Ebay Managed Payments

Posted by

You’ll have a hard time finding any sellers on Ebay that have anything good to say about Ebay’s new Managed Payments system. It is their replacement for PayPal, a payment processing company that they sold off in 2015. It took 4 years for Ebay to come up with a new payment processing system. During the past year, they have been slowly migrating sellers to the new system. This past week it was my turn to make the move. You basically put in your bank account information so that they can bypass PayPal. Buyers can still use PayPal to make a purchase, but sellers can not use PayPal for processing payments anymore. As of 2020, PayPal charges 2.9% + $0.30 for each transaction. Ebay’s new system charges 12.35% + $0.30 for each transaction. The additional 9.45% is for Ebay’s Final Value Fee, which is now incorporated into their Managed Payment system. The biggest gripe from sellers is that the 12.35% is coming out of the total amount that a buyer pays for the item. This includes the shipping fee and any State sales taxes that Ebay collects. Sellers feel that it is unfair to have to pay a percentage of the shipping and sales tax. On some transactions, you can actually lose money. Or, make such a low profit, that running a resale business on Ebay is not worth your effort. This past year they introduced ad fees, which can give a listing a higher placement in search results. This is another way for Ebay to get more money from sellers. The ad fee is a percentage of the final value of the item you are selling. For example, if you sell an item for $10 with free shipping, and an ad fee of 6%, and sales tax of 8%, the amount you get would be (($10 + $0.80 tax) – (18.35%)-$0.30) = $8.52 – $3.40 shipping = $5.12 net. Assuming you acquired the item at a 50% discount, you would make $0.12 profit on the item. This doesn’t include your listing, packaging, and labeling cost. Basically, you are losing money as a seller, in this example. Unless you can source your stock for below 50% value, all of your profit will be going to Ebay.

Leave a Reply