A few days ago I asked whether inflated shipping charges on eBay are bad. My original take was that the shipping charges by themselves really didn't matter that much — it was the sum of the final bid and the shipping that was important to the buyer, as well as knowing in advance what that number was going to be before the buyer bid on the product.
This post spurred lots of great comments, both from the side of the buyer and the side of the seller. Here are some of the highlights:
- Some buyers wouldn't do business with those who inflate their shipping charges. The rationale was that if the seller is trying to hide his/her profits in the shipping charge, what else are they being less than honest about? Perhaps some charge above the actual shipping charge (for handling, packing, gas, time, etc.) is in order, but when it's all shipping charge there might be cause for concern.
- High shipping charges on some items and not on other similar items makes it difficult to compare prices. An item for $4.99 looks like a better deal than the same item for $19.99, but the $4.99 item may have $20 more in shipping charges.
- Some of the commenters think that there are buyers that just complain too much. It's quite true that some buyers will never, ever be satisfied with the deal, and make it SOP to complain, threaten negative feedback, etc. These people will always exist and it's part of doing business.
- Shipping is not without cost to the seller. What the buyers usually see on a package when it's mailed is the charge incurred for transporting an item, fully wrapped, from a designated location. Packing the item, buying the materials used to pack the item, and transporting the item to the mailing station are usually not free, and they do take time. So the guy that was whining about a seller “making 23 cents on shipping” after the seller packed a pair of roller skates, drove to customs, and spent a few hours clearing the blades really just needs to shut up. Commenter Tyler said this: ” … people aren’t shipping these items out of the kindness of their heart
it is a business transaction and shipping materials, time and mileage
are all costs of doing business.” And commenter flifla said: “Excuse me, but eBay sellers do not live at the post office.” - Is it “shipping” or “shipping and handling?” Commenter Michael Langford says that the wording “shipping” is setting up buyers to be misinformed about the actual charges of getting the item to them. Technically the “shipping” part is the transportation cost between post offices or office to office. “Handling” is all of the other stuff. The “shipping and handling” charge can be more than the “shipping” charge, but doesn't have to be.
- High shipping charges or not, it's part of the contract. Each bid is a contract between buyer and seller. Bidding indicates acceptance of the seller's terms and conditions. Gotta pay attention!
I've sold quite a few items on eBay. This is how I've dealt with shipping charges for my eBay auctions:
- I don't build it into my business model to make money on shipping. I try to be fairly priced with shipping.
- I try to cover myself as best as I can while being reasonable at the same time. I weigh the item. I check to see how I can send the item. I determine the farthest place I'll ship the item, and base the shipping charge on that so I'm not losing money on shipping.
- I always state what the shipping charge will be, and I make it flat-rate. Some sellers will use a calculator that determines shipping charge based on ZIP code, but I prefer to have the number right there so people can figure out their total cost — their bid, shipping, plus insurance if they want it, plus tax if they live in Virginia. Because I state very clearly what the charges will be, I don't sweat it too much if I'm off a little. I don't put a lot of verbiage in my auctions, so it should be straightforward for a buyer to figure out what the item will cost to their door.
- If it turns out I've way over-estimated shipping, I'll try to make it up some other way. I've been able to ship items faster or insure them for no extra charge because I charged too much for shipping. This is a better way to do business. The buyer already accepted my terms and conditions, so if I do more than I promised in the auction, they'll be delighted. I'm not obliged to, but if I can, I will. If I've made a great profit on an item, it doesn't do me any good in the long run to be greedy.
This is a great discussion. I'd love to hear any other comments!
I read an interesting post a month or so ago on Marginalrevelution.com. The post discussed a study by some economist who studied shipping costs and bids on ebay. It turned out that sellers who used high shipping and handling costs ended up with more money than those whose shipping costs reflecting only actual costs. Apparently, the lower bids attracted more bidders even though the total costs were higher.
I have sold a few things on ebay, and guess at the shipping charge, but don't spend too much time on it. As a buyer, I just build the shipping into my cost, and I have a limit for everything I buy, so it doesn't matter if it goes to shipping or not. It makes me more mad when it is hard to determine what shipping will be, or if you have to email the seller for a shipping cost, than if it is just posted on the auction site.
From USPS website, there is a box you can check so that the shipping cost is not displayed on the shipping label. I check this. I don't think it is something the buyer needs to know.
Yes, many ebay users put big shopping charges to give a low starting price. However, some people think they should only pay for stamps. It's reasonable to add more for good packaging, perhaps a little for handling. Ultimately, though, I keep my shipping cheap – I want to encourage bids, not have people thinking, 'Hey, he's overcharging'…
Don't remember if I mentioned this on the other post. Sorry if I did.
I've had 2 recent auctions, on the first one person bought two seperate items and sent $16 for shipping. ($8 for each item) I was able to fit them into one box and ship for $10 so I refunded him $6. I'm not out to make a killing on shipping.
The other auction was to ship to Canada. I don't sell much. I looked it up at USPS.com it came out to $20. Well at the post office it was MUCH less so I refunded her too.
Of course I'd like the extra money, but I'd feel too guilty just taking it and I'd rather refund it since it's a large amount (over $3) Just my way of doing it.
I don’t mind paying a bit for handling charges, but there is a limit.
I was looking at a miniature wicker gift basket shaped like a dog bed. It was selling for 99 cents. Shipping was $30. Actual shipping fees might be $3 at most. Add a few dollars for packing materials and time is fine, but $30 is silly.
I’ve seen many people who inflate the shipping fees way over the value of the item.