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Ebay Final Value Fee - WTF!!!
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92 posts in this topic

1 hour ago, NewWorldOrder said:

eBay whether I like it or not is saying to you all, since we are collecting and remitting the sales tax for you they want a fee.  Alternative is they dont and we all register with all the states in the USA that charge sales tax and go through that nightmare on our own.   Selling in a state with no sales tax with yield you a lower FVF, and vice versa with a state that has a high state sales tax like my state of CA.  

 

I don't believe that to be true. Each state has a minimum threshold for creating an economic nexus and requiring sales tax to be remitted. Small sellers are unlikely to meet those thresholds and not be required to pay sales tax. For Alabma (first on the list), the economic threshold is $250,000 for out of state sellers. If you don't sell $250,000 to Alabama residents, you do not pay sales tax. Some states have lower thresholds, some higher. Some have minimum transaction thresholds. If I sell outside eBay, I am not required to pay sales tax to Alabama because I do not have an economic nexus there.      

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5 hours ago, JollyComics said:

They send me the 1099 for only November and December after the transition of old PayPa/eBay partnership to full time eBay service.  It looks like that I may stay away from eBay this year.

Please do. More buyers for me.

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1 hour ago, Shrevvy said:

I don't believe that to be true. Each state has a minimum threshold for creating an economic nexus and requiring sales tax to be remitted. Small sellers are unlikely to meet those thresholds and not be required to pay sales tax. For Alabma (first on the list), the economic threshold is $250,000 for out of state sellers. If you don't sell $250,000 to Alabama residents, you do not pay sales tax. Some states have lower thresholds, some higher. Some have minimum transaction thresholds. If I sell outside eBay, I am not required to pay sales tax to Alabama because I do not have an economic nexus there.      

Yes I understand, but eBay just made a decision to collect for everything.  So yes if you buy on eBay one transaction they will charge you sales tax either way if your state has sales tax collection. More than likely it will go down for all transactions anyway in the coming years for all sales online.  USA wants their sales tax, and for the past 20 years we have been lucky we haven't paid it.  With ecommerce growing and physical stores declining we all should know this was going to happen eventually.   

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1 minute ago, Math Teacher said:

Please let me know how Ebay responds to your assertion.

There is no reason to assert anything to eBay. eBay sells much more than $250,000 into Alabama (for example). The alternative was to sell outside ebay and deal with filing for each state on your own. In doing so, I would be willing to guess that almost no one in this thread would file sales tax in any state except the one in which they reside. eBay collects sales tax because they are eBay. If it was pushed down to the sellers, most would not be required to file due to their size.

 

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21 minutes ago, Shrevvy said:

There is no reason to assert anything to eBay. eBay sells much more than $250,000 into Alabama (for example). The alternative was to sell outside ebay and deal with filing for each state on your own. In doing so, I would be willing to guess that almost no one in this thread would file sales tax in any state except the one in which they reside. eBay collects sales tax because they are eBay. If it was pushed down to the sellers, most would not be required to file due to their size.

 

Thank you for explaining this. All I know is that when I buy anything from Ebay, I pay 7% Iowa sales tax.

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10 hours ago, aszumilo said:

I'm waiting for E-Bay to start charging a buyer's premium.  Wouldn't surprise me at all.

They start those shenanigans and they will lose a bundle, but you're right inasmuch as it would be no surprise.

I've watched ebay's grasping greedy approach and disdain for their customer base grow almost year on year for the last 20 years or so. I still conduct business there but rarely as a seller. I still buy there but if they bring in a BP bullsquirt scenario...then I'm out. 

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1 hour ago, manetteska said:

Can someone confirm a couple things?

1. eBay originally charged X% fees against the Price of the item. 
The new rule is X-0.5% fees against the Price + Sales Tax of the item. 
2. what was the original X% in point 1?

 

I did some math of my own using the above calculation and Fee %'s of 12.85 (original) and 12.35 (new). So, if the above is incorrect, let me know, and I can adjust.

Per the above, the "break even" Sales Tax % to make Old Fees = New Fees is actually around 4.25%, and not 5%. So any sales Tax over 4.25%, the seller is giving more money in Fees to eBay than prior.

