How do they make money with free shipping?

[crazycool71]

Ok, I am looking at a $3.40/CD with free shipping. Ebay will first take 10% from $3.40 which is $0.34 add that to the $3.19 shipping. That's $3.53 already!!! What about the printer ink? the packing materials? And the CD is sold for $3.40? I'm blown away. Time and money wasted!

Do they get bulk shipping label discounts? Enlighten me please.

Please don't say FREE SHIPPING is due to stolen credit cards. I offer free shipping too but that is already included in the buy it now or auction price.

[duncanvr]

If they do anything like me the free shipping is calculated in overal prices of other higher priced items, the cheaper items are there just to find more buyers. Also high volume sellers do free shipping with low prices on some, you still make money over all. What's important is the end of month profit the seller makes. And buyers who get a bargin from such sellers often come back to the seller for more. It all ads up at least it does for me. Oh I don't use labels I mail with postage stamps. Maybe that seller don't use labels either.

[lepke1979]

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@crazycool71 wrote:

Ok, I am looking at a $3.40/CD with free shipping. Ebay will first take 10% from $3.40 which is $0.34 add that to the $3.19 shipping. That's $3.53 already!!! What about the printer ink? the packing materials? And the CD is sold for $3.40? I'm blown away. Time and money wasted!

Do they get bulk shipping label discounts? Enlighten me please.

Please don't say FREE SHIPPING is due to stolen credit cards. I offer free shipping too but that is already included in the buy it now or auction price.

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The hope is probably so you'll buy more than one thing to make the shipping worth it. But they most likely have a heavily discounted shipping rate by pre-sorting it for the post office or some other carrier. There is also the chance the seller is foreign. Might say it comes from Kentucky, but actually China. And they may still subsidize shipping there.

[chapeau-noir]

Thread last week with chat about this.

Media mail costs the same whether one uses stamps or an ebay label (except you don't get tracking as far as I know) as a CD can't go letter post as far as I know (too thick).  

[richard1rst]

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@crazycool71 wrote:

Ok, I am looking at a $3.40/CD with free shipping. Ebay will first take 10% from $3.40 which is $0.34 add that to the $3.19 shipping. That's $3.53 already!!! What about the printer ink? the packing materials? And the CD is sold for $3.40? I'm blown away. Time and money wasted!

Do they get bulk shipping label discounts? Enlighten me please.

Please don't say FREE SHIPPING is due to stolen credit cards. I offer free shipping too but that is already included in the buy it now or auction price.

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In addition to the above, based on some comments I have seen on these boards from (obviously inexperienced) sellers, there seems to actually be sellers who BELIEVE that there really is “free shipping”.

I have seen comments from sellers who were absolutely Stunned, BEWILDERED and absolutely FLUMOXED that THEY were being charged for the shipping and asking why THEY were being charged for shipping when they listed it as “free shipping”.

For example, follows us a direct quite from a poster who I will not name because it is not my intention to embarrass anyone. But it does show the inexperienced knowledge

QUOTE

I am trying to figure out why my listing shows "you pay" when it should show "free shipping".  I have tried every perturbation in the listing to get "free shipping" to replace the "you pay" phrase and nothing works.  Is this some new software problem?

[katzrul15]

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@crazycool71 wrote:

Ok, I am looking at a $3.40/CD with free shipping. Ebay will first take 10% from $3.40 which is $0.34 add that to the $3.19 shipping. That's $3.53 already!!! What about the printer ink? the packing materials? And the CD is sold for $3.40? I'm blown away. Time and money wasted!

Do they get bulk shipping label discounts? Enlighten me please.

Please don't say FREE SHIPPING is due to stolen credit cards. I offer free shipping too but that is already included in the buy it now or auction price.

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Might be a loss leader to draw sales.  Likely obtained the CD for pennies.  Typically a bulk shipping rate well below where you or I can ship it.  There is a shooting star book seller who does this also.

Typically the condition/quality is not on par.  You get what you pay for.

[bbravo65]

...Media Mail has tracking number when label was purchased from either PO counters or self-service kios (as I shipped book to my niece in Florida)...

