Shipping
I am fairly new to selling on eBay. I enjoy it but I find shipping fees challenging. I try to price my items fairly and then have customers pay flat rate shipping but I've had 2 complaints my shipping is high. But it's not! I've weighed and calculated cost. I use usps. eBay shipping says its cheaper, but once I include cost for the label it's about the same. Am I doing something wrong?
25 comments
gb58
·5 months agoCalculate not flat rate, and add a small handling charge to your shipping, it helps offset any under calculation.
Watch dimensions on really large items, it can really eat up any profits and turn into a losing proposition.
and use ebay shipping labels, don't take the boxes to the PO to have them print a label. You get a discount through ebay labels vs over the counter at the post office.
christworks
·5 months ago@byrdie_house I respect my follow sellers here, but I must wholeheartedly disagree with their advice to you that you need to change to calculated shipping.
Like you, I am on the coast - but on the opposite. Shipping from one coast or the other is harder, but shipping from the west coast is more challenging than the east coast. This is because the east coast has far more people than who live on the west coast. You also have many more potential buyers who live on the east coast, than on the west coast.
If you switch you calculated shipping, you will in effect shut off the largest part of your buying pool. Buyers like me (I'm in Virginia) will see the highest rates. So will buyers up and down the I-95 corridor and in some of the biggest cities in the country. Do you really want to shut those buyers out? Better yet, do those of you who have advised this new seller this well-meaning but poorly thought-out advice think they should do that? I'm telling you, that's going to happen.
I've done all three types of shipping: Free, calculated and flat. I switched to flat over two years ago and I've not looked back. Flat rate shipping gives you full control over what buyers see. You don't get that with calculated. I've suspected, but admitedly cannot prove beyond antedotal evidence, at times eBay shows a higher calculated rate at times.
I decided to test things to see if I switched to flat rate, would I have an overall increase in sales from west coast buyers. Now, like any A|B testing when it comes to eBay, you cannot do it in a vacuum. There is no way to do controlled testing, because there are far too many varaiables that we have no control over. Supply and demand constantly change across the platform, and within our own store. Those two factors are the biggest factors that determine whether you get sales.
When I switched to flat rate shipping to see if I saw improvement, I was honestly scared I'd see a huge drop off of buyers who were closer to me. The reality was I didn't. More importantly, I saw an increase in west coast buyers and I did it while keeping - and even increasing - the number of buyers closer to me. Again, there were other factors at play, but I have no doubt changing to flat rate shipping is one of the best decisions I made. It doesn't mean it will always work and I've had to tweak how I do it, which I'll get into in a moment.
Before I do that, I think for clarity I should explain my pricing strategy. Generally speaking, I price on the high end of the market, maybe 10%-20% above the market unless I am selling something that is damaged, missing pieces, etc., I'll price on the low end. I try to avoid listing those type of items if at all possible, and I have been known to toss them out altogether if I do not have more than a few dollars invested in them. In an ideal world, you buy stuff to flip that does not have damage.
Every item has a total cost that a buyer is willing to pay, but you have different classes of buyers and each class has their own max price. When I list, I try to think about what type of buyer I want to market to. Sometimes the item itself will dictate that. Sometimes it is an item that might appeal to a wide variety of buyers. Sometimes the eBay category I'm going to list in influences that. You and I can have the same item, in the same condition, but it could be legitimately listed in two different categories. One of those categories will almost always bring a higher price than the other one, because each category represents a different class of buyer. I want to appeal to the buyer who will pay more.
Let's say I've settled that the max price my item will bring for the buyer I'm targeting is $100. That is the out-the-door cost, not including taxes nor does it consider what an international buyer might pay to eBay since I'm enrolled in eIS. It's bascially the item price + shipping. Whether I present the item as $100 with free shipping (re: $0 shipping cost charged to buyer), $80 + $20 shipping, or $30 + $70 shipping, the amount the buyer will pay is the same.
Where I agree with the other sellers - and this is what some of them are hinting at - is you want to factor in buyer psychology. Most buyers, even my rich family members in Flordia, are going to take a second look if they see a $70 shipping cost on a $30 item or a $12 shipping cost on a $5 item. Again, if the item has low supply and high demand, that trumps everything and none of this matters. Over the last year, it has become increasingly difficult to make it worthwhile to sell items that have a total cost of $10 or less. In fact, I'd argue it is really at the point that $15 or less almost not worth it. I agree with those that a better stratgedy for lightweight, low cost items is to offer reduced or free shipping. I personally don't like free shipping, as I think it attracts the type of buyer I don't want, so I rarely use it. A reduced shipping charge is generally fine, I think, and this is one area where flat rate is fine.
