Someone wrote a guide that said sellers should NEVER charge a handling fee. This is my rebuttal.

If a seller is cleaning out Grandma's attic, hopes to make more profit than they would at a garage sale, has access to a furniture store giving away free bubble wrap, lives within a mile of a post office, etc., and feels capable of giving customers what we call ACTUAL SHIPPING--in other words, charging no more for shipping than the seller must pay to ship the item at the post office window--I salute that seller.  This is a great policy. The buyers will love it. 

But if you are a seller who is running a business, who must buy wholesale goods to resell  and/or who receives many small orders, you probably won't be able to maintain an Actual Shipping policy for very long.  The constant search for free packaging materials will wear you out unless you are receiving goods in the mail every day.  Even then, did you ever try to recycle TAPE?  Uh-uh, darlin', it will not stick.

I do charge a handling fee and the fee varies depending on the merchandise. I came by my fee structure honestly.  I added up what we spend on tape, boxes, bubble wrap, etc. in the course of a year and divided that dollar amount by the number of packages we ship in a year.  This was a few years ago and the result was $3 so I began charging a $3 handling fee.  I have since streamlined the business and now usually charge $1 or so.

There are some variables I take into consideration.  When I wrap a handmade stone castle that requires a lot of TLC and bubble wrap, I will usually charge a higher handling fee.  The more fragile an item, the more likely I am to charge up to $5 for packaging.  I don't go over $5 yet I know there are people who charge more than that. If I order from someone who charges more than $5 for handling, I assume they have their reasons and I will generally accept their judgment. But once I ordered some toiletries for which I paid a $10 handling fee; the two plastic bottles arrived in a Tyvek envelope without cushioning. That, my dears, is just plain wrong. But I digress.

One variable that kills your budget is the tendency to receive small orders.  If you always ship orders that weigh over 13 oz., you need Priority packaging and you can get that free from the post office.  But if you sell lots of breakable glass beads, requiring a small bubble mailer and maybe an extra layer of bubble wrap just to be safe, you must pay for those bubbles yourself and those things can be expensive.

Here are some of the expenses I consider when I calculate a handling fee:

• $27 or so for a six-roll pack of cheap, clear packaging tape.  The stronger kind of packaging tape costs much more.  Strapping tape is even more expensive. And please do not even think about using masking tape. It falls off in the mail. Ditto for "scotch tape" unless you use the old-fashioned, hard-to-find, very shiny scotch tape. It's usually sold in a red plaid carton or package.  Not the green plaid; that is "magic disappearing" tape and that is fine for wrapping a birthday present, but not for mailing packages.  Tape is a big issue. I use tape on everypackage I mail. The cost for one of the components used to make packaging tape went up a few years ago and therefore the cost of tape rose.
  
• $3 to $4 for a ream of printer paper.  Recycled is cheaper but thinner.  I use paper for printing mailing labels off my computer.
  
• $15 to $49 for a pack of 25 bubble wrap mailers for books and blank journals. The biggest of such envelopes can cost almost $2 each, but they are more durable and stable versus brown kraft paper over bubble wrap.  I use first class plastic or Tyvek envelopes for yarn and the latter is pricey but if you ship yarn in a paper envelope, the envelope can break open, the yarn can roll out, the package can get wet and ruin the yarn and so on.  Sometimes I use two manila envelopes, one over the other for strength, and use extra tape.  Depends on what I'm mailing. I have had a very high success rate with my packaging--and by that, I mean, minimal complaints come through--although once in a while someone will tell me I over-package.
  
• Up to $3.05 for a cardboard box. Fortunately, we usually avoid that cost by either recycling the boxes that come into our home or by using Priority Mail boxes that the post office provides free of charge.  By the way, I have had dozens of eBay customers insist on Parcel Post rather than Priority Mail because they think it will save them money.  Surprisingly, Parcel Post might raise the packaging fee, might cost the same or even more in shipping, might save them only 38 cents, and/or take up to three or four weeks to arrive.  Sometimes I patiently explain this to the buyer and they understand and they trust me.  Other times, I write up an invoice for them showing the Parcel Post option as legitimately higher than the Priority option and just let them choose. Heh  Okay, I'm a smart-aleck.  I admit it. 
  
