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(Answered Through Paypal Customer Service) Paypal Fees Deducted Per Order Don’t Add Up

(Answered Through Paypal Customer Service) Paypal Fees Deducted Per Order Don’t Add Up

When selling goods online, one of the biggest headaches can be understanding the various fees charged by platforms like eBay and payment processors like PayPal. Recently, I discovered that the fees deducted from each order I process through PayPal were far higher than what I expected, raising serious questions about where this extra money was going. As someone selling signs on eBay with prices ranging from $12 to $20, the discrepancies in the fees I was paying became particularly troublesome.

Let’s take a close look at the example fees. For one order totaling $15.14, a fee of $1.89 was deducted by PayPal, leaving me with $13.25. On another order that came in at $23.93, a whopping $2.84 was deducted, which is far more than the expected 11% to 13% charge.

To put things into perspective, when I receive orders directly through my website, PayPal’s fee is only 2.9% plus a $0.30 fee. This is a much more manageable and expected cost. The situation on eBay only seemed more puzzling after I examined the two services’ fees.

Initially, I wondered if these higher PayPal fees on ebay transactions were already encompassing the additional 9% eBay seller fee. But this doesn’t seem to be the case as my eBay account reveals I am still being charged separately for the typical eBay costs. Thus, the question remains: what is making my PayPal fees on eBay orders so much higher compared to direct orders on my own site?

Through further investigation, I reached out to PayPal customer service for clarification. After a detailed discussion, the understanding I gained is that eBay transactions processed through PayPal are subject to a different fee structure. According to PayPal, the higher percentage I was seeing was a result of PayPal’s standard fees for a single-transaction type, which is indeed higher than the fixed plus percentage model used for direct website transactions.

This revelation shed some light on the issue, but the overall take of the nearly 20% from eBay and PayPal combined certainly diminished my profit margins. As an online seller, it’s crucial to be fully aware of all the pricing strategies and fee structures associated with selling your goods online, especially if you are cross-listing on different platforms like eBay and your own direct sales platform.

Understanding and adapting to these fees is not just a question of understanding the financial mechanics of selling online but also about knowing how to price your products appropriately to reflect additional costs without setting prices too high. For sellers who might be in a similar position to me, the advice would be to communicate with both eBay and PayPal directly to get a clear understanding of the fees, and potentially look into alternative payment options that might offer a better financial return.