When I started selling on eBay I figured all customers wanted their items quickly, and I should, therefore, always use Priority Mail. What I have found is that many customers appreciate the opportunity choose their shipping method, accepting trade-offs of speed of delivery vs. cost of shipping.  As a customer, I have been less than happy to pay for Priority Mail only to have my seller wait two weeks to get my Priority Mail package in the mail.

As a result of my more than seven years as an eBay member, and, more recently as a Power Seller, I thought I’d share some of the tips I have picked up along the way. 

The Cost of Shipping

The cost of shipping is typically carried by the customer.   The seller can either include the costs involved in shipping in the beginning price of their auction, or present them in the shipping and handling charges.  Customers will be turned off by high handling charges, and the customers will not bid on items with seemingly high starting prices. So the seller has to ensure he does his homework to find the best options available to him.

Comparisons

• Priority Mail: Free shipping materials offered from USPS.  They will delivery these boxes and mailers to your home.  (USPS will also pick up postage paid Priority Mail shipments from the seller's home in many cases.)
• Parcel Post: Lower cost than Priority Mail (most of the time).  No free shipping materials.
• First Class Mail: Significant savings over Parcel Post and Priority Mail for items 13 ounces or lighter. Shipping speed is typically equivalent to Priority Mail.  No free shipping supplies.
• Media Mail: Lowest and slowest.  ONLY allowed for books, audio tapes and other media.  Not for use to ship any other items.  No free shipping supplies.
• UPS: Lower costs for shipping packages over 5lbs coast to coast if seller signs up with UPS for daily rates. No free shipping materials.
• Other shippers: sellers need to do the research on such shipping options as DHL, and FedEx.  Shipping labels cannot be printed though PayPal for these shipping methods.

What other costs are involved?

All forms of shipping require the seller to pay for:

• Interior packaging of items: (I use 1MIL plastic bags, I purchase from other eBay sellers for about 5 cents each)
• Tape: (I purchase in bulk from other eBay sellers)
• Labels/Ink: If the seller hand writes his labels, he can save money here, but the printed labels allow for better/faster delivery.  I refill my own ink cartridges to keep the ink price down.  I can refill a cartridge 5-7 times for less than purchasing a single new cartridge.

Note: Some will argue that the cost of shipping should include the gas to get the items to the Post Office.  If you, as a seller, are running a business, licensed to sell on eBay, you will be able to take deductions for the cost of gas and other business related expenditures.  If you include the cost of these in your handling costs, passing them onto your customers, you cannot also take them as a deduction.

What about Insurance?

eBay allows the sellers to offer items for sale with or without shipping insurance.  Many make it optional for the buyer.  I have seen more disputes and terrible feedback exchanged over items not insured, though the seller offered insurance as an option.  My experience tells me that while most buyers do not want to pay for their item to be insured, they very much want to get their item in the condition advertised.  So, I went looking for another solution.

Today I include insurance in my handling fee for every order.  If the item is a free ship item, I have already included the cost of insuring it in the price I am charging.  I insure every package through U-PIC because they will insure packages shipped by any carrier, to locations both domestic and international, and at a price significantly cheaper than USPS.  Insurance claims through U-PIC are less painful than through USPS as well. (See my guide on U-PIC for more details Sellers Are Responsible.)

In conclusion:

To keep my shipping costs as low as possible and give my customers the best value for their money spent, I:

• offer my customers multiple shipping options.
• charge a $1.25 handling fee for single items (domestic) – includes insurance.
• charge a $1.75 handling fee for combined shipments (domestic) –includes insurance.
• charge a $1.75 handling fee for single items (international) – includes insurance.
• charge a $2.25 handling fee for combined shipments (international) – includes insurance.
• offer free shipping on many items. (US only)
• offer free shipping on combined orders over $100. (US only)
• offer combined shipping of multiple items purchased and shipped together.
• display my shipping policies in all of my auctions.