posted on February 13, 2002 09:17:11 AM
When I started selling on Ebay over 3 years ago, there was one fee...that was from Ebay. Easy to build into pricing structure. Now I am paying the Ebay fees, Paypal or Billpoint fees in more than half my auctions, Andale fees.....keep thinking how do you account for all of them/building them into your pricing structure so that you don't end up just working to pay fees/cost of products. What is your rule of thumb...any help appreciated.
posted on February 13, 2002 09:28:48 AM
It's tough, especially with postage going up too. I don't think there is one answer out there to how to deal with it. One way to recover some of these fees are the shipping/handling charges. I know that is a big contraversy here, but what else can you do sometimes? If an item starts at $5 and sells for $10, you are talking about 80 cents in Ebay fees, and 59 cents in paypal fees (plus other costs, for me, ebay seller assistant costs $5 per month, I already have servers for other purposes, so I don't have those extra fees, but they add up. If it costs you $2 to ship and you charge $3.50, that will help recover some of those fees.
I like to keep fees down (I never charge less than $1, even if it only requires an envelope and 34 cents) so if people complain (and very few have) I explain what it costs me to do business online, and since I can't add those costs onto the final price like a retail business does since this is an auction (and I start my prices pretty low) that this is how that must be made up.
posted on February 13, 2002 09:34:45 AM
I also charge a small handling fee but I do disclose this in my auction terms if the buyer wishes to take the time to read it.....I also cut fee's by not upgrading my paypal account so I have no fee's with accepting certain types of Paypal payments and I still receive plenty of payments thru paypal so I don't see that this has hurt my business any.....I figure if the buyers wish to put his purchase on a credit card, that option is still available to them thru bidpay..........My "beef" is with sellers that hide their handling fees in their shipping and don't mention handling fee's in their auction terms.....I think if you charge a fee, then you should disclose this in your auction.......even if you don't disclose how much the fee is.......it should at least be disclosed that there is shipping/handling fee.....
posted on February 13, 2002 09:41:04 AM
I disagree about the need to disclose what the fees are for. I have NEVER seen this done with any mail order company (and I have ordered from many, I just got my checks done with a mail order company, and I was charged something like $6 when it probably cost them only about $2 to ship them) - When someone tells me $6 shipping, I figure there are handling fees, and if I were curious, I might ask, but I don't feel an obligation to tell my customers that they are paying a handling fee. Now, I believe it is important to list the total amount they will pay. I've seen auctions where there is no shipping amount listed, then when you win, you might be subjected to high handling fees. This happened to me one, on an auction that was about to end and I really wanted the item. I factor those fees in when bidding, I have an idea what something will cost to ship to me, and can figure out on my own above the shipping what I am paying for.
posted on February 13, 2002 10:31:09 AM
I try to state what shipping will be in my listing so there are no surprises. I sell smaller scale items and only accept Paypal if the buyer is paying with funds they already have so I am not paying CC fees. I dropped Billpoint awhile ago ( I didnt see any value in having it). One example is this:
I buy widgets in bulk at $1.00 each and start bidding at $4.00 each in a dutch auction (dutch auction listing fees save you money). I state that it will be $2.30 for shipping although the actual cost of shipping is $1.30. My entire listing fee and some of the FVF is covered by the differance in shipping of 2 widgets.
MEOW
posted on February 13, 2002 10:37:19 AM
One more thing you might want to consider. Ive seen listings where the seller states that there will be a $1.00 packing/handling fee + the actual cost of shipping. (this of course is only if the actual shipping is not yet known.)
MEOW
posted on February 13, 2002 10:42:14 AM
I estimate the unknown fees before hand based on the best price my item might bid up to. Subtract all est cost/fees from est bid payment. Now you can see if you need to raise your min bid.
After the auction, of course, I put the actual fees amounts in and find my real profit.
Spread sheets would tally this automatically. Just make 1 column for estimated and 1 for actual.
note: Paypal includes shipping when they figure their percentage. Ebay doesn't.
No doubt their is a program that does it for you somewhere.
posted on February 13, 2002 10:49:28 AM
Of course, you could take the fine example of Half.com. They charge buyers as follows (note quotation marks): "Standard shipping (USPS Media Mail) for this item is $2.30.
posted on February 13, 2002 10:55:28 AM
I actually emailed Half.com and wanted to know why they were saying that the USPS rate for the item was $2.30 media mail when it only costs $1.78. The USPS rate was NOT $2.30 (it's Half.com's rate) but I dont believe they should be using the USPS name.
