New eBay Fees Will Include Commission on Sales Tax

eBay is revamping its fee structure, taking a radically different approach. Instead of paying a Final Value Fee (commission) on price-plus-shipping and a payment processing fee on the total transaction amount (including sales tax), sellers will pay a single percentage fee on the *total* transaction amount. In other words, eBay is combining its commission fee and payment processing fee into one percentage based on product category.

That means sellers will pay a commission on sales tax that eBay must collect on behalf of states that charge it. The changes will impact sellers enrolled in Managed Payments, which will include many more sellers by the end of July.

Sellers are dismayed, and it's not clear states or other regulators would approve of the practice of a marketplace charging a commission on their taxes (opposed to payment-processing fees alone).

After confirming that eBay would charge the single commission-plus-payment-processing fee on the total transaction amount, eBay executive Brian Burke told a seller in the discussion boards that he understood that was not the answer the seller was looking to hear. "Our goal with the changes was to simplify (single fee), reduce billing complexity (send you net fees) and reduce seller fees where possible. Most sellers can expect to see overall savings."

It is difficult to compare how the new fee structure changes will impact each seller for each sale, in great part because Final Value Fee commission rates vary by category and are not yet available to all sellers. But eBay has in the past rolled out changes that have been more costly to sellers under the banner of "simplifying" policies or fees. (And eBay may easily raise commissions after sellers have adjusted to the new practice.) 

eBay has not announced the new fee restructuring publicly other than notifying sellers who will be enrolled in Managed Payments by July. Sellers told EcommerceBytes they must be registered to view the new rates.

We're still going through the changes. Let us know what jumps out at you with the changes.

Update 5/10/2020: See more information in this May 10th EcommerceBytes Update article.