You can use eBay's Shipping Rate Calculator to figure out what type of rates buyers will pay depending on their zones. If you aren't familier with shipping zones, this interactive map from PiriateShip is worth a look. I
tailored it for me and printed it out so I can look at it and quickly see the zones. You may want to do the same.
There isn't a big difference in USPS shipping rates when it comes to the 4oz and 8oz cutoffs. The price does jump at the 12oz cut off. What I did up until December for anything that weighs 8oz or less, I charge the Zone 8 rate, plus $1.00 for supplies and than 15% to cover eBay fees. I've tweaked what I do and I'll explain why by using today's postal rates in an illustration.
An 8oz package gonig to Zone 8 is $6.24, which becomes $7.24 when I had $1.00 for supplies. 15% of that is $1.09. That brings us to $8.33. Now you start seeing why I say items that have a total cost of $15 or less may need to be looked at differently. Not that you shouldn't sell those things, but look at how you can present things differently. I'm starting to lot more items like that up. It doesn't change the shipping cost all that much, but it does let me raise the item price some so that a buyer isn't looking and asking, "Why does the shipping cost more than the price of the item?" You have to remember, we ship stuff all the time so we are always focused on shipping and rates - average Joe and Joanna Blow don't know their postal clerk's shoe size like we might if we see them every day. There is some natural sticker shock when it comes to shipping, and it stands out like a bleeding thumb on lightweight, inexpensive items. It is less important when it comes to larger items, even if they are not expensive items. In fact, all that glassware you are selling, you do not want to offer free or reduced shipping on that stuff. That will signal to buyers that you may pack their breakable things haphazardly and they won't buy from you because of that reason. People buying Corelle dishes expect them to be packed well and thus expect shipping to be higher. (At least the buyers you want buying from you expect that.)
Similar to the 8oz cut off, I had multiple shipping policies to cover various weights and package sizes I use that are over 1 cubic foot. Up until last fall, I set my flat rates for each policy to the Zone 8 shipping cost + $1 +15%. To then determine the cost of the item, I would have in my mind what the max total cost my target buyer would pay, subtract the shipping cost, and that gave me my item cost. I round most prices to the nearest .95 cents to get the final item cost.
To help avoid the sticker shock, after the rate hike last fall, I started using shipping tables. This is a feature you can use when you do flat rate shipping. With shipping tables, you can set a geographical area and set a specific flat rate for that area. These can be a pain to set up, but by using these I've continued to use flat rate shipping with a high rate of success. For each shipping policy, my base rate is the Zone 4 price + $1 + 15%. This means buyers in zones 1, 2, 3 and 4, all pay the zone 4 rate. Then I have a Zone 5-Zone 6 rate, which is the base rate + the difference to the Zone 6 price. Finally, I havea Zone 7-Zone 8 rate, which is the base rate + the difference to the Zone 8 price. I'll post a couple of screen shots so you can see what I'm talking about.
The above image is my 3-4 pound shipping policy. The $9.00 base rate is what it would coast me to ship a 4LB 12x12x12 package to Zone 4 + $1.00 + 15%. That's how I got to the $9.00. (Side Note: I have not adjusted my prices since last fall and there have been additional rate hikes since). You will also notice I do not give buyers a choice on carrier, but instead offer them "Standard Shipping." This allows me to select any carrier I want. While my prices are based on USPS, sometimes FedEx or UPS are cheaper, and I like the option to go with them and make a little more money in the process. You do not get that option when you offer calculated shipping, but of course nobody told you that.
The above image is my shipping rate table. You will see I have bascially two groupings of states and parts of the states. The group on the bottom represents to a fair degree of accuracy what amounts to Zones 5 and 6 for me. The top group represents roughly my Zones 7 and 8. These groupings do not perfectly match the USPS zones and I will address that. This rate talbe shows that Zones 5 and Zones 6 pay $2.95 more than the $9.00 base rate, while Zones 7 and 8 pay $5.30 more than the base rate.
As I said, the rate table groupings and the USPS zones do not perfectly match up. Nor can flat rate shipping—whether you use a rate table or not—account for those circumstances when someone in a rural area purchases an item and you are charged more for the label because the delivery address is in a rural area. Calculated shipping is supposed to account for this; however, I’ve seen enough posts by other sellers here that I am not certain it always does.
None of that matters though. Far too often sellers get wrapped up in the mindset that they "lost money on shipping this item or that item." A far better mindset in my view is to take a big picture approach. I look at it through a monthly lens. I look at how much money did buyers pay to me in shipping and compare that to my shipping label costs. I'm on target if I "profitted" 25% more in shipping charges brought in than what I paid. That 25% covers my fees and my materials. This way I break even for the month, which is a great place to be when it comes to shipping. That 25% has been more around 20% recently, and that's because I've not raised my shipping rates. I am going to raise them, but not until after Memorial Day. Delaying my flat rate increase gives me an advantage over sellers who use calculated shipping, and thus it acts like a built-in sale.
