New PL Standard Fee Calculation

[kawartha-ephemera]

This new method of calculating PL Standard fees is a stupid move. Someone with the fee police should really have another look at this, do they really expect sellers will continue running campaigns at their current rates? I don't think so. How do they expect a seller to deal with the huge variability in shipping and taxes worldwide? If their aim is to discourage international sales this change is a winner. Stupid.

[ypdc_dennis]

How much does Promoted Listings Standard cost? 

A Promoted Listings Standard fee is charged based on the ad rate selected by the seller.

Ad rate is the percentage of an item’s final sale price (excluding shipping and taxes), and is only charged when a buyer clicks on the promoted listing and purchases the promoted item within 30 days of that click. The fee is based on the ad rate that was in effect when the promoted listing was last clicked.

https://pages.ebay.ca/seller-centre/listing-and-marketing/promoted-listings.html#m22_tb_a1__2

Has this changed?

[cottagewoman]

Yes this will change in March. It will now be calculated on the order total - the same as FVF. This is punishment for any sellers using calculated shipping, and IMO a GMV increase move. As well we're held hostage with PL since eBay 'rewards' sellers who use it by giving their listings more visibility - it's now so baked into the platform. I for one just moved my PL campaign back to a low flat rate instead of variable market rates with a cap. With the constant shipping cost increases, my 15-30$ items weighing over a pound will see an increase of 40 percent or more in PL fees. Have to get that under control.

[marnotom!]

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@ypdc_dennis wrote:

Has this changed?

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https://pages.ebay.ca/seller-centre/news/seller-updates/2022-winter/financials.html

[cottagewoman]

Actually GMV isn't applicable here - it's an issue of revenue, of which eBay has made very clear in its financial communications are now being grown by advertising revenue. As the platform is mature and has competition, it's inevitable for growth to find other revenue streams that are available with no significant effort or cost. Reminds me of playing sim city ages ago - you start out with growing your city, attracting people to move to it, and then once it gets big enough start adding taxes to everything and putting in parking meters.

[kawartha-ephemera]

Currently we know what the fee will be if sold via PL Std, this will not be the case after Mar 30.

Example 1. PL STD campaign in place @ 5%.
I sell a $20 item in Canada, the buyer pays $20 S/H plus 0 sales tax. Total transaction value is $40. $40 x 5% = $2.00 PL fee.

Example 2. PL STD campaign in place @ 5%.
I sell the same $20 item to the U.K., the buyer pays $40 S/H and also $12 in VAT. Total transaction value is now $72.
$72 x 5% = $3.60 PL fee.

As is obvious, the change introduces tremendous variability in cost, one might begin to question if sales outside North America will be sales worth having.

[marnotom!]

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@kawartha-ephemera wrote:

Currently we know what the fee will be if sold via PL Std, this will not be the case after Mar 30.

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Where do you get the March 30 date from?  The page I found and the screenshot I took shows a different date.

[femmefan1946]

one might begin to question if sales outside North America will be sales worth having.

Or if PL is worth having at all.

Or if PL should only be used at the lowest possible rate (1%).

Someone did not work out the Unintended Consequences.

[recped]

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@kawartha-ephemera wrote:

Currently we know what the fee will be if sold via PL Std, this will not be the case after Mar 30.

Example 1. PL STD campaign in place @ 5%.
I sell a $20 item in Canada, the buyer pays $20 S/H plus 0 sales tax. Total transaction value is $40. $40 x 5% = $2.00 PL fee.

Example 2. PL STD campaign in place @ 5%.
I sell the same $20 item to the U.K., the buyer pays $40 S/H and also $12 in VAT. Total transaction value is now $72.
$72 x 5% = $3.60 PL fee.

As is obvious, the change introduces tremendous variability in cost, one might begin to question if sales outside North America will be sales worth having.

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FVFs for International sales use a Base Amount using your lowest DOMESTIC shipping rate not the amount the buyer pays for shipping.

In the announcement it states that the calculation for PL fees will be the same as it is for regular FVFs which for an International order are NOT based on what the buyer pays.

The only variation that is unknown at time of listing is the tax amount paid by the buyer.

In your example #2 the base would be $52, PL fee $2.60

In your example #1 if the seller collects GST/HST and the sale was to Ontario the base would be $45.20, the PL fee $2.26 and in a similar vein the seller won't know the exact fee amount until they know which Province they are shipping to.

For non-GST registred seller who pay unrecoupable amounts of tax when they buy (domestic) postage they already face this situation on non PL sales because you don't know upfront what the tax rate will be. It could be 5% or it could be 15%

If 5% is the actual PL rate you normally use just reduce it to 3 or 4 % and your PL fees won't be changing much at all.

In my opinion anyone using the "suggested rates" is being suckered.

I get a huge increase in PL impressions just using 1%. (note: I rarely use PL and when I do it's only on historical non-sellers).

[kawartha-ephemera]

Thanks, it seems ebay speak got me on this one. They didn't explicitly state within their short announcement blurb that was the case, had to follow that "here" link to wholly understand what they were saying. Still feel it's ridiculous to charge PL fees on European VAT.

Ebay text on the matter.
Specifically, the ad fee will be calculated in all markets based on the total amount of the sale for each attributed sale, using the same basis we use to calculate final value fees (including applicable taxes, shipping and other applicable fees described here). Currently, in certain markets including Canada and the US, the Promoted Listings Standard ad rate applies only to the final price of the item.