Also, based on an earlier suggestion, there is a non-trivial difference in fees based on the sold item's price.

A $100 item with 6% sales Tax will be $13.09 in Fees (versus $12.85 originally); a difference of $0.24 in ebay's pocket.

A $1000 item with 6% sales Tax will be $130.91 in Fees (versus $128.50 originally); a difference of $2.41 in ebay's pocket. 

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"Can someone confirm a couple things?

1. eBay originally charged X% fees against the Price of the item. 
The new rule is X-0.5% fees against the Price + Sales Tax of the item. 
2. what was the original X% in point 1?"

I don't know exactly, so this is just from memory.  The number that sticks in my head is 12.35%, which would include the 2.9% processing fee.  So the eBay FVF fee would have been 9.45% (?)

That's if you had a store when MP was introduced, based on the collectibles category.  Not all categories have the same fee rates.  Higher fees if you don't have a store.

When sales tax became a "thing", the eBay went down 0.5% to compensate.  I can't remember if that was before or after I was in MP, as sellers were phased in at different times.

From the eBay Help pages -

Standard Fees: https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4364

Store Selling Fees: https://www.ebay.com/help/selling/selling-fees/store-fees?id=4122

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11 minutes ago, Lightning55 said:

"Can someone confirm a couple things?

1. eBay originally charged X% fees against the Price of the item. 
The new rule is X-0.5% fees against the Price + Sales Tax of the item. 
2. what was the original X% in point 1?"

I don't know exactly, so this is just from memory.  The number that sticks in my head is 12.35%, which would include the 2.9% processing fee.  So the eBay FVF fee would have been 9.45% (?)

That's if you had a store when MP was introduced, based on the collectibles category.  Not all categories have the same fee rates.  Higher fees if you don't have a store.

When sales tax became a "thing", the eBay went down 0.5% to compensate.  I can't remember if that was before or after I was in MP, as sellers were phased in at different times.

From the eBay Help pages -

Standard Fees: https://www.ebay.com/help/selling/fees-credits-invoices/selling-fees?id=4364

Store Selling Fees: https://www.ebay.com/help/selling/selling-fees/store-fees?id=4122

I thought it was 10% eBay and 2.9% PayPal. For domestic that is, more for international or course.

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Your math looks correct except when calculating the "break even", you can't do it with the processing fee included.  It throws it off.  You have to get back down to the eBay FVF only, and then check the 0.5% compensation.

eBay charges the 2.9% part of the fee (processing) to include the sales tax, because every processor does.  Like if you had a merchant account, you pay your % based on the total, taxed or not.  PayPal charged on the total including tax.  Ebay would have had to calculate the the processing fee with sales tax (plus $.30 per transaction), remove the tax, charge their FVF, put the totals back together, etc.  That's why they just wanted to have a single fee.

Your example shows a higher fee mainly due to it being a 6% sale.  It will always be higher if over 5%, always lower if under 5%.

In my earlier post, I think the 12.35% I remember was AFTER the half percent discount, not before, because that would have pushed it under 12%, which I don't think would be correct.  So there's a good chance I have that in the wrong order.  The fees will also go down further if you are Top Rated Plus Status, which takes one tenth off the eBay FVF section.  In the following example, I am presuming the "old" ebay rate to be 9.95% (12.35-2.9+0.5=9.95)

A $100 item with 5% Sales Tax ($105 total) old way: FVF is $100 x .995 = $9.95.  Processing is $105 x 2.9%=$3.05+.30=$3.35.  Total charged is $13.30

A $100 item with 5% Sales Tax ($105 total) new way: Simplified Fee is $105 x .1235 = $12.97 + $.30 = $13.27

So at 5% Sales Tax, it is about even.

All that said, I just checked my most recent transaction.  It was for $49.85 plus $4.24 tax = $54.09.  I paid $5.70 plus $.30 for fees, a total of $6.00.  $6.00 divided by $54.09 is 11.09%.  I did get $.63 off for TRS+ status, or the total fee would have been 12.26%

I'm not sure those numbers match up to anything familiar, but I'll take the 11.09%

 

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