I know this was long, but I really do not like the advice you were given by others, most of whom do not deal with the challenges we do by being being on the coast. I won't tell you don't try it, but do be watching what happens in terms of the number of buyers you have east of the Mississippi River.
One more thing. I brought up those Corelle dishes earlier and I want to talk to you about those since you are new. I strongly advise you to reconsider buying and selling those type of things unless you have thought-out how much money you will actually make. As someone who has sold those type of things more than a time or two, I will tell you that to pack those dishes correctly, it will take more materials and more if your time than you think it will. Let me set the table for you.
If I were to buy those, I'd pay $36.75 to you, including item cost and shipping. You can assume eBay will take 15%, but if you promote that item, you have to add the percentage of promotion to it. I don't know whether you promote, so we will stick to 15%. Fees will then be $5.51. That would leave you with $31.24. Shipping to me shows $22.75. That sounds like a very reasonable label cost to me, so I'm going to use that. Once the label cost comes out, you will be left with $8.49. Your materials could easily cost $2, maybe $4 as those dishes will need to be double-boxed. It is conceivable you might make only $5 on that sale.
Keep in mind there is a time cost. Let's say it took you ten minutes to fully list those dishes. We will assume the dishes were clean and you didn't have to clean them. To correctly pack those dishes, it would take me at least 10 to 15 minutes. You can't just toss some bubble wrap over them and ship them off in a box. They will break. Each piece has to be wrapped, they need to sit inside the boxes so they do not bump against each other, filling has to be added, the box sealed, and then you will need to put that box into another box and fill in the empty space of that box before taping it up. If you aren't used to packing things like that, it could easily turn into a 30-45 minute job. Next thing you know, you spent an hour on something you made $5 on.
Even if all your materials were free and you made $10 on it, that is a low hourly wage. This also assumes you sell those for at least your asking price. I dare say we all have done this a time or two, and believe me we kick ourselves for getting sucked into those type of items. I think I have finally rid my store of those lower value, larger breakable items because they are such a pain. It would be different if we were talking about a $80 casserrole dish, so it is relative. This is a little sidestep to encourage you think about what you are listing and the time involved and compare that to how much you will make.
adamcartwright
·5 months ago@christworks
Holy cow... 🤣
byrdie_house
OP5 months agoThank you so very much for passing on your info. You touched on so many of the situations I have been experiencing.
I love how you incorporated all the zones and fees in your price calculations. So do you post your shipping table on your eBay store so buyers can see what the shipping cost will be? I might have missed something there.
and you hit the nail on the head regarding the profit margin of the corelle. Your comment was most helpful for my specific situation. Thank you again so much
christworks
·5 months agoYou are welcome.
No, there is no need to post the shipping table in the listing. eBay will automatically apply the correct shipping based on the zip code the buyer is having their order shipped.
shire123
·5 months ago@christworks
I'm going to chime in and agree completely with christworks. I believe his rationale is sound.
I only charge a flat rate for shipping as I have been in this long enough to have a feel for what the postage will cost. I have my business shipping policies set at various flat rates and choose what makes the most sense. Now I live in the center of the country so maybe that makes things a bit easier. At this point I would say 80% of my flat rate shipping is essentially right on. 10% I might lose on (shipping to Alaska). And the other 10% the shipping seems excessive (shipping something to the next state over). In those cases I refund an excess amount.
I just don't see myself ever using calculated shipping. I sell lots of different items of different sizes and weights. I don't have room to keep boxes of the right size for all those items. And essentially I have saved myself the work of setting up the calculated shipping for all those items. Even if you set it up ahead of time, you would need to verify that your dimensions/weight are correct at the time of shipping. Double work as I see it.
For items that I collect, I often see calculted GA shipping costs of over $100. I skip those listings because i KNOW that they can be shipping for 50% less. So those sellers have eliminated buyers like me who readily will buy their items.
So now we may have confused OP. Honestly, for some listings it may make sense to use calculated shipping. But then there are definitely situations that flat rate would work best. OP needs to work out what works best for them. Both methods can work.
byrdie_house
OP5 months agoThank you. I agree it seems to work for me most of the time
caldreamer
·5 months agoLuxology 70s Style Romantic Midi Floral Boho Wrap Dress W Flounce Sleeves Sz 12 (postage seems very high, I live nearby in Dublin, California and it shows shipping cost of $11.75 for this dress. This seems very high for a lightweight dress.
