eBay "fee" structure question?

[KC13]

Very confused regarding my first sale on eBay with the new Payment fee structure.  If anyone can explain or clarify, it would be greatly appreciated.  Not getting to much help from the overseas call center... 

 

I sold a shoe bag for $101.00 and buyer is to pay a $3.99 giving me a sale total of $104.99.  Buyer pays $111.95 (item price, shipping cost and added sales tax).  

 

eBay fee structure is 12.35% and a $0.30 transaction fee.  

 

My below sale summary: 

Order Total                        $104.99

Fees                                    -$14.13 (should be $13.27 based off 12.35% of order total and $0.30 transaction fee?)

Net                                       $90.86

 

My "order total" is $104.99 and my fee is $14.13.  If you do the math, that "fee" is not based off the $104.99 total but rather the $111.95 total paid by the buyer.  

 

So in principal, they are charging me fees based on the total sale of $111.95 and not my order total of $104.99 giving me less "net" earning.  Yes, I know its a $0.86 difference but its the principal.  If they are gonna charge me a fee for the sale price paid by the buyer, then my order total should be $111.95 and I would like to net the additional $7 and some change.  

 

How does this make sense???  ARGHHH

 

- KC 

[brew4eagle]

10 minutes ago, KC13 said:

Very confused regarding my first sale on eBay with the new Payment fee structure.  If anyone can explain or clarify, it would be greatly appreciated.  Not getting to much help from the overseas call center... 

 

I sold a shoe bag for $101.00 and buyer is to pay a $3.99 giving me a sale total of $104.99.  Buyer pays $111.95 (item price, shipping cost and added sales tax).  

 

eBay fee structure is 12.35% and a $0.30 transaction fee.  

 

My below sale summary: 

Order Total                        $104.99

Fees                                    -$14.13 (should be $13.27 based off 12.35% of order total and $0.30 transaction fee?)

Net                                       $90.86

 

My "order total" is $104.99 and my fee is $14.13.  If you do the math, that "fee" is not based off the $104.99 total but rather the $111.95 total paid by the buyer.  

 

So in principal, they are charging me fees based on the total sale of $111.95 and not my order total of $104.99 giving me less "net" earning.  Yes, I know its a $0.86 difference but its the principal.  If they are gonna charge me a fee for the sale price paid by the buyer, then my order total should be $111.95 and I would like to net the additional $7 and some change.  

 

How does this make sense???  ARGHHH

 

- KC 

This has partially been the case for sometime now.  Back when PayPal was in play, they charged the 2.9% of the total cost paid by the buyer.

 

So, prior to the new arrangement, your PayPal fee would have been $3.55, and 10% ebay fee would have been $10.50 (10% of 104.99), so total fees of $14.05.  So real difference is only about $0.08.

[KC13]

38 minutes ago, brew4eagle said:

This has partially been the case for sometime now.  Back when PayPal was in play, they charged the 2.9% of the total cost paid by the buyer.

 

So, prior to the new arrangement, your PayPal fee would have been $3.55, and 10% ebay fee would have been $10.50 (10% of 104.99), so total fees of $14.05.  So real difference is only about $0.08.

 2.9% of $111.95 is $3.25.  Would of been $13.75 with eBay 10% on the $104.99... difference of $0.38.  

 

I guess my point is, I find it odd they structure there fees off the total cost of the buyer ($111.95) but deduct that fee from my $104.99 total.  Doing the math, its more than the 12.35% and $0.30 transaction fee.  I am being penalized financially for the taxes paid by the buyer.  Not sure how that works, doesn't seem right.  

 

- KC 

[brew4eagle]

5 minutes ago, KC13 said:

 2.9% of $111.95 is $3.25.  Would of been $13.75 with eBay 10% on the $104.99... difference of $0.38.  

 

I guess my point is, I find it odd they structure there fees off the total cost of the buyer ($111.95) but deduct that fee from my $104.99 total.  Doing the math, its more than the 12.35% and $0.30 transaction fee.  I am being penalized financially for the taxes paid by the buyer.  Not sure how that works, doesn't seem right.  

