High-end antiques and vintage shopping site Ruby Lane is instituting a new fee that buyers will have to pay above and beyond the product price, sales tax, and shipping cost. One seller called the new buyer service fee of 2.95% “outrageous” and “unheard of”; another said they were worried the new fee would upset buyers and have a negative impact on sales.
Ruby Lane is also raising selling fees and is instituting a new seller service fee of 3.75% of the item totals and shipping and handling.
The new buyer service fee went into effect on November 14th, and the selling fee increases take effect on January 1, 2020.
A seller forwarded the following notification they received from Ruby Lane:
Dear Shop Owner,
Early last month we informed you about new laws that are requiring Ruby Lane to collect and remit state sales tax on behalf of our sellers.
We now are fully integrated with our third-party tax compliance company Avalara and ready to begin collecting state Sales Tax on your behalf in those states where we have an obligation to do so.
Sales Tax and Service Fee starting Thursday, November 14th
Beginning on Thursday, November 14th, 2019 Ruby Lane is going to add the required by law state sales/use tax to all purchase orders based on the buyer’s shipping address. A list of states where we are handling sales tax for you is maintained in our FAQ.
In addition, to help offset some of the cost of collecting, reporting, managing and remitting sales tax to 37 states we are currently required to collect sales tax for, buyers are going to be charged a 2.95% Service Fee, rounded up to the nearest 25 cents, at the time of purchase. We know the concept of charging buyers a service fee for marketplaces such as ours is relatively new, but this is a common practice in the auction world with Buyer Premiums, and in many other online spaces applying a service fee.
Collecting Sales Tax and Service Fees from You
For all orders, the Sales Tax and Service Fee is going to be remitted to you as a part of the buyer’s payment, for any way you accept payment. Ruby Lane then deducts the same Sales Tax and Service Fee amounts, plus starting January 1, 2020 the new seller Service Fee (see below), from your Ruby Lane account when your order is finalized. Ruby Lane then uses that money to pay the state sales/use taxes on your behalf.
As purchase orders are finalized and sales tax & fees are deducted from your shop account for amounts already paid to you by your buyer, it may cause your shop account to go negative. Shop owners are strongly encouraged to fund their shops accordingly.
Change to Seller Charges and Fees starting January 1, 2020
Along with the changes above, we are changing the fee structure for all shops.
We are providing 6 weeks notice of this fee increase, effective January 1, 2020, to help shops with their holiday sales.
The reason for the fee increase is along with our new Sales Tax obligation overhead, the general cost of doing business has increased, and our marketing costs have skyrocketed. Our last fee increase was more than 3.5 years ago, and to stay relevant and competitive in our online space requires additional marketing expenditures.
There is a new seller Service Fee of 3.75% of the item totals + shipping/handling on all finalized orders, rounded up to the nearest 25 cents. Even though we are adding this new fee, Ruby Lane is continuing to allow open communication between buyer and seller, unlike the majority of other marketplaces.
The minimum monthly Maintenance Fee is changing from $69 for up to 80 items, to $54 for up to 50 items.
The tiered per item system stays the same from 51 items and up:
- From item 51-150: 30 cents per item
- From item 151-1000: 20 cents per item
- From item 1001 on: 1 cent per item
Starting January 1, for a shop with up to 50 items, the minimum monthly cost of maintaining a shop on Ruby Lane is $54. For a shop with 80 items the minimum monthly cost is $63.
The one-time Listing Fee remains the same at 19 cents per item.
We realize the Sales Tax and buyer’s Service Fee changes are happening with holiday sales upon us, however, we have no choice but to comply. These new tax laws have put a tremendous burden on us and also now our shop owners. As always, we continue to evolve and make selling online as effortless as possible for both our sellers and buyers.
Thank you for your understanding.
Your Ruby Lane Team