I checked your listing (for that same dress) and postage is still $11.75 even if shipping to NYC. That means your postal rates are FLAT RATE (you assigned) and not based on actual "weight & measures & zip code".
With CALCULATED SHIPPING customers pay a different amount (based weight/measurement/zip code).
To correct EDIT your listings and click on CALCULATED SHIPPING (Ebay will automatically charge the customer the correct shipping based on weight/measurement/zip code).
byrdie_house
OP5 months agoYes the shipping in those instances were based on USPS flat rate small boxes. The price has gone up but I haven't adjusted on my listing. As I stated I try and price my items at a low enough price that it balances out with shipping. Most of my buyers are quite happy but since shipping seems random It needs to be corrected
adamcartwright
·5 months ago@byrdie_house
Well how do you arrive at the flat rates, given you're in California and ship nationwide?
byrdie_house
OP5 months agoUsps have small, medium and large flat rate boxes. So regardless of weight if it fits in box it ships for that price.. So in the beginning I undercharged on shipping a few times and decided to do flat rate on certain items. But it comes off as backward with shipping being higher the the item. One reply suggested switching item price and shipping cost. As far as est. flat rate shipping for buyer through eBay I weight item and use USPS shipping calculator with farthest zip from Cal.
1786davycrockett
·5 months ago@byrdie_house
"Usps have small, medium and large flat rate boxes."
Those USPS flat rate boxes are ONLY for USPS Priority shipping -- NOT for regular USPS Ground Advantage shipping.
If you use USPS Priority flat rate boxes, but only charge USPS Ground Advantage shipping, your buyers are in for a BAD surprise -- since USPS will charge them for "insufficient postage."
USPS Ground Advantage is normally cheaper than USPS Priority Flat Rate -- so you should definitely stop using those flat rate boxes.
adamcartwright
·5 months ago@byrdie_house
The flat rate boxes are for Priority Mail.
Why are you shipping by Priority instead of the less expensive Ground Advantage?
Ground Advantage is a great way to ship most items. It even includes up to $100 insurance now.
mcw1627jed
·5 months agoHave you seen what the cost of those flat rate boxes are now? Unless your shipping lead makes no sense now.
byrdie_house
OP5 months agoYes typically I only use usps flat rate if it is a heavy item.
kibble-net
·5 months agoUse calculated shipping + a reasonable handling fee.
Make sure dimensions and weight are accurate, round up a bit to be safe.
If anyone complains about the cost of shipping, put them on your "Best Buddy List". It's something outside your control, you need not take it personally.
byrdie_house
OP5 months agoYes! I saw that you could add a handling fee. I guess I thought if shipping was a couple a dollars over that would be my rationale. I will do it " officially." Thank you
puggybelle
·5 months agoHi, you have some really interesting items. Perception is everything though. Some of your items cost less than the shipping does. I think you should work on that. Reverse it. And the items you have that are the smallest and lightest in weight are definitely leaning very expensive in the shipping quote. That being said, the cost of shipping is outrageous and we're all trying to figure out how to manage it without losing our shirts. Wishing you success!
byrdie_house
OP5 months agoThank you so much for the suggestion. I thought about as well. I'll give it a try!
ten_o_nine
·5 months agoI agree with @puggybelle
Buyers hate paying $15 shipping on a $10 item. It feels like they're paying for a service rather than a product.
Lower your shipping fee and add that amount to your item price. A $20 item with $5 shipping sells faster than a $10 item with $15 shipping, plus it will make your items look more premium and less like a shipping trap. Most people would rather overpay for an item than overpay for a cardboard box!
byrdie_house
OP5 months agoGreat perspective! I never thought of it that way. Thank you
chapeau-noir
·5 months agoYou get commercial rates shipping through eBay over counter price from the USPS (premium price) - not sure what you mean by 'cost of the label' - I know there are supplies costs to account for, but for instance, I see a little summer dress that I could ship to your zip code for about $7.50 shipping to my zip code for $16.25.
reallynicestamps
·5 months agoDon't use Flat Rate Shipping,
First because Calculated means you will not lose money on sales to distant locations.
Second because, emotionally, Calculated feels more "official".
And that means fewer complaints about the shipping fee.
EBay has negotiated discount rates for labels with USPS, UPS and FedEx. Sometimes the discount is quite small, but it is there.
Also some people cannot be satisfied. Block those. The transaction will not get better.
byrdie_house
OP5 months agoThank you, I'm sure it will get easier
byrdie_house
OP5 months agoThank you so much for the insight. I am learning things from all of you that never occured to me. Again thank you