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Let's get real on shipping costs !

by: wallstwhiz( 250Feedback score is 100 to 499) Top 5000 Reviewer
5 out of 8 people found this guide helpful.
Guide viewed: 1001 times Tags: Buying | Selling | Auctions | Shipping | Business


     Hello to all.  It's time to get real....on shipping costs.  These costs are an obvious part of doing business as a seller, whether on eBay or in other venues.  Now I'm not here to go on and on about whether some sellers try to offset low "Buy it Now" prices on their auctions by using inflated shipping costs, or whether other sellers jack up the shipping costs in order to cover eBay/Paypal fees or to just boost their bottom line.  We all know it happens.  It's the nature of the beast.  Instead of complaining about that stuff, simply don't bid on their items and look for another auction. Simple as that.  What I am here to talk about are your everday honest sellers, who are doing the best they can trying to have fun and make a buck at the same time.  After all, if your not making any money here - why bother selling at all?  But that's another story.  So who are these sellers and how did it all get started?  I'm glad you asked.

     Many eBay sellers are common everyday people who enjoy selling items they have saved over the years.  Some eBayers serach out different places to find items to sell on ebay such as: websites, auctions, flea-markets, yard sales, estate sales, etc. Of course you also have your Power Sellers and what I call Super Sellers (those people with such a large number of transactions in their feedback that it makes your nose bleed).  Some of these people also are actual vendors who run an eBay store or perhaps even have an actual retail store where they sell goods or services.  There are many varied possibilities.  The tie that binds them together is the same one that has existed since commerce began - to sell a product, you need to deliver the goods.  In the old days, ( Not the days of the Roman Empire - think: Little House on the Prairie) consumers would either have to wait for a vendor to come along with his wagon load of items to sell, or they had to go to a shop to gather the items they needed.  In many cases, people would have to travel long distances to buy a fancy new hat or rifle.  Not too long ago, while hiking through some Utah Canyons, I found myself in a similar situation to what those pioneer people must have gone through.  I realized that if I wanted a double whipped, beaten and humiliated frappu-late' grande mocha coffee - I would have to travel 50+ miiles to get one.  I am thankful that I don't drink such addictive things as coffee and that I stick to healthy beverages like Scotch Whiskey.  But I digress.  In any event, things have improved alot since the olden days and goods are now routinely ordered by phone or online and shipped at a moments notice across the globe.  But what about this shipping and handling of goods - does it really cost anything?  (Of course not - and most floor waxes are made from pixie dust)

     When you go to a store and buy an item such as a box of canary feathers, there are alot of costs that go into bringing that item to your local store so that you can purchase it.  Someone had to have the idea of selling canary feathers. For the purpose of this example, we'll call that someone Mrs. Esterhouse. (There's bonus points if you know what movie that name is from)   So, Mrs. Esterhouse then came up with a business plan (hopefully) on how to sell canary feathers for a profit (hopefully).  She then set out to raid the piggy bank, nag her family and friends, or browbeat a local small business lender into funding her start up company.  Now that the Esterhouse Canary Feathers company had begun, Mrs. Esterhouse set out to find a supplier of canary feathers, someone to tranport the canary feathers to her, secure a location for her company to operate out of, hire employees, plan advertising and marketing, discern her target market, conducting research and setting price points for product, order supplies, apply for all necessary permits, variances and other nonsense the government throws at you (including a possible kickback to the local neighboord, new business, welcome wagon - that will ensure your new business does not mysteriously burn down) and a myraid of other joyus events that need to be completed to get the business up and running. So now with all this planning and more, Esterhouse Canary Feathers finally receives its first orders.  The feathers are ruffled and oh so nicely placed into a box and shipped to their new owner - the purchaser.  But wait - something's amiss.  After reconciling the books later that week, Mrs. Esterhouse (who is the CEO, COO, CFO and Uh-oh for the company) discovers that she has lost money!  How can this be ?  After pouring through all the numbers it seems painfully clear (or is it the lack of sleep).  Esterhouse Canary Feathers did not properly calculate the cost of doing business. But how ?  Well it could be many reasons, but for this long and drawn out tale, the culprit happens to be the shipping and handling costs.  While Esterhouse Canary Feathers did a great job pricing their product based on the overall cost structure, they did not adequately price in the cost paid to the employees who have to "handle" the product. (Preparation for shipment reduces time that employees could be using for another function) and the actual cost paid for the shipping supplies.  Yes, lo and behold, shipping supplies cost money. What supplies you say?  Shipping supplies can consist of but are not limited to, the shipping box or envelope, packing tape, paper and ink for invoice/shipping slip, pens, markers, address labels, packing paper, foam and of course the postage.  These are not free and if not properly added into the equation - they will sink any business from the get go.  Ok, so how does this all relate to your average eBay seller ?  (Finally - it's all going to come together).

     Many eBay sellers receycle boxes and envelopes - using them again saves landfills and costs.  But you still need packing supplies, tape, postage, etc.  Often times you either don't have items to reuse, or you've used them all.  So, you have to go out and buy them. (have you seen how much a small 6"x9" padded envelope goes for these days?).  If a seller does not pass along these costs in some way to the buyer - then the seller loses money.  Sometimes, a seller has an item that they will make a good profit on - so they don't mind losing a little on the shipping cost.  But many times, the profit is not alot and taking a loss on the shipping would make the sale of the item a waste of time. So, the seller passes the cost along to the buyer.  A good seller will only pass on necessary costs and not overinflate the shipping cost.  Many will not charge a "handling fee" while others do.  I often shake my head at how some buyers will purchase an item from a seller who has obviously jacked up the shipping costs - instead of waiting and bidding on a more reasonable auction.  Of course there are some cases where you are bidding on a "must have" or "rare" item - and in those cases you are at the mercy of the seller.  But most times, this is not the case.  I also find it quite amusing when you read some sellers feedback comments and see a negative rating left by a buyer who didn't like the sellers shipping costs.  Upon looking at the auction page (when still available) you see that the shipping cost was in fact reasonable.  It's amazing how some people will go to a major retailer's website and pay $5-6 for shipping and handling for a $9.99 CD, but that same person will shout to the roof tops if an eBay seller charges $3 to ship the same item.  Shipping costs money - period.  Any eBay seller that is charging ridiculous shipping costs should be avoided when possible.  However, just because one eBay seller is charging much less for shipping than every other seller is - does not mean the other sellers are trying to cheat you.  The first eBay seller may have gotten their item free, very cheap, or only have one item to sell and not care about the profit made.  Do your best to examine the situation before calling an honest eBay seller a cheat.  So is that it ?

     Yes, that's it.  I hope this opened some eyes (except for mine which are closing after typing for so long).  This is not rocket science (if it was - I wouldn't be typing about it).  This is really common sense stuff that many people already know - but it is also a statement of fact that many others need to hear.  Shipping costs money.  Whether you're buying or selling, keep that in mind - and be fair.  Thanks.


Guide ID: 10000000002422538Guide created: 12/03/06 (updated 04/01/08)

 
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