High Volume Seller DetroitAxle talks eBay Managed Payments savings

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So far, we’ve only heard from relatively small sellers who have opted in to the eBay Managed Payments trials currently taking place in the US. Now, eBay have published a video for a larger seller, Mike Musheinish from DetroitAxle so his comments are particularly interesting concerning eBay Managed Payments savings.

DetroitAxle have a consistent run rate of sales way generating well over 5,000 feedback a month. We estimate their number of transactions to be in excess of 30,000 sales per month on eBay with an average selling price in the region of $75 to $100.00 generated from over 11,000 listings. 30,000 sales a month and a $0.30 fee for each PayPal payment adds up to some $9,000 a month in immediate savings assuming that the percentage fee charged remains the same.

DetroitAxle talks eBay Managed Payments savings

Mike focusses on the per transaction savings from not paying a fixed fee per transaction to PayPal of $0.30 (£0.20 for UK sellers). eBay Managed Payments don’t have a fixed per transaction fee but are purely based on a percentage of the total selling price (including shipping and taxes). eBay’s published fee rate for eBay Managed Payments is 2.7% with PayPal rates of 2.9% + $0.30 per transaction.

What UK merchants are still waiting to hear is what will happen to those on the higher tiers of PayPal Merchant Rates. If you’re a low volume seller paying 3.4% plus 20p per transaction than eBay Managed Payment fees of 2.7% and no per transaction charge are attractive. If you’re on 1.9% or even a lower 1.4% PayPal Merchant rate then 2.7% represents a large increase, especially if your average selling price is high making the fixed 20p less relevant compared to the overall fee.

eBay Managed Payments are still a long way off arriving in the UK and on balance eBay’s 2.7% rate is actually attractive, much as those on higher PayPal Merchant Rate tiers will disagree with. Adyen, eBay’s chosen provider, also powers payments on Etsy and on that marketplace fees vary by country from 3% to 4.4% plus a fixed per transaction fee. PayPal fees also vary by country so we’ll have to wait until eBay announce what potential eBay Managed Payments savings may be available for the UK and if they’re on a par with rates available from PayPal.

9 Responses

  1. “adds up to some $9,000 a month in immediate savings assuming that the percentage fee charged remains the same.”

    Why on earth would anyone make such a ludicrous assumption?
    Gold is cheaper than lead, if you assume that gold is free.
    Why would you? Why? it makes no sense at all to assume that!

    if you assume something more sensible, that someone pulling in circa $3 milloin per month, according to your figures, would be on the 1.4% rate with paypal (or should be if he has any sense at all), and his costs have actually gone up by $40,000 per month.

    Yeah let’s celebrate losing $40,000 to save yourself $9,000 every month.

    I’m worried that Mike from DetroitAxle genuinely believes he’s saving money.

    And why are you trying to pass this off as a benefit to us?

    methinks the backhanders from ebay are strong with this article.
    maybe they can use extra $31,000 they’re taking off mike every month, offer him $2,000 to do the video, and watch his naive little eyes light up.

  2. I am getting a bit tired of hearing about the 2.7% “special” rate. Surely anybody with a hint of business nounce who has a high turnover would be on the 1.4% paypal rate.

    I am waiting to see how ebay sell this one to us, as and when the time comes.

    There must be a lot of high volume sellers on the 1.4% rate that are worried about the looming increase in fees.

  3. One of the clear benefits to sellers of eBay Payments will be a more reliable payment schedule, as eBay pointed out when first made an announcement. PayPal seem to be finding PayPal loans and Working Capital by seizing funds for up to six months for the most spurious reasons – such a spike in sales.

    Type PayPal into YouTube and about the third entry down, there is a video of a young woman relating a horror story of how PayPal seized her funds, leaving her deep into the red with her bank (as she went way over her overdraft to honour her customer orders) and initially told her they would keep the money for six months. I, too, have experienced such tactics from this “bank”

  4. Seems like maths is not a strong point at tamebay. Unless this guy has a rate well under 2.7%, he’s losing a stack of cash.

  5. I think those sellers who have seen their businesses devasted by Paypal’s arbitrary seizures will be delighted to get back to selling on eBay. PayPal have seemingly changed their businesss model and seek to make their profits via loans – hence them seizing funds for the flimsiest of reasons.

    Ebay seller’s were ripe for this kind of confiscation, but in due course this reservoir of money will dry up when Ayden take over payments.

    This is good news. Well done, eBay. No looking back.

  6. I hear what you are saying, Jonah, but that “credit” is coming from people like me who to literally had to immediately stop selling.

    Twice PayPal did this to me and I begged and pleaded to no avail. I could not pay my mother’s care home fees any more and had to bring her home. We survive on her small pension. Before this, at one point I employed two people. I sold on eBay, and had a PayPal account for 15 years this happened. Payments held for six months both times finished me off. In the meantime you have to honour customer orders, whilst having no money. I can’t risk it again.

    PayPal are unfeeling and ruthless. They can see that the payment market is now crowded so the have tried to diversify in this highly immoral way.

    I am sure it will their undoing. Eventually.


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