 

- KC 

PayPal fees are 2.9% plus $0.30, so $3.55

[KC13]

Just now, brew4eagle said:

PayPal fees are 2.9% plus $0.30, so $3.55

Ahhh, didn't know they charged the $0.30 transaction fee.  

 

- KC 

[brew4eagle]

I think PayPal and Ebay's justification is that they're doing us a service by collecting and remitting the sales tax, and the % is a cut of the total monetary transaction.  Basically the old format was 10% of the sale without tax, plus 2.9% of the sale including tax, plus $0.30.

Now it is a simpler calculation at 12.35% of the total sale plus $0.30, and ebay makes it SEEM like it's now less as the average joe will add 10% and 2.9% and think it was 12.9%, which SEEMS to be more than 12.35%.

Either way, the change is extremely minimal and sales tax is still being handled by the 3rd party, which I do appreciate. 

Edit- it is worth mentioning that the new structure can result in lower fees, it just doesn't always do so as a novice glance of the math would suggest

Edited February 26, 2021 by brew4eagle

[KC13]

27 minutes ago, brew4eagle said:

I think PayPal and Ebay's justification is that they're doing us a service by collecting and remitting the sales tax, and the % is a cut of the total monetary transaction.  Basically the old format was 10% of the sale without tax, plus 2.9% of the sale including tax, plus $0.30.

Now it is a simpler calculation at 12.35% of the total sale plus $0.30, and ebay makes it SEEM like it's now less as the average joe will add 10% and 2.9% and think it was 12.9%, which SEEMS to be more than 12.35%.

Either way, the change is extremely minimal and sales tax is still being handled by the 3rd party, which I do appreciate. 

 

eBay as a platform is responsible for collecting taxes, not the seller.  I do not own a business nor do I have a business license.  I am simply a average user and eBay charges it fee to facilitate my sale.  So while I agree to pay 12.35% and $0.30 transaction fee on the sale, I find it unethical to charge a final value fee that includes "taxes" collected from the seller and owed to the government.  I'd be interested to know if taking a "cut" of collected taxes is legal?  

 

- KC 

 

[llewol007]

Rip off. I’ve weaned off selling stuff on ebay because of that fact. And they seperated Paypal and them so that it doesn’t look like a monopoly on the whole thing. It is a final value so whatever the buyer sends over, you pay on. Just a rip off unless you have a store and get some sort of break. 

[brew4eagle]

6 minutes ago, KC13 said:

 

eBay as a platform is responsible for collecting taxes, not the seller.  I do not own a business nor do I have a business license.  I am simply a average user and eBay charges it fee to facilitate my sale.  So while I agree to pay 12.35% and $0.30 transaction fee on the sale, I find it unethical to charge a final value fee that includes "taxes" collected from the seller and owed to the government.  I'd be interested to know if taking a "cut" of collected taxes is legal?  

 

- KC 

 

I don't think it's that simple.  Just because you don't 'own a business' doesn't mean the irs sees it that way.  I don't own a business either but received a 1099-K for 2020 and I'm only scratching the surface of trying to understand the nuances.

[KC13]

42 minutes ago, brew4eagle said:

I don't think it's that simple.  Just because you don't 'own a business' doesn't mean the irs sees it that way.  I don't own a business either but received a 1099-K for 2020 and I'm only scratching the surface of trying to understand the nuances.

I hear you, just doesn’t seem ethical.  They have simply shuffled some numbers around to make it seem like you’re paying less in fees when in-fact, you are not.  They have taken PayPal’s model of total transaction value but applied to a much higher percentage therefore more money for eBay.  Pure greed, arghhh.  
 

I would bet the government accepts this as “OK” practice given they have a new source of generating revenue by having eBay collect and document sales on its platform that previously went undocumented.  
 

- KC 

[tungstenplug]

Credit card companies are the same way. Visa is charging your local store a processing fee based on the total amount the card swiped, not the just the item price. Businesses can deduct processing fees from the sales tax portion when they remit the tax they collected back to the state

Edited February 26, 2023 by tungstenplug