Are Your Shipping Policies Costing You Profits on eBay

How you ship and what you charge can have a negative or positive effect on your eBay sales.

There are several issues related to shipping on eBay that affect your sales.  Let’s look at them one-by-one:

  1. Overcharging for shipping.  I am a big believer that you should not make make shipping and handling a profit center.  Despite efforts and new rules on eBay there are still some people who try the tactic of selling something at a low price and make up the margin by charging excessively for shipping.  This is a bad move for two reasons: First a lot of bidders see this and won’t bid. Second, eBay has a link at the bottom of every listing that says report this auction. When someone clicks on this link, one of the items they can report is excessive shipping. If eBay looks at this and agrees, they will cancel your listing.  If you get a lot of these in a short time they will suspend your account.
  2. Not explaining your shipping policy. I was surfing eBay over the weekend and and found an item I really wanted to buy.  It was being sold by a fairly new seller (20 feedback).  She did not state a shipping cost and did not offer calculated shipping.  I sent her an email through eBay which she never answered.  The auction ended at 7 AM this morning (not a great time to end auctions by the way) with no bids.

    eBay bidders are mostly pretty savvy people and they really want to know how much it will cost to ship an item before they place a bid. If you use calculated shipping then say so.  If you charge a fixed price put it both in the eBay shipping item box AND state it again in your listing.  I also like to say how I ship: Mail, parcel post, UPS, Priority Mail, etc.

  3. Excessive handling charges. Shipping supplies cost money.  It is true that there are a few eBay buyers out there who get upset when they get a package and see they were charges even more than a penny more that the shipping actually cost.  But in fact most people are reasonable –especially if you explain this to them.  If you add a handling charge to your shipping cost you should explain that in your auction description. 

    A typical statement might look something like this:

    We ship every business day.  We pack each item carefully so it will arrive in good shape.  This means we have some costs for boxes and shipping supplies.  We don’t try to make money on shipping, but we do charge the actual shipping cost plus $1.00 to cover the cost of these materials.

    By letting people know your policies up front you will avoid a lot of questions and/or surprised customers.

  4.  Fixed versus calculated shipping.  If you are shipping something heavy (over 10-15 pounds) then I always recommend using calculated shipping.  This is because once you go up in weight, the variables between methods and distance become quite expensive.  But on lower weight items, I recommend you use a fixed shipping cost. 

    The reason for this is that your shipping cost is displayed right next to the current bid price of your items when people do a search.  I have tested this extensively and my listings with the shipping cost displayed get more views (hits) and more bids than ones with calculated shipping where the cost is not displayed.

    When you do this the problem is that you don’t know the shipping cost because you don’t know where the item will be shipped.  I live on the West coast.  It costs more to ship something to Virginia than it does to Oregon.  So here is what I do:

    I calculate the cost from Washington State to St. Louis, MO which is about in the middle of the country.  Now on orders to the East Coast I lose a little money. But on orders to the West Coast I make a little money.  Obviously if you live in the middle of the country you are in the best position.  Just calculate the cost to either coast and you will break even on most shipments.  On the few that go to the mid west you will make a little bit.

    The amount of difference is not that great that people will get upset at being overcharged. But in some cases I will actually give people a small refund.  For example if someone buys something from right here  in Seattle they might feel overcharged so I just send them a little bit of money via PayPal and explain that I had calculated shipping incorrectly for them and am giving them a small refund.  Even it this amount is less than a dollar, I always get a nice note back thanking me and usually get a glowing feedback comment for doing this.

  5. Use good quality materials.  No one likes to get their treasure in an old crummy and dirty box with your local newspaper in it.  It was back in 1999 but I still remember the very first item I bought on eBay arrived in an old cereal box and it still has some of the cereal crumbs in the bottom of the box.  Obviously I wasn’t impressed.

    It is OK to use recycled or used boxes if they are in really good condition.  One place I like to get boxes is from our local gift shop.  They get tons of boxes that they have to pay to recycle.  They gladly give them to me along with the bubble pak and Styrofoam peanuts.  But I always look at them very carefully and throw out the ones that are beat up or dirty.

    If you purchase new shipping supplies it costs money for the seller to ship them to you.  So in my case I always look for sellers on the West Coast.  I can often get a bargain from some seller in Florida, but I lose all of the savings on the cost to ship the stuff to Washington State.  So look for suppliers near you.  If you buy from the same sellers, they will often give good discounts to repeat customers.

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