Calculation I made today gives this result for a $42.99 sale made by us on eBay. I provide everything in detail in case someone else can find any errors. I think all is 100% accurate. This formula may help you to quickly see if you will make a saving based on a single item. We have an eBay store that we pay $27.44 per month rent for. This rent is not included in the following calc, so we can be reliably assured only the fees are the focus. We pay standard Tier 2 eBay fees and standard Paypal fees based on eBay total monthly sales for March being AU $2,150.80. I'm using one eBay item sold price at $42.99 where the buyer used Paypal to pay.
eBAY ITEM SOLD PRICE: $42.99 including GST
CURRENT eBAY FEE (based on the single fee line item on our March Account Summary Invoice - 4.49/42.99=10.444%): $4.49 including GST
CURRENT PAYPAL FEE (based on the Paypal line item charge - 1.42/42.99=3.303%): $1.42 including GST
CURRENT FEE TOTAL: $5.91 which equates to 13.74738%
NEW MANAGED PAYMENTS FEE TOTAL: 11.3% x $42.99/100 + .33c = $5.18787 or $5.19 which equates to (5.19/42.99x100) 12.07258%
In summary;
CURRENT FEE: $5.91
NEW FEE: $5.19
SAVING: .72c = 1.67% SAVING
However, if the buyer chose to use fee-free PayID or Direct Bank Deposit:
CURRENT FEE: $4.49
NEW FEE: $5.19
ADDITIONAL COST: .70c = 1.63% COST
So, how long do you think it will take eBay to implement fee-free paying options within their Managed Payments' structure and rob us of the benefit? I believe this is the real motive for what we see here and this has put eBay on notice that should they implement PayID or Direct Bank Deposit options as a part of their Managed Payments, they must forward sellers an equivalent drop in FVF fees in the order of 1.6%, indicative of the above example, if a buyer uses a fee-free service to pay.
(c) Neil J Waddington
eBay, if you want to reuse this, or further promote it, then please contact me because it took me quite some time to work this out and we all know nothing is really ever for free on eBay is it? Secondly, this is only a personal indicator pertaining to our shop and sales and may not be the same for all sellers. All sellers need to check whether the above formula gives them a saving by substituting their own figures from their own respective eBay and Paypal statements.
Finally, the ACCC might be interested in this example because it highlights how current fee-free payment options make the Managed Payments procedure more costly, particular for buyers who will gain no benefit from being able to use fee-free payment options (we always provided extra product or discount to buyers who paid with PayID or Direct Bank Deposit). Managed Payments will make eBay prices loaded higher to account for non-fee-free payment options, contravening (if not directly but definitely in spirit) federal government laws in place to stop businesses from profiteering, loading prices up and/or hiding payment fees when the users of those services should be paying for them, not everyone, especially not those who choose to pay via a fee-free service.
