Additional fees due to metrics crippling me

[jwrecycles]

Hi

I've started selling all my mountain bike gear about a year ago casually as a private seller and as it started selling so well I decided to do it full time and even gave up my day job at the end of the summer when Ebay insisted a become a business seller.

Mountain bike parts are very technical and my buyers tend to be often on the younger side or not have a great deal of knowledge. As such I had quite a few returns, some genuine (they are used bike bits, things can be missed) but more are often the buyers mistake or even 'less than genuine' buyers who've either broken it themselves or in a few unfortunate incidents, being a lot less than genuine. I had no idea about metrics and only had access to the phone app until recently so not been able to control much.

The long and short is that as my NAD were dreamed very high over 2% I got stung with ebays additional fees the first week

I went over from a private to business account, I went from paying 3.5% fees to nearly 20% overnight. My business went from a real earner having to concider becoming vat registered (I'm in the UK) to in a slow death spiral.

Now my profits are far less, meaning the stock I buy are lower quality, more inclined to have issues and I fear Ebay are slowing my visibility.  I'm also now getting into substantial debt trying to plug this spiral. 

I was told I could contest NAD decisions but have had no joy. I've spoken to several advisers who would try and appeal my case, recognising the firstly my used technical equipment would be more prone to NAD issues and secondly I'm being judged on a period I had no idea, and accepted returns to improve customer experience. I was told twice they'd be in touch within 72 hours but they never did.

One helpful and knowledgeable advisor said accounts can enjoy some degree of exemption status, is this true?

Please help

Thanks in advance 

Josh

[marco@ebay]

Hi jwrecycles, thanks for your message.

No, there is no exemption status at all. Once you start listing items, it's a competition against all sellers. Regarding your fees, I am not really sure what fees you are referring to as fees for private seller fees have been 12.8% of the final amount of the purchase +30p for a good while now, and this is slightly lower than before when it used to be 10% for eBay and 2.9% for PayPal.

Regarding returns, we don't really handle the items you send as a seller unless you use the Authenticity Guarantee program, which is a program for certain items that qualify for this program. So, if a buyer files a not as described return, we might not be able to close the case in your favor as we wouldn't be able to dispute the buyer's reason of the return due to the reason mentioned before. If you decide to challenge a dispute, and this is not resolved in your favor, a refund in full will be issued and no fees would be credited back. You have the option to accept returns, get the item back, and then if you issue a refund in full, the selling fees will be credited back to you.

For further information, you can see how our Money Back Guarantee works here, and you can see our returns policy here.

Thank you,

Marco

[*vyolla*]

Is it viable, with your current business model, to factor in free returns (i.e. you pay postage for change of mind or 'doesn't fit' returns)?

This should prevent buyers from going for a not as described return if they've nothing to gain.

[double_o_heaven]

marco@ebay  Marco, he would have enjoyed the 70 / 80% offers as a private seller so would indeed have been paying the fee percentage quoted.  This is one of the hottest topics on the mentor forum currently - you should pop by 😉

[thesmokingrunner]

Marco,

You replied to the OP's question "One helpful and knowledgeable advisor said accounts can enjoy some degree of exemption status, is this true?" with "No, there is no exemption status at all."

It appears, then, that the advisor was neither helpful nor knowledgeable. It is by no means the first time that advisors have been noted as giving inaccurate and misleading advice, usually in order to end a call, and yet callers with genuine queries believe the advice given - at least until they are given the correct advice by unpaid helpers on these forums.

Is anything ever going to be done about such shockingly incorrect advice being given by advisors?

[4_bathrooms]

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@jwrecycles wrote:

I've started selling all my mountain bike gear about a year ago casually as a private seller and as it started selling so well I decided to do it full time and even gave up my day job at the end of the summer when Ebay insisted a become a business seller...

...I went over from a private to business account, I went from paying 3.5% fees to nearly 20% overnight. My business went from a real earner having to concider becoming vat registered (I'm in the UK) to in a slow death spiral.

---

I'm guessing eBay didn't insist on "upgrading" to a business account until your eBay turnover was approaching the VAT registration threshold. The reason for this is eBay are held liable by HMRC for sellers displaying VAT numbers when required; the only way an eBay seller can dispay a VAT number correctly is by having a business account.

You should have been using a business account as soon as you started trading. This has nothing to do with VAT or tax; it's because distance selling laws require you to display certain information if you are a business (including identifying yourself as a business to buyers). It is only possible to display this information on eBay if you sell via a business account. I suppose the question is if you knew you had to sell via a business account and knew what the fees would be would you have given up your day job to focus on eBay full time?

Anyway, there isn't an easy way out of your current predicament. The 4% extra for being rated "very high" in your service metrics is really an extra ~36.7% as it is added on top of the 10.9% for the "sporting goods" category (i.e. 14.9%) then VAT is added on top of the lot (17.88%). What is your current seller rating? If it is "below standard" for two evaluations that incurs another "4%" fee increase.

Before purchasing any more stock and risking getting any further into debt you really need to ask yourself if the business is viable with eBay's standard fees for business sellers - in your case this is (10.9% + 30p) + VAT. If it isn't I would personally sell off the stock you currently have even if it means cutting your losses rather than trying to make a profit. If it is still viable you need to find a way of diluting your NAD rate; you'll need to find something with a low risk of attracting NAD claims and maybe sell that item at or below cost. Do you already have something held in quantity (I'm thinking bolts or pedals) you could try doing this with? 

Also note that at any point someone else may notice your business model and undercut you by using a private account until they too approach the threshold (or they may choose to stay under it). If this happens there is nothing you can do; reporting the seller to eBay for illegally trading via a private account will achieve absolutely nothing. This is one reason so many business sellers feel aggreived when they see (or suspect) someone is trading via a private account.