplace Facilitator law in place.

Most States tax shipping, some don't, best to assume they all do. The highest rate is slightly over 10%, use an 8% average and you will be very close over time.

20 years ago you could know your potential fees to the penny most of the time. The complexity now makes that impossible, use estimates, err on the high side of course!

I looked at your listings, at your price points, do not overlook the impact of the 30 cent fixed transaction fee.

[regs43]

Just a note regarding the fees being based off the domestic shipping price. IF you issue an invoice to a US/INT customer that no longer applies, the fees will be based off the price you type in the shipping box. I feel like this is a glitch or something but I gave up calling about it and explaining to people at anchor support when I had that. I got a credit once after an hour and talking to the shipping specialist team, but I'm not calling everytime. The fee difference for me is usually about $0.75 or more in difference for a 10.00 sale. Something I have noticed over the years when people would ask for combined invoices on like 2+ cards. I now AVOID sending invoice and try and tell people go to the cart my shipping discounts all automated and you can pay that way.

[dollargoose]

These are good but I find they are slightly off for me. For example, the first calculator won't add a 12.9% fee for some reason, it's either like 12.2% or 13.2%. Still pretty good though to get a rough idea of what you'll make though. Thanks for sharing.

[dollargoose]

Yah I know, right? Taxes are a nightmare and there needs to be some kind of standardization applied. It's way too confusing for small businesses to comply with all these different tax laws. I'm going to keep an eye on my sales and see what rate I should assume over time, right now I'm assuming 10% and that seems to be fine as some states charge only like a 7-8% tax rate so hopefully that will make up for the ones that charge more.

[dollargoose]

I appreciate the feedback and I will take that into consideration. I'm guessing they don't want people sending merch via Lettermail in Canada either though right? I mean they really are killing an entire economy over here with the high shipping costs. Canada can be a major player in e-commerce if we had better shipping solutions.

[dollargoose]

Ok got it. Yah, I've been trying to run the numbers in a spreadsheet and it's hard to get exact figures for US shipping and fees. I will consider using the 8% rate you mentioned as a lot of states do charge somewhere close to that or lower. And I am aware of the $0.30 fixed fee as well but it seems like there's always something I'm missing lol. 

[dollargoose]

I haven't ran into this problem yet as I send via Lettermail and don't use invoices. Not sure if it applies to Lettermail but will keep that in mind.

[flipistics]

---

@dollargoose wrote:

I appreciate the feedback and I will take that into consideration. I'm guessing they don't want people sending merch via Lettermail in Canada either though right? I mean they really are killing an entire economy over here with the high shipping costs. Canada can be a major player in e-commerce if we had better shipping solutions.

---

You can absolutely send merchandise by lettermail in Canada, just not internationally. Make sure you read up on the size and weight requirements as well as what items you can't send (such as things that could hurt the machinery or workers) and what items require special hoops to jump through (like adult material).

[reallynicestamps]

It's way too confusing for small businesses to comply with all these different tax laws.

Which is why it is worthwhile paying eBay's service fee on the sales tax.

And remember there is a flat 30c non-refundable fee on every transaction.

Just a heads up, you are quickly going to learn that $3.99 with "free" shipping is not a profitable price point.

Free shipping is not free. It means we folded our shipping costs into our asking prices.

Which has lower fees?

A $4 with Free Shipping?

 A $3 with $1.00 Shipping?

I've found that the minimum I can charge profitably is $9.99.

Some things are not meant for mail order.