Diving into the new managed payment fees

[mickdog]

I’m spending some time today looking at the new managed payments program. Definitely some interesting finds (at least to me, but warning long post with numbers ahead). For reference:

Overview of managed payments program: https://www.ebay.com/sh/fin/dlp

This the link that you get in that email that is requesting you preregister for managed payments.

Nugget of interest: The fees you pay will be final value fee + 30 cents! That seems great. Especially for pricer items. But…. the final value fees have gone up!! It also has a link to the new fees.

New Managed Payment Fees: https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4822#

In addition to the higher final value fees, there are three other new fees listed here. I know they are new because they don’t show up in our current fee agreement here: https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4364#

Those fees are (copied from page, my comments in {}):

Dispute fee
If you are found responsible for a disputed amount as per eBay policies (e.g., chargeback), we charge a $20.00 dispute fee, excluding sales tax, for each dispute. {Doesn’t PayPal have a fee like that now? If so this isn’t too different}

International fee
If your registered address is in the US, we charge an International fee if either the buyer’s registered address or the delivery address for the item is located outside of the US. This fee is calculated as 1.65% of the total amount of the sale and is automatically deducted from your sales.

If your registered address is not in the US, please refer to the fee page for your country of residence for your International fee information.
{This is new and is basically a way to pay for the Global Shipping Program? Personally this doesn’t bug me too much as I love the convience of GSP}

Seller currency conversion charge
If your registered address is in the US, when a buyer purchases your item in a currency other than your payout currency, eBay will convert the funds to your payout currency using a “transaction exchange rate” we set for the currency exchange. The transaction exchange rate is adjusted regularly and includes a currency conversion charge of 3% applied on a base exchange rate. The base exchange rate is based on rates within the wholesale currency markets on the conversion day or the prior business day; or, if required by law or regulation, set at the relevant government reference rate(s). The currency conversion charge will be automatically deducted from your sales.

If your registered address is not in the US, please refer to the fee page for your country of residence for your Seller currency conversion charge information.

{This sucks, especially on expensive items. This will definitely make it more expensive than PayPal to sell internationally}

So I pulled a few sales from the last month to do some comparisons. Not including store discounts or Top rated seller discounts. If interested read on:

A Cheap sale domestic:

Sew-on Patch sold for $14.89 (price plus paid shipping)
PayPal fees 73 cents eBay would be 30 cents savings of 43 cents!
but old ebay final value fee was 10% or $1.49 so I paid $2.22 ($1.49 +.73)
new ebay final value fee is 12.35% or $1.84 so I will pay $2.14 ($1.84 + .30) so I really only save 8 cents. But that is better than nothing!

More expensive sale domestic:

Tabletop Air purifier sold for $132.55 (price plus shipping and taxes)
PayPal fees $4.14 eBay would be 30 cents savings of $3.84! Nice, but….
old ebay final value fee is $13.26 + $4.14 = $17.40 total compared to
new ebay final value fee of $16.37 +.30 = $16.67 so I really only saved 73 cents but hey that adds up!

A cheap sale international

Latch Hook Rug Kit to Austrailia sold for $40.68 total
PayPal fees $2.09, ebay will be 30 cents but
old ebay final value fee is $4.07 + $2.09 = total is $6.16
new ebay final value fee is $5.02 + +.30 + Int fee(1.65%) .67 + seller currency conversion charge (3%) 1.22 = $7.21 so it now costs $1.05 more to ship that item

Expensive sale international

Art photography book to Austrailia sold for $193.71 total
PayPal fees $8.82, ebay will be 30 cents but
old ebay final value fee is (12% on books) $23.25 + $8.82 = $32.07
new ebay final value fee is (14% on books) $27.12 + .30 + int fee(1.65%) 3.20 + currency conversion (3%) 5.81 = $36.43 so it now costs $4.36 more to ship that item.

So if I understand these new fees correctly and did my math right the bottom line is:

We will definitely save money on domestic sales somewhere in the pennies to a $1 or so per transaction and that will be great.

But if you sell alot on GSP (or privately international) you will be paying dollars more per tranaction.

I’d love to get feedback on whether I’m reading all this correctly or if some people who are already using the new system can comment on the fees (especially international now that it appears it works with it).

[MyCottage]

I think the new ebay FVFs were decided before states started charging Sales Tax. If I’m not mistaken, most, of not all, of the “savings” vanishes with the sales tax.

Let me explain, and let me know if I’m wrong:

Currently, PP charges 2.9% on total price (including sales tax). Plus PP charges the 30 cent transaction charge, which we’ll just skip, since both MPs and PP charge it, it’s basically a wash.

Currently, ebay’s FVF does not apply to sales tax.

So, a very simple example:

Antique item sells for $10 with free shipping. PA sales tax of 6% applies.

Antique FVF is 9.15% on $10.00 , so 91 or 92 cents, depending on whether round down or round up.
PP applies to the $10.00 plus the 60 cent sales tax, so 2.9% on 10.60 = .30.

Total fees (ebay 91/92 cents, PP 30 cents) = 1.21 or 22, depending on how you round

Now, with MPs, ebay will be charging the FVF on the total, including sales tax. The new FVF for Antiques will be 11.5%.

11.5% x 10.60 = 1.21 or 22, depending on how you round.

Savings? Where?

I haven’t tried this using different sales tax rates, but I think if sales tax is involved, any savings is either lowered or vanishes. When I have time, I’ll try plugging in some other numbers.

Or am I missing something here?

(I should add, if the transaction has no sales tax, I assume there would be a savings. But as more and more states add sales tax, there will be fewer and fewer such transactions.)

[MyCottage]

OK, in my above example, if there was no sales tax, I think seller would save about 6 cents ($1.21 now , and $1.15 with MP)

[mickdog]

I actually assumed that the FVF was put on sales tax also. My calculations include it, so that is a source of error but one across all scenarios so my results probably still hold.

But I think both of our analysis shows that the savings will be quite small, and in some cases (sellers with high dollar international sales) the savings may be nil or actually cost more.

[debitendcredits]

I see that adult items can’t be sold through managed payments. I sell vintage 8mm film loops (which most definitely belong in the adults only category). Can a seller use managed payments for approved items and stock with PayPal for items that no longer permitted?

The Q&A section is very unclear on this point.

Very strange that Ebay will continue a person to list in adults only, and they penalize them for it.

[Jay]

I honestly just hope Managed Payments is bug free and doesnt cost any more. I’m a simple man.

[MyCottage]

Jay, I’m with you. This should simplify bookkeeping, and as long as the cost remains about the same, I’m happy. I figure on some sales I may pay more than the old way, on others less. Hopefully it will all balance out pretty well.

I do think it might help increase incremental sales because buyers will have more payment options….I’m sure there are people who would prefer ApplePay to PayPal, and now they’ll be able to buy on ebay.

MPs is definitely not a deal breaker for me.

[mickdog]

Mycottage basically said what I was going to say. Even if it cost a tad more, but decreased barriers to entry for new users, that would probably increase all of our sales in the long run, which I see as a net positive.

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