eBay Managed Payment Fees: Will They Be Higher?

so eBay has promised us that when we switch over to manage payments our fees are going to be lower but as we're gonna see in this video that's not actually always true what's up everyone paul here from dropshipping titans dot-com and we're gonna get right into the content here so if you appreciate that I would appreciate you giving this video a thumbs up so what we're going to do in this video is we are going to compare the existing fees or as I'm going to call them the old fees against the fees that eBay is going to charge us under manage payments we're in put them head-to-head in various different situations to see if what eBay is telling us is true if in fact the fees are going to be lower with managed payments so as it stands right now under the old fee structure this is what we have been paying every time we sell an item on eBay we get hit with a final value fee that's paid to eBay and that is usually about nine point one five percent and that's if you have a basic store or higher now that number does actually vary but in general for most items that you sell it's going to be nine point one five percent in addition to that PayPal also charges us fees they actually charge us two fees the first one is what I'm going to call the variable fee because it changes based on the price of the item so that's two point nine percent of the sale price and PayPal also charges a fixed fee of thirty cents per order so the customer orders multiple items from you on the same order it's still only thirty cents for that order now under manage payments we also are going to pay a final value fee now eBay has kind of gone all over the place with what they're going to charge us under their manage payment system and it's been kind of confusing for us sellers to keep up with these changes and keep up with how much is eBay really going to charge us but as of the making of this video they've said that the final value fee is going to be 11. 5% and they're also going to charge us 30 cents per order now in the past they said they're going to charge us 25 cents per item or per listing but now they've changed that it's 30 cents per order and that's it those are all the fees under the manage payment system now a couple of notes before we move forward obviously I'm ignoring here the insertion fees and that's because they're the same under the old fee structure and the manage payment system so it's complete wash and also as I mentioned before eBay has been like a complete mess in regard to how they are releasing information about manage payments and just how often they've changed all the different rules around manage payments and the different fee structures so for instance they'll send an email out to some people but not other people about changes to manage payments they'll update people inside the seller forums but not everyone uses those forums and sometimes they give updates in YouTube videos or at Facebook lives that some people don't watch either so it's very confusing to piece it all together that's why I'm here for you guys to find all this information out do the research for you and to update you guys on what's going on so if you want to make sure that you're always on top of all the updates make sure to subscribe to the channel but as of the making of this video this is where eBay currently stands of course that could always change tomorrow next week or and before manage payments really takes over for most sellers okay let's get back to the numbers now with an example so let's say we have a $100 item in other words we sell it on eBay for exactly $100 and we have free shipping and there's no sales tax so the customer is really paying $100 what are the fees going to be under the old system versus the manege payment system under the old fee structure we have a final value fee of nine dollars and fifteen cents we have a PayPal fee of two dollars and ninety cents plus that thirty cents for a total fee of $12 and thirty five cents under manage payments final value fee $11. 50 fixed fee thirty cents total fee is $11. 80 which makes a winner in this example the managed payment system exactly like eBay said the fees would be lower and in this case they are right but wait what happens if the customer asks for a refund or in other words if the customer returns the item and then you need to do a refund how does that change things well let's look at that so same exact scenario but this time what fees are going to be

returned to us so under the old structure eBay would return that nine dollars and fifteen cents so we would get that back but PayPal would not return their money or aren't that money to you so they would keep the $2. 90 30 cents which makes a total fee for us three dollars and 20 cents and we didn't even make a sale any money on that sale now under manage payments eBay has promised us they've told us that they are going to return the final value fee which means that we would get the $11. 50 back we would not get back to 30 cents which means that the total fee to sell an item to a customer and then to accept a return would only be 30 cents which again makes the winner here managed payments so you might be thinking now eBay wasn't lying right eBay has shown told us manage payments will be cheaper and in both those examples we saw yeah they're right but wait what happens if the customer has to pay sales tax because that does change the numbers as well so let's use an example let's say there's a $100 item that's how much you have it listed for an eBay and a customer in Tennessee purchases it purchases the item from you so that item is going to ship into Tennessee this is what happens the customer not you the customer on eBay is going to pay sales tax now in Tennessee that number is about nine dollars and 53 cents worth of sales tax and it's one of the highest in the nations in Tennessee which is why I'm using it for this example so the total before tax is $100 and the total after tax is 109 dollars and 53 cents it's very important that you keep these two numbers in mind 100 and 109 53 you'll see why that distinction is really important in a moment all right let's get back to this chart under the old fee structure on eBay is charging us a final value fee based on the price of the item before sales tax so it's based on $100 which again leaves it at nine dollars and 15 cents no change there but PayPal charges us a fee based on what it is with the sales tax so they are charging us a fine our fee based on 109 53 so that bumps up the paypal fee to three dollars and 18 cents and obviously the dirty cents doesn't change which makes a total fee twelve dollars and 63 cents under managed payments eBay has told us that the final value fee will be after-tax so they're not going to charge us a final value fee of 11. 5 percent on the $100 they're charging us 109 53 which in the case of Tennessee where their sales tax is really high makes a big difference so we would pay a final value fee of $12 and 60 cents plus the 30 cents which makes a total twelve dollars and ninety cents which makes the winner in this example the old fee structure so this is why I said in the beginning of a video that eBay their fees are not always going to be lower under the managed payments now this is obviously a more extreme example right because Tennessee has really high sales tax what about average sales tax so the average if you take all the different sales tax rates across the country averaged them together I think it's about five point zero nine percent is the number that we came up with so in this example again with $100 item $100 pre-tax 105 90 with tax so if we quickly run through that under the old fee structure because again final value fee is pre-tax still going to be nine dollars and 15 cents with the paypal fee that will be based on after-tax so that's gonna be three dollars and seven cents plus 30 cents total fee is twelve dollars and 52 cents under managed payments again final value fee is on the amount with sales tax included so that would be twelve dollars and 18 cents and fees plus 30 cents total fee is 12 48 which makes a winner here manage payments and of course in that last example if there is a refund then manage payments wins out even more so there you go that's my analysis of the old fee structure versus the new managed payment fee structure and personally I'm pretty happy with the results I think in most situations we are going to be paying less under managed payments it's just in kind of those extreme situations when there's going to be a really high amount of

sales tax in those situations it would have been cheaper under the old plan but I don't think that's going to happen that often and especially when you throw in that eBay has promised us that they are going to continue to refund the full final value fee after a return or refund happens manage payment wins hands down now if I Bay backtracks on that promise or says you know what we're not gonna return the full final value fee that will definitely change the numbers as well that's something eBay might do you know it's not outside the realm of things that we've seen from eBay even though they said that this is it the fees that I mentioned are the final ones no they're always a subject to change when it comes to eBay now it may not look like it guys but this video actually took a lot of work because finding out all this information you know the fee structure what will be returned what won't be returned whether it be pre-tax or after-tax like I said in the beginning it was very difficult because the information was scattered everywhere and had to piece it all together and make sure that the information hadn't been updated or changed by eBay so if you appreciate me doing this I would really appreciate it if you guys gave the video a thumbs up let me know in the comments section that you enjoy the video that you found it helpful and consider subscribing to the channel for more updates on eBay and their managed payment system thanks so much for watching guys and I'll see you in the next video hey thanks so much for watching the video if you want to subscribe to the channel you can do that by clicking right here and then I have two videos for you to check out click on one of those and I'll see you over in that video in just a few seconds