Did You Know eBay Charges Promoted Listing Ad Fees On Tax & Shipping?
In this week's eBay For Business podcast, I was surprised to see a question regarding Promoted Listings fees being charged on the total amount of a sale including shipping and tax.
Griff: ...So Kathy wrote, I've had good success using eBays Promoted Listing program and trying to factor that cost into my listing prices. And I was looking at some reports this morning. I noticed that the Promoted Listing fee, which is a set percentage, is charged on the sale plus sales, tax shipping and other applicable fees. All this time I thought it was only a percentage of my sales price.
I normally offer free shipping except on more expensive items I want to track and international orders. She goes on. When an international buyer purchases an item and they pay VAT or other fees, do I have to pay a percentage of that for the promoted listing? If so, that makes it impossible for me to know how much my promoted listing fee will be because most of my listings are available to international buyers since I can't control who buys them I can't predict my cost because of the way eBay assigns the fee...
...Yes, I know I should have read the fine prints so this is my fault. But please let the powers that be at eBay know that this news has led me to reconsider the cost of my promoted listings. Just doesn't seem right to charge fees on the total amount rather than the sales price. And it makes it difficult to predict the full cost of my promoted listings fees. This is the same for final value fees. So my prices are all going to be increased to cover those costs.
Griff and Brian went on to explain that yes in fact the Promoted Listings fee is applied to the total sale amount, including tax and shipping, but they did not give details about when that changed - leaving out an important part of the story.
Kathy is correct that for several years, Promoted Listings fees only applied to the item price. However, in February 2022 it was announced in the Winter Seller Update the calculation for fees would be changed to the total sale price including shipping and tax effective June 1, 2022.
When the change rolled out, many sellers raised similar concerns about the loss of transparency and no longer being able to see the estimated ad fee dollar amount before listing.
Since there is no way to know ahead of time where the buyer will be located, thus no way to know what the total with shipping and tax will be, there is now also no way to know upfront what the total dollar amount of the ad fee will be.
I saw several posts in Facebook groups and across other social media channels today in reaction to this question in the podcast and it appears Kathy is definitely not the only one who didn't realize the ad fee calculation had changed.
So I went looking for an explanation and believe I've found the culprit - eBay is not at all consistent with how they notify sellers of the fees being calculated on the total sale amount when opting in to Promoted Listings.
In some places it is explicitly and transparently stated without needing to click on any links or info pop ups (small i in a circle icon) and in other places it is not.
When setting up a Promoted Listings Standard campaign to include multiple listings, you have 3 options - Simple, Bulk, or Automated.
In the Simple campaign flow, it is clearly stated the fee will apply to the total.
It's also clearly stated in the Bulk campaign option flow.
But the Automated campaign hides this very important information behind an info pop up - and without any visual indication that little i in a circle can be clicked on for more information, many sellers may never even realize it.
What if you don't use campaigns and instead prefer to opt in and set ad rates individually for each item through the listing flow?
Here too eBay fails the transparency test by hiding that information in an info pop up.
Is there any logical reason they couldn't have used that giant white space to the right of the ad rate box to put that message in the desktop view?
Interestingly, it is included in the mobile app listing flow.
It is ultimately the seller's responsibility to make sure they understand the terms of Promoted Listings or any feature on eBay before listing, but it wouldn't hurt anything at all, and in fact may even help eBay gain seller trust, if they were to make the user experience consistent across all campaign options and listing flows.
Were you aware that eBay changed how they apply Promoted Listings fees last year? What would you suggest for eBay to better communicate this to sellers to avoid surprises? Let us know in the comments below!