Ever seen an auction for a rather expensive item priced at 0.01 cent and $150 shipping?  Ever seen a book listed for $5 below everyone else's price for  an identical book, but with $6 higher shipping than other listings?  How about a single music CD with a $0.01 starting price and $6.99 shipping and handling fee?  I am certain you have seen at least one of these.

Why do sellers do it?

Well, for many reasons.  Probably the most important is the fact that it costs the seller only a fraction of what you paid to ship an item to you, so they keep the difference. Another important reason is that they do not have to pay final value fee on shipping portion of your purchase, and therefore get to keep more money in their pocket.  And third reason is the fact that many buyers bid on impulse, simply because the starting or listing price is pretty low, or at least lower than all other sellers for an identical item.  

Buyer mistake #1.

Many buyers do not take their time to read through an entire auction to make sure they know all of the terms and conditions of the offer

Buyer mistake #2.

Buyer sees a low price and bids on it based on price alone, ignoring the fact that there might be inflated shipping, handling, and insurance charges, making your total purchase price much less attractive.

Is it legal?

Ebay has a strict rule regarding inflated shipping charges.  While they do not specify exact fees to charge, Ebay encourages to report sellers who abuse this rule.  Read more about excessive shipping/handling charges here: http://pages.ebay.in/help/policies/listing-shipping.html

What some sellers claim.

Some sellers claim that shipping rates have gone up, and therefore they must increase their shipping costs to cover their expenses.  This is true - on May 14, 2007 USPS raised their shipping rates by anywhere from 5-25%, BUT that does not mean that the seller should now increase their shipping rate by 50-100% to cover costs.  Many hide behind this lame excuse, but that is just wrong.  Many sellers use UPS, Fedex or DHL to ship - and there were no increases there.

Educate yourself before you bid.

Please, do yourself a favor, and read carefully through the entire listing,  and pay extra attention to shipping/ handling and insurance fees.  Add them all up, and only then decide whether or not the item you are buying is still a good value. 

If you found this guide at least somewhat helpful, please vote 'yes'.

Thank you and happy shopping.