Following on from our earlier article where we argued that eBay Managed Payment fees may be higher for large merchants than current PayPal fees, we’d like to draw your attention to the eBay Managed Payment fees calculator that eBay have published.
The calculator aims to give a payment processing fee comparison and whilst it doesn’t specifically mention PayPal, we all know that the vast majority of payments on eBay are via PayPal. eBay are keen to demonstrate that for most merchants fees will be lower with eBay Managed Payments than with PayPal.
eBay Managed Payment fees calculator for low volume merchants
As an example, if you take eBay’s published rate of 2.7% as the eBay Managed Payment Fee (we don’t know if this is the promised introductory rate and if it may increase in the future) and enter zero as a per transaction fee and 3.4% plus 20p as your current PayPal rate, then for an average selling price of £30 eBay say that you’ll save 41p per transaction.
Normally your PayPal fee would be 3.4% of £30 plus 20p or £1.22. With eBay Managed Payment fees of 2.7% your fee will be 81p
eBay Managed Payment fees calculator for high volume merchants
Now change the PayPal rate to 1.9% for a larger seller and eBay don’t display any saving (because there isn’t one, it’ll cost you more) and instead display a message stating “If you have been invited to managed payments and have questions on rates please contact us.” We suspect that eBay are only intending to invite sellers to take part in eBay Managed Payments if they would currently save money on fees.
This is because eBay doesn’t yet want to tell you that normally your PayPal fee would be 1.9% of £30 plus 20p or 77p but with eBay Managed Payment fees of 2.7% you’ll end up paying 81p. Those on 1.9% PayPal business rates will end up paying around 5% higher fees when they move to 2.7% eBay Managed Payment fees. For higher value transactions, due to the fixed 20p charge, the percentage cost of eBay Managed Payment fees will be even greater.
Use the eBay Managed Payment fees calculator
You’ll find the eBay Managed Payment fees calculator on the eBay site and will be able to run the calculations for your own average selling prices. Every time eBay fail to display the saving that means your payment processing fees will go up under eBay Managed Payments.
Will this be the final fee schedule for eBay Managed Payments?
In fairness to eBay we have to point out that we don’t know the final fee structure that they will offer. All we know is that they have stated that ‘most’ merchants will see lower fees. Here on Tamebay we’re interested in the merchants who will see higher fees as they are the ones with the most to lose.
We also don’t know if the 2.7% fee will remain for all merchants or if that is the promised introductory rate and actual fees for merchants will be higher.
30 Responses
I sell high volumes of low price items, average sales price below £10.00 , I’ve always thought their 20p per item fee is fair to high, (I know they do micropayments), especially now that Amazon don’t have a minimum order fee, also it doesn’t anywhere near 20p to process a transaction, especially when looking at Paypal volumes!!!!,.
If eventually it settles so the fees are 2.7% and there is no per transaction fee, then it won’t all be doom and gloom.
Even if you are on a paypal rate of 2.4%, 1.9%, or 1.4%, you might actually be better off on the ebay managed payment rates, depending on the average value of your sales. I think it works out like this:
2.4% + 20p on PayPal and sales of up to £64 = better on ebay managed payments
1.9% + 20p on PayPal and sales of up to £24 = better on ebay managed payments
1.4% + 20p on PayPal and sales of up to £14 = better on ebay managed payments
I think that will cover more sellers than we thought.
Not good for us. It would have added over £1000 fees for the last year on our bill :/
So why can’t ebay just have a tiered system as well? Surely it isn’t rocket science? We are on the 1.9% rate… a high proportion of our sales are sub £25…. howver we have a ever increasing amount of sales that are £100 to 400… So the increased costs to these will quickly mount up and wipe out any saving from the lower cost ones. Esp as we are moving in the higher value area as less competition and better margins.
A one size fits all approach is rarely the best one and this may come back and bite ebay in the rear! Of course what will happen is people will put up prices, ebay will then take a higher fee amount and so once again ebay will be trying to disguise the drop in revenue on the back of customers who will soon start looking elsewhere…
The short sightedness of it all is quite literally mind blowing!
Same for us Toby. 1.9% rate, average sale value is over £25.
As seems to regularly be the case, the benefits are going to the private sellers, the business sellers masquerading as private sellers, and low value business sellers. The larger sellers will already be on a special deal one imagines, which leaves those in the middle facing yet more cost.
I am waiting for E-Bay’s 3rd quarter results with interest, if their share price performance this last week is an indicator of what is to come, all is not rosy in the garden. What that is going to mean for sellers though, is anyone’s guess.
We currently get the 1.4%+20p rate so the increase is quite significant. It will be interesting to see what rate we are offered when the time comes and how it will be sold to us as a “good move”. So far when I have made inquiries with UK customer support about the potential future increase in costs for us, they don’t seem to be that knowledgeable about it and can’t give me a straight answer.
I’m currently on micropayments, I can’t see how any scheme will be cheaper or the same for me.
I don’t believe there won’t be a transaction fee either.
and don’t forget, that the fees will absolutely, without a shadow of a doubt, creep up and up and up as time goes on. All rises cloaked in ‘this change is going to make things better’ rubbish.
@ Leon, yes but i think thats called inflation.
Man, they are so dodgy.
I don’t understand why anyone is expecting the new payment fees to be lower.
Ebay has never said they would be cheaper for sellers.
All they’ve talked about is vague “benefits” for sellers.
That could mean anything.
You could take a couple of minor things and dress those up as “benefits”
Ebay is doing this to make money for Ebay.
Not for sellers.
A few sellers might see a small drop in fees, but this would only be temporary.
Once the system is bedded in and Paypal is fully excluded, then stand back and watch the fees ramp up.
we dont understand what all the hoo ha is about
every business should do all they can to maximise profit
I’ve just payed ebay £300 for advertising a motor bike it was on eBay for a month and didn’t sell I thourght this was decusting I will never use eBay again so be carfull if you use eBay I was really gutted. I phoned them up I was told I had to pay this amount
Putting aside any changes in fees ( which by the looks of things will total quite a bit higher), a managed payments system you would think should be far more secure than having a separate paypal payments system.