MEOW
posted on February 13, 2002 11:00:20 AM
We simplify the shipping issue by adding the following disclosure in our listings:
"Winning bidders pay $5.00 for Priority Mail shipment to your specified U.S. address."
The cost for us to ship a package is usually $3.50 for postage, .18 for the full sheet label which includes the free Delivery confirmation through the Postal website, the cost of peanut cushioning to professionally package the item, plus other incidental costs that many of us sellers know all to well about (many of which are unappreciated and unacknowledged by buyers).
The above ends up in a wash and shipping ends up being a cost to do business, rather than a profit center for us.
It's going to get a heck of alot more complicated to manage shipping costs in the coming months, as the Postal service is expected to take an increase in the form of a sliding scale cost chart by region for all Priority mail packages. No longer will us sellers be able to determine the cost of a Priority mail package by weight alone. I'm not looking forward to this change.
It is realistic to charge a modest markup on actual shipping charges to cover the costs associated with the service. This can also be done while at the same time providing a high level of value and service to your customers. The key is to be reasonable and fair and MOST buyers are willing to happily comply if presented to them properly.
posted on February 13, 2002 11:34:09 AM
USPS is not profitable and i am afraid they will lose us the small sellers due to our need to protect ourselves in case of chargeback.
signature delivery is 1,75 (1.25 electronic),insurance is 1,10 and up.
so right there it is 2.85 above your postage.
if the item is damaged,customer needs to bring everything into the post office and showed to the clerk.i know ebay bidders dont seem to mind,but if you have a shop,they dont want to be bothered ,especially the line is so long these days.
it is bad enough the item arrived broken,now you are asking your customer to make a trip to the post office and stand in line .
i have been considering ups or fed exp - insurance up to 100 is included and shipment is trackable and signature receipt is good enough in case of chargeback and if the item is broken,all the customer needs to do is to pick up the phone and report to the shipper.
the items i would be shipping via the post office would be intl shipments,books or items i can easily replaced if lost or damaged,or low price items.
usps may need to set up a separte service for business if they want to compete with ups and fed exp.
you cannot say they dont care,they do,i can sense they are nervous when fed exp placed an overnite dropbox outside the post office.
posted on February 13, 2002 11:42:45 AM
computerboy - if most of your packages are under one pound (as indicated by the $3.50 postage), you should be fairly immune from the sliding scale rates - Priority Mail under two pounds will still be a fixed rate.
posted on February 13, 2002 11:57:02 AM
Is the sliding scale on USPS web? I'm surprised the post office didn't mention it as I am there several times a week.
Maybe that's why she's been giggling so much lately.
posted on February 13, 2002 12:22:39 PM
ahc3.......As far as my comment to disclose fees.......I am mainly a seller on ebay, but do occasionally buy so therefore as a seller, I am maybe more knowledgeable about estimating what an item might weigh and what the actual postage cost is.....It aggravates me when I see a seller state, "$5.00 for priority mail shipping" when I know that actually (based on the weight of an item I am familiar with) it is $3.50 priority mail shipping and $1.50 handling fee......because in all fairness it wasn't "$5.00 priority mail shipping" as was stated. It would tick me off for a seller to charge me a handling fee if it wasn't stated within the auction that the cost was "$5.00 for priority mail shipping AND handling".......or for them to send me out an invoice that has a handling fee added in when there was no mention of handling fee's in their auction AT ALL....
posted on February 13, 2002 12:23:38 PM
There's been quite a lot of discussion about what to build in and disclose in the past on AW. You just need to charge enough for the item and shipping should cover the cost to mail it to make the profit you want and bidders really don't need to know how you do it anymore than they do with any other dealer/seller on the web or through mail order--this discussion would never occur among most regular web sellers just the auction crowd. Shipping includes handling so the bidder doesn't need to know how you keep your books with a breakdown analysis. It's tacky, kind of like asking my doctor what part of the bill covers his malpractice insurance.
If I don't trust a seller, no amount of business disclosure matters. I'm the buyer, not his accountant.
If your markup on the item is so thin that the fees eat your profits up, something is terribly wrong. Much of what might be fees can be buried in shipping costs, but the item itself should sell for enough on its own to be profitable if you don't get your fees in shipping. Cases in point: very expensive items and multiple items shipped together at reduced shipping costs.
posted on February 13, 2002 12:23:51 PM
Yes, just go to the USPS site, and then to "Postage Rates and Fees." At the bottom of that list is the Proposed Postal Rates link.
