Ebay rolled out its Managed Payments platform last year to a test audience. That roll out continues, and it will likely be in effect for all eBay sellers by the end of the year.
Managed Payments was very concerning to me based on the types of items I sell in my eBay Store. A majority of my items for sale are low dollar cards (less than $5) that are shipped (free) using plain white envelopes (PWE).
You may be wondering how I can make any profit selling dollar cards with all the fees. I transitioned my PayPal account to a micropayments account where the fees are 5% of the gross sale plus $0.05. The standard PayPal fees are 2.9% of the gross sale plus $0.30 per transaction. That thirty cents is a killer on $1 and $2 sales.
With eBay’s Managed Payments everything fees related is on one platform. The fee structure is the standard final value fee (in my case for sports cards – 11.5%) plus a $0.30 transaction fee.
That transaction fee scared me based on many of my items listed for $0.99 with free shipping. On a single $0.99 sale I am paying $0.41 in fees plus the cost of envelope, stamp, and top loader/penny sleeve. On average, my net profit on a single 99-cent sale is 15 cents ($0.41 in fees, $0.38 in stamps, and roughly $0.05 for top loader/penny sleeve). This article outlines how I am paying 38 cents on stamps and a PWE.
My goal isn’t to make 100 separate 99-cent transactions. It is to capture repeat buyers that will grab multiple 99-cent items and that increases my margins.
Before signing up for eBay Managed Payments in July, I ran the numbers for a one-month time frame and showed me roughly an equal amount in fees between micropayments and Managed Payments. My Managed Payments account went live on July 28, and now I have 13 full days of numbers to study.
I was shocked by the results.
Before I show the cold hard numbers, allow me to lay out what sold in this snap shot in time. This represents 320 transactions over the 13-day period. Of those 320 transactions, 116 of them were single 99-cent sales. The average transaction was $6.48.
|Managed Payments||Micropayments||Standard Paypal|
In just 13 days, I saved $119.45 in fees using eBay Managed Payments over PayPal’s Micropayments. The savings is bigger under the standard PayPal account – $155.87.
How Does eBay Managed Payments Work?
You must have a bank account set up in your eBay account to use Managed Payments. That was annoying at first, because I wanted to keep my incoming card money separate from my checking account. I opened up a separate checking account, and it has been smooth. Your money no longer goes into your PayPal account. You will have to set up your bank account associated with Managed Payments to transfer from bank to PayPal.
Can You Still Use PayPal?
Yes. Your payments from sales will not go to PayPal. You will have to transfer from bank to PayPal. Can you use PayPal as a buyer, still? Yes. Managed Payments accepts PayPal, bank account, credit cards, etc.
Is My Money Available Right Away?
No. This is the biggest drawback to eBay Managed Payments. It takes about 24 to 36 hours to clear in your account. Then it is transferred to your bank account the next business day. Monday through Thursday it’s typically available the next day, but anything sold Friday through Sunday will not be in your bank account until Monday or Tuesday.
Can I Pay For Postage From Managed Payments?
Yes. You actually can choose between your Managed Payments account or PayPal to buy postage for the items you sell.
Saving money on fees is the biggest plus I have seen from eBay Managed Payments during the first two weeks in the program. Another positive is having all of your fees paid for immediately. No more sitting on eBay fees until the 15th of every month and then being hit with a month-long eBay Fees bill. The biggest drawback is that it can take days before your money reaches your bank account. Overall, I am a big fan of eBay Managed Payments.