What are the sellers costs and why do they charge so much for their products and for shipping?

We will attempt to answer these questions within this guide. 

We probably would not have understood why a seller charges so much for products and for shipping, until we became a sellers a few years back.  If someone charged an amount greater than the actually shipping, we thought they were making money off shipping and wouldn't purchase from them.  Now we know that is not true.  Many sellers come and go, but the ones that are smart enough to cover their shipping and handling costs, are the ones that stay around the longest.

Exactly what are the sellers costs??

First, they normally purchase items from wholesalers, liquidators or various close-out sales.  Most sellers can not compare with the prices at your retail stores because they most likely, are not buying direct from the manufacturers.  They most likely have paid more for the items than your local retailers pay (not always but many do).  Many buyers think of only purchasing from ebay sellers to get a bargain.  Yes, you can get bargains, but many times it is a hard working seller like ourselves, that are just trying to make a living.  Most of the time sellers have paid more for an item so they need to charge a little more for it.  Sort of like buying milk and bread from the local convenience store versus buying it at a large supermarket chain.  They can't compare with the prices of a large store such as Target and Walmart, which can reduce prices because they have purchased a large quantity. 

Shipping fees:  The United States Postal Service just recently raised their rates.  They also eliminated several services.  Many buyers may not realize that when the price of stamps go up, so do most of the other shipping services.

Domestic or United States shipping:  The shipping rates have increased so don't be surprised if your favorite seller has increased their shipping rates a little also.  Also insurance rates have increased.  An item under $50.00 before May 14th,  was $1.35 and now it increased to $1.65.

The International rates have really went up!  If the buyer wants registered mail, the fees went up from $7.85 to $10.15 and the priority rates have went up tremendously.  Registered mail provides the buyer and seller with a tracking number and a minimal amount of insurance.  It protects both people because the postal service carefully handles each item.  If you an item shipped priority mail, be prepared to pay $20.00 and up.  Global priority items do not have tracking.  If the item gets lost, the seller loses their money because paypal will most likely reimburse the buyer the entire amount.    

Handling fees: 

Ebay charges fees every time an item sells.  They also charge listing fees.  Since we sell mainly cosmetics, we will give examples from that.  If we list an item and it sells for $20.00, the ebay final value fees are approximately $2.00 on that one item.  It increases at about $1.00 per every ten dollars.  That doesn't include the amount that we had to pay to list the item.  Then paypal also charges fees. 

If the seller owns and operates a store, then ebay charges fees for that store too.  If it is a basic store, then the cost is only minimal each month.  If it is a pro store, then the seller is also paying a considerable fee each month to operate the store.  If the seller is a tax paying citizen, they also have to pay taxes to the government on money earned.

Paypal charges fees every time an item sells.  They charge fees for the entire sell, including the shipping fees.  That same item that sold for $20.00 also gets a fee of about $1.00, depending what the shipping costs are, but it is either a little less or more than a dollar. 

Packaging materials have also went up.  We are very careful when we package an item.  Mostly, we use a bubble mailer, a foam packaging bag and packaging peanuts.  We also have to pay for shipping labels and ink for our printer.  For the shipment of that $20.00 item, it costs us about $0.75 - $1.00 in packaging materials.

That means that the seller has already paid around $4.00 for that item in fees, before including the postal service shipping fees.  Most of our items are less than 13 ounces and we can ship them airmail.  It is almost impossible to calculate how much the shipping fees are at this point, since the rate varies by location and weight.  The particular item that we mailed and mentioned earlier, cost us $1.60 to mail  It had a total cost to us of $4.65 and that is without including any money to compensate for all the time we spent.  We only asked $4.50 shipping on this item, so we actually lost money on shipping.

We know of a young single mother that decided to open an ebay store.  She eventally went out of business because she didn't charge enough money to cover shipping and all the handling fees.  She also had to get a loan from the bank to repay ebay and paypal back fees.  This can happen to a seller very easily if they aren't careful.

In the future, before posting a negative feedback score to your seller for shipping fees, or giving them a low rating for shipping costs, take all the information above into consideration first.

Thank you for your time it took to read this guide.  We hope that it helps you understand why a seller seems to charge too much for shipping.