They haven't exactly been advertising the rate hike in the post offices. Computerboy is right - the sliding scale for Priority packages in the two to five pound range is going to be a real headache for any seller trying to offer one fixed nationwide shipping price.
Notes:
------
The only rate that will be constant is 1 pound. It will be $3.85. 1-2 lbs. will be zoned. Flat rate envelopes will be $3.85, now. So, if you have 1 pound or less, you can use the flat rate envelopes interchangebly. Like someone said elsewhere, "That 17th ounce will be expensive."
Examples of new rates:
----------------------
4 lbs: Zone 1 = $5.30, Zone 8 = $10.35
13 lbs: Zone 1 = $10.00, Zone 8 = $24.35
posted on February 13, 2002 12:33:29 PM
ah crap, you're right technerd. The header for the section I'm looking at says "2 to 5 Pound Rates are Zoned." I figured that meant anything less than two pounds is not zoned. But then the text underneath that header says that anything between one and five pounds is zoned. I didn't realize the 2-pound rate is considered anything over one pound up to two pounds - I figured it was between 2 and 3 pounds.
posted on February 13, 2002 02:08:30 PM
Actually, the proposal is for 1 pound and over to go zoned, not 2 pounds. It does not take much to get a package to 16.1 ounces...
posted on February 13, 2002 02:31:00 PM
I just know that when I buy from someone and they charge me $5.00 for mailing it and then I actually get the item and it only cost them $3.50 to ship....it leaves a bad taste in my mouth and I wouldn't deal with them again.....unless they told me up front they were charging a handling fee, so I knew to expect it......If an item is received with that much over postage charged and no handling fee was disclosed I would feel that the seller was being dishonest and trying to pull one over on me.....as far as mail order catalogs doing this...we are not mail order companies......we are auction sellers on an auction site.....much different from my perspective.......And I just feel that at least by disclosing there is a handling fee (auction doesn't even have to state how much of a fee......just that there is a handling fee charged) then I when acting as a buyer can know to email and inquire how much of a handling fee is charged.....
[ edited by Nanasturtles on Feb 13, 2002 02:32 PM ]
posted on February 13, 2002 02:43:09 PM
If you told me upfront that you had a handling fee of $1.50 I MIGHT not choose to do business with you at all, so I suppose it is better (in my opinion) to lose a repeat customer than not to get one at all. I expect a reasonable handling fee, and $1.50 is reasonable, but if you spell it out upfront it might make the difference between getting a bid, and not getting one.
I think most customers are reasonable, and do not expect to pay the EXACT shipping fee of an item. An item that I sold for $30 that gets paid with paypal and insured 1st class mail would cost $4.92 with all expenses (and this does not even count anything besides paypal, ebay and the USPS - It does not include my $60 Laser Jet toner, paper, supplies, etc.) I only charged $4.00 on this item. Now, If I put $1.67 shipping plus $2.33 handling, do you think I would get many bids? I don't.
posted on February 13, 2002 02:51:39 PM
Just in my opinion (mine only).....I think it's better to be honest up front than to have a customer feel that they were deceived or cheated when they were told it cost XXX amount to ship when in fact they see it cost much less when their package is delivered....I do charge a handling fee...it is disclosed in my auction terms and it is itemized on my invoices as such......I don't think I have too many disallusioned customers and I do have repeat customers.....when they get their packages, the shipping is what was quoted.....Just how I like to do business and how as a customer, I like business to be done with me. Also just voicing my opinion not trying to change how others conduct their business but nice to get a perspective from different sides......thats what helps us all to figure out the best way.....from others experiences..
posted on February 13, 2002 03:01:31 PM
I agree with Nanasturtles. If shipping cost is not disclosed upfront in the listing and I won a particular item, if the seller tells me after auction close that shipping is $4.00 and then I get the item and it cost them all of $1.75..I wouldnt be happy either, especially if in the auction it said that buyer to pay actual shipping cost. In my opinion, sellers should have a set shipping rate and if that is impossible (like on large or heavy items) they can simply state in the auction listing that buyer pays actual shipping cost plus $___ packing and handling.
MEOW
posted on February 13, 2002 03:07:43 PM
I agree the wording matters. If the auction stated buyer pays exact shipping charges, I pay $4 and it cost $1.75, it would be bad. My point is that I don't feel it necessary to breakdown the shipping fees from the handling fees. I don't care that this is ebay, mail order is mail order, be it auctions or JC Penney. I also deal with mail bid companies that don't break down the shipping charges either. I would be glad to explain if asked, but If I write in my auction actual shipping $1.67 and other fees $2.33, I think I would ruin my chance of getting a bid.