• 26 cents per square foot for bubble wrap.That sounds cheap until you realize how many square feet it takes to cover a birdhouse or whatever.
  
• $20 a bag for loose fill packing peanuts.
• Around $20 to $75 for one or two printer ink cartridges, depending on type, brand, quantity, etc.  Long story on this one.  I find that recycled ink cartridges either burn out more quickly or do not work at all. That's just my experience.
  
• $16 a month to have an ebay store although I have since closed it.
  
• About $60 a month to list 500 inventory items in my eBay store, whether anything sells or not and nothing is likely to sell unless (a) I list 500 or more items and (b) I also run auctions.  Note that this $60 estimate changes somewhat depending on whether you use gallery photos, list items for under $25 versus over $25 and/or you are a powerseller.  These fees have changed for me since I now list much more of my merchandise on other web sites.  But those other web sites also have fees.
• Commissions to the web site if something sells, depending on which site we're talking about.
  
• Another commission to Paypal and I realize many people are not fond of Paypal, but for a seller, it is a godsend because it eliminates a lot of bookkeeping.  If I must spend time on bookkeeping, that is time I could have spent find, creating, investing in or shipping merchandise.
  
• $10 a month for a business checking account.  I forget the cost for blank checks.

        The worst expenses of all are the computer hardware and software. Since beginning this business, I have had to replace my computer once and my camera and printer twice.  My funky old monitor is still hanging on.  I use McAfee, file back-up services, Comcast, a Yahoo website and picture hosting, etc. It's a lot. In fact, I grow disgruntled writing this, so I will stop for now.

No, wait, a word about the post office.

Travel to and from the post office varies in cost. It was a huge eye-opener for me when I learned about a seller in an urban area who must take packages to the post office by bus. What a hassle!  I can just see him making his way down the aisle of the bus and banging each and every knee with his humongous shopping bags filled with packages to mail.  Do you think that seller is making a ton of money and should absorb the cost of bus fare? Most buyers would say, "Yeah!" Well, be careful what you wish for.  If that seller IS absorbing the cost, he may go out of business soon if he's not careful. I sure hope you didn't like his merchandise too much, since it may not be available next year.

I have been getting my packages picked up off my doorstep for years now and love the convenience of it.  The one type of package the USPS will not pick up is International First Class, which saves customers money, but actually costs the seller more in terms of time, money and effort. I rely on someone to take those in for me and I cannot necessarily get these mailed within 24 hours.  Are you thinking, "So what? I live in Australia, and I will not pay for faster Priority mail!"  No, you are not saying that because my Australian customers are super nice and patient and are happy to pay whatever it takes for shipping.  Since 2003, I have never had a disgruntled Australian customer.  They trust me.  They say "cheers!" a lot. And if I offer to save them money by using First Class, they wait patiently until I can get someone to take their package in.  Bless those Aussies!

But my point about package pickup and post office visits is this:  just because it is easy for me or for you to get to the post office doesn't mean it is easy for everyone.  Just because your post office is close by doesn't mean some seller in North Dakota isn't having to drive 20 miles round trip.  So sellers, please take this into consideration when you set up your online business.  And buyers, please cut your seller some slack when you are thinking, "Just take it to the post office! What's the big deal?" Your life in your town and your gasoline prices are not the same as everyone else's. 

And did you ever consider that a number of buyers and sellers are disabled?

Any seller who is running a business must pass part of the cost onto the buyer and this is just obvious.  How you pass the cost along is up to you. But if you don't do it, you will go out of business.  Be honest, pass along whatever cost seems fair, apply the cost to the merchandise or the shipping or both, hope people like your products enough to pay a decent amount for it and then....then bite your lip when someone gets snippy.  Sometimes a customer places a large order with me and the shipping calculator goes through the roof.  I take pleasure in giving that person a hefty rebate. Often they appreciate it and often that is the best I can do for them.

dj runnels

Life's an Expedition