Who pays the selling and payment processing fees on a consignment sale?
No matter where you sell, most marketplaces and platforms charge fees per sale, and you’ll be paying those fees on your clients’ items. In the same way, every time you sell anything, you’ll end up paying your credit card processor transaction fees on that payment. While these fees are usually small, they can add up, especially as your sales volume increases.
Let’s say you just sold a client’s item on eBay. As far as eBay is concerned, that transaction is no different from any other one you’d do on the site. The fees are billed to the seller’s eBay account as usual regardless of whether it’s an SA item or not and you’ll need to pay eBay for them. PayPal will also take their fees out of each payment you receive for those items. You may also have additional selling fees such as listing upgrades, picture hosting fees, or other third-party services.
Many SAs opt to bill their clients for selling and payment processing fees. The simplest way to do this is to just subtract these fees out of the client’s profits before you send them their payment. You’ll want to make sure your documentation and contract makes it crystal clear that this is what you’ll be doing upfront so they don’t feel cheated when they get their check.
There are a few other things to consider. Since they’ll be paying the fees on them, will you let clients opt out of listing upgrades or other additional fees? Will you be passing any discounts or promotional listing rates on to your clients or will they always pay the posted rates regardless of what you actually paid? Whatever you decide, just make sure you spell it out in your contract to avoid confusion and unhappiness later.
I’ve always passed all actual selling and payment processing fees on to my clients, though I present it as a feature. Because I’m a volume seller and storeowner, I get discounts on fees and more free listings per month than they would get on their own, and so I spin this as additional value I can offer them over selling their items themselves. Since they’d be incurring these fees anyway if they sold their items themselves, I’ve never had anyone complain about having to cover the selling fees, especially since they are so small.
That said, I sell on commission, and a low commission at that. If you’re charging a higher commission or a flat fee, your clients may expect you to cover those fees from your profits. It’s up to you to draw that line where it’s worth it to eliminate that expense from your profits, and when it’s worth it to shoulder those costs to attract more clients.
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