I also don't understand why someone complains who pays $3 and it gets shipped in an envelope with a 57 cent stamp. If they buyer was concerned, they should ask this upfront. Unless the seller stated they would ship a certain way (i.e. insured mail via priority mail service) I don't think you have a valid right to complain if it isn't shipped like you assumed it would be shipped. This should have been cleared up beforehand. On items under $15, I tend to ship non insured, since the fee does not make it cost effective. I still charge more than the actual shipping charge, and I am more to willing to take the hit (and I have) if the item gets lost...
But ALOT of sellers use the practice of saying shipping is lets say $4.00 and ship the item with the postage saying $1.50 EVEN though their auction listing clearly states that Buyer is to pay ACTUAL shipping cost. I mean there are 2 options on ebay when Buyer bays shipping: Actual and fixed. If its fixed, the shipping charges are clear in the listing and the buyer knows THATS what shipping will cost them before they bid, BUT if Actual shipping is checked off, its a clear rip off that the buyer overpaid on postage UNLESS a nominal fee is disclosed.
MEOW
posted on February 13, 2002 03:16:59 PM
"....If the buyer was concerned, they should ask this upfront".....
This is why I believe if there is a handling fee it should be disclosed that there is a handling fee.....not necessary to disclose how much the fee is if the seller chooses not to.....just that there is one and then it is up to the buyer to email and inquire HOW MUCH the handling fee is if the buyer is interested.....but what I am referring to is when sellers only put in their auctions....."$5.00 to ship by Priority Mail"......that statement does not say anything about a handling fee versus "$5.00 shipping/handling by Priority Mail Method"......which at least would gives the seller the heads up that a fee is being charged.........no disappointment when that packaged is received and only $3.50 postage was required.....so that was my point that wording is what I can have a problem with.....not necessarily that the exact handling fee's be disclosed if the seller chooses not to.....
Long day....editing my spelling errors! ~smile~
[ edited by Nanasturtles on Feb 13, 2002 03:19 PM ]
posted on February 13, 2002 03:22:52 PM
I charge $4.95 s/h fees to most of my auctions regardless if they cost $3.50 or $3.95 to mail...
I do combine shipping and charge $2.50 for each additional auction won.(covers the various fees)...
I paid most of the fees last year doing this.
I haven't had a single complaint
Pania
posted on February 13, 2002 03:32:20 PM
I think there is a problem if someone tells you pay exact shipping and you don't, no argument there.
I feel as long as you don't claim buyer pays exact shipping, you are covered. If I say $5 shipped via priority mail and it only costs me $3.50 to ship, I haven't done anything wrong.
I think most buyers are reasonable and expect there to be more expenses than the actual shipping charges. I won't use the words shipping & handling fees, because many auctions don't, and I feel those that do are probably losing business upfront that they don't know about. There is a negative association with the word handling (after all, who wants to be handled) and I just won't use it! In case you are wondering, I have zero negs, and about a 30% repeat customer base.
posted on February 13, 2002 04:10:00 PM
"I also don't understand why someone complains who pays $3 and it gets shipped in an envelope with a 57 cent stamp. If they buyer was concerned, they should ask this upfront. Unless the seller stated they would ship a certain way (i.e. insured mail via priority mail service) I don't think you have a valid right to complain if it isn't shipped like you assumed it would be shipped. This should have been cleared up beforehand."
I don't agree with this at all. As a seller, I state my shipping fee and shipping method upfront in order to discourage bidders contacting me to clarify the shipping method. Why waste time clarifying the shipping method through individual emails when it can be answered for all to see in the auction's TOS? Also, remember that some bidders stumble across actions in the closing hours or minutes of an auction - unless the seller is chained to the computer, there may not be time for clarification.
As a buyer, I find that stated shipping costs where the method is not stated are sometimes intentionally deceptive - no different than conveniently overlooking a major flaw in your item's description. Case in point: I won an auction that simply stated $4 shipping for an item that could be shipped for $3.50 Priority. I had no problem with what I figured was a very slight handling fee. The item arrived weeks later, shipped through Media Mail. Should I have assumed it would be shipped Priority? Maybe not. Should I have guessed it might be sent Media? In this case NO - because the item didn't even qualify for Media rate! Ever since then, I've skipped over any auction that doesn't mention the shipping method.