...and I have seen peoples shipped CD with Flat Rate Envelope post that lead to Postage Due...

[southern*sweet*tea]

If this is one of the mega sellers like Thriftbooks, they purchase books, CDs and DVDs by the truck and train car load for literally pennies each.  They get huge shipping discounts due to the volume they ship (thousands per day) and they presort by zip and palletize the shipments, saving the carrier a lot of money. I'm not sure what their rate is, but probably $1 or less per package I would guess. 

They also make money with multiple purchases. I buy all of my personal reading books from the Thriftbooks  website because you get points for free books there.  I never buy only one book, I usually will buy three or more at a time.

[luckythewinner]

Ok, I am looking at a $3.40/CD with free shipping. Ebay will first take 10% from $3.40 which is $0.34 add that to the $3.19 shipping. That's $3.53 already!!! What about the printer ink? the packing materials? And the CD is sold for $3.40? I'm blown away. Time and money wasted!

IMHO it is foolish to look at a single item and try to make generalizations about a seller's entire business model. 

It is quite possible that your initial premise is incorrect - that the seller is not expecting to make a profit selling individual items. 

Some sellers are willing to break even on individual sales because they know that most of their buyers will purchase multiple items.

If a buyer purchases three CDs from the seller in question, all of a sudden that seller is getting $10.20 for that same shipping costs as a single CD which is clearly profitable. 

If a seller gets 5,000 sales and make $50,000, does it really matter if he made a little profit on all or them, versus losing money on some of them and making big money on others? 

[savinghumanity1childatatime]

depending who you ship with there are programs that if you ship certain amount, you get very great rates. I use ups innovations, as long as i ship 600 pcs per week i pay $2 per shipment economy 

[savinghumanity1childatatime]

this was genious to say. Look many of us buy stuff in bulk. so it is not about how much money each single item makes and does it cover shipping, it is strictly about if the lot covers its cost and shipping. So if i paid 300 for 5000 pcs of clothing, and i sell them each for $5 free ship with no teetering in any price point then maybe it would stand to reason i am in a losing gave, but one shirt may sell for $1 but another for $100 - I say start your auction at the shipping rate plus $1 if you are insecure, if you know you have a hot item, let your customers have fun bidding away. Research your stuff thats how you find out the model you need to use;

[toysaver]

"How do they make money with free shipping?"

Perhaps they were looking out the window and daydreaming during third grade math.  Perhaps their brain isn't wired to do math.   This does not mean they are stupid, just other skills dominate.  Also not everyone is here to make money.  They just want to clear out and keep things out of the landfill.

[dbfolks166mt]

In addition to the above, based on some comments I have seen on these boards from (obviously inexperienced) sellers, there seems to actually be sellers who BELIEVE that there really is “free shipping”.

I have seen comments from sellers who were absolutely Stunned, BEWILDERED and absolutely FLUMOXED that THEY were being charged for the shipping and asking why THEY were being charged for shipping when they listed it as “free shipping”.

For example, follows us a direct quite from a poster who I will not name because it is not my intention to embarrass anyone. But it does show the inexperienced knowledge

QUOTE

I am trying to figure out why my listing shows "you pay" when it should show "free shipping".  I have tried every perturbation in the listing to get "free shipping" to replace the "you pay" phrase and nothing works.  Is this some new software problem?

When it comes to those sellers you can't fix stupid. 

[yuzuha]

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@savinghumanity1childatatime wrote:

this was genious to say. Look many of us buy stuff in bulk. so it is not about how much money each single item makes and does it cover shipping, it is strictly about if the lot covers its cost and shipping. So if i paid 300 for 5000 pcs of clothing, and i sell them each for $5 free ship with no teetering in any price point then maybe it would stand to reason i am in a losing gave, but one shirt may sell for $1 but another for $100 - I say start your auction at the shipping rate plus $1 if you are insecure, if you know you have a hot item, let your customers have fun bidding away. Research your stuff thats how you find out the model you need to use;

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Yep. A couple of years back I bought an entire garbage bag of NWT stuffed animals at a rummage sale for $20. I sold one of them for $20, so when I list the rest, they're all going to be pure profit because I already made my money back in that one sale.