Do not have the buyer pay for shipping--MAXIMIZE YOUR PROFIT BY OFFERING FREE SHIPPING
PROVIDE FREE SHIPPING BUT PURCHASE THE DISCOUNTED SHIPPING LABEL THROUGH EBAY:
Ebay gets a commission from the final total of the sale, which includes final price + sales tax + amount the buyer paid for shipping. (The commission on sales tax is straight **bleep** if you ask me, but that's a whole other topic.) That means that even though the buyer is paying you for shipping, you are actually losing money since they've taken a cut of the shipping fee while still making you buy the shipping label for the full amount after.
For example:
BUYER PAYS SHIPPING:
13.25% commission from the a $10 shipping fee ebay collected = -$1.33
$10 shipping fee purchased off ebay = -$10
TOTAL COST TO YOU = $11.33
vs
FREE SHIPPING:
$10 shipping fee purchased off ebay = -$10
TOTAL COST TO YOU = $10
Stay up.
iamalwaysright
·2 years agoYou forgot something in your comparison if you truly give free shipping and don’t add that cost to your item price. I added it in red.
I’ll take the buyer pays shipping scenario any day. “stay upâ€. ➕➖✖ï¸âž—🟰
This post has got to be a troll, right?
buyselljack2016
·2 years agoor just confused, it happens
monster-deals
·2 years agoI've been trying to ship free for over 2 decades but USPS always insists I pay them.
stephenmorgan
·2 years agoI have had that same problem. Do you think Congress has any Laws in the works to fix this? It is so unfair.
chapeau-noir
·2 years agoI see some funny math.
 
broto_64
·2 years agoI've known free shipping being superior for a long time, however in my case these reasons apply:
1. All-in-one price
* Certain search engines do not display the full price but only the item price, click on that and then find out the shipping frustrates some buyers who would rather have the whole price upfront.
2. Better search placement.
* For buyers using advanced search, ticking off the "Free Shipping" box...
3. Required for TRS+
* 2% discount on FVF's, plus advanced seller protection features.
By the way...
The buyer pays for shipping one way or the other.
sapphire_studio
·2 years agoI have free shipping but I will correct you and tell you you don't need free shipping to get top rated plus status. Only free returns (and 1 day handling).
pjcdn2005
·2 years agoAs @sapphire_studio mentioned, a trs seller is not required to offer free shipping in order to have the trsplus badge on a listing. They do need to have same day or one day handing and free returns.
reallynicestamps
·2 years agoThe "exact postage" will bite the seller every time.
We have "handling"costs in packing materials, time,and Cookie Jar Insurance (a tiny amount set aside in a virtual cookie jar as self-insurance against whatever).
Remember if you use Flat Rate or Free Shipping to allow for those costs.
If you purchase discounted labels on eBay or elsewhere, the discount covers the handling costs.
laststopgeneralstore
·2 years agoI mean if your charging the exact amount that it costs to ship the item then it's your fault your losing money not eBay's.
fern*wood
·2 years agoIn your first simplified example the total cost to you should have read $1.33 because the buyer pays the $10.00 postage. In the second example the total cost to you is $10.00 because you pay the postage.
dbfolks166mt
·2 years agoFirst and foremost there is really no such thing as "free shipping" somebody pays for it. To recover shipping costs, so in essence the buyer pays for the shipping, presents some challenges if you live on one of the coasts. I am on the east coast so to use free shipping I would have to calculate and factor in the worst case shipping cost which is to the west coast, that will soon change with the USPS addition of zone 10. That high cost of shipping being built into the cost of the item and offering free shipping puts my east coast and mid-west buyers at a disadvantage since they would be paying more than they needed to since the max shipping cost was built into the price of the item with free shipping. As an example for your following item which is using calculated shipping if I was in LA the shipping cost to me as the buyer would be $7.15 for priority mail which you have selected, ground advantage would probably be cheaper. However I am in Virginia so the shipping cost to me would be $20.43. If you are using free shipping which cost are you building into the items price?
Item with shipping cost to LA, California
Item with shipping cost to Annandale, Virginia
The ONLY time I will use free domestic shipping is when I know there is no variance in the actual shipping cost regardless of where the buyer is located. This usually is for heavy items that go into USPS flat rate boxes or envelopes. The rest of the time I simply use calculated shipping which is based on the buyers location.
retro_entertainment_collectibles
·2 years agoYes there is such a thing as free shipping but 98% eBay sellers dont understand a lick of it. Staples offers free shipping, its free, no cost added. TRULY free shipping offers an immediate line item write off, thats the big difference. Its an immediate promotional level deduction against sale revenue. Most small guys cant afford do that but the big boys can and it offers them significant competitive advantage as consumers view shipping expenses as a complete loss, a waste of their money. Those who bump price adding in shipping have the result of a higher priced product than that of the total of truly free shipping with the immediate line item write off.
I can go to BestBuy order a 55" TV thats on sale $120 below MSRP right now, its not available in stores in my region and will be shipped to for free via UPS. Free is free, it means free and BestBuy will do a line item write off on actual shipping expense. It's not retailers abusing the term "Free Shipping" or even those who actually offer free shipping here at eBay doing the line item write off. Its those who are saying they ship free but instead add the price into the product, thats not free, in fact, its misguiding the consumer.
For example, if I bought video games lets say from Ingram and they lay down price point which they do, $59.99 and I add $8 shipping to that thus $67.99 and claim free shipping I've actually defrauded the consumer if they cared file complaint with say State Attorney General as what I've done does not make it free. The definition of free in commerce is "No additional cost to consumer." Thats the law.
Now if I actually offer free shipping, I am getting $59.99 and if actual shipping cost is $8 that's an immediate line item write off and there is significant advantage to that in whats declared.
dbfolks166mt
·2 years agoYes there is such a thing as free shipping but 98% eBay sellers dont understand a lick of it. Staples offers free shipping, its free, no cost added. TRULY free shipping offers an immediate line item write off, thats the big difference. Its an immediate promotional level deduction against sale revenue. Most small guys cant afford do that but the big boys can and it offers them significant competitive advantage as consumers view shipping expenses as a complete loss, a waste of their money. Those who bump price adding in shipping have the result of a higher priced product than that of the total of truly free shipping with the immediate line item write off.
It's smoke and mirrors so to speak. As I stated somebody always pays for the shipping and it is always a line item write-off against revenue. I would guess, which is what you are doing, that 98% of sellers do understand that but 98% of buyers don't.
I can go to BestBuy order a 55" TV thats on sale $120 below MSRP right now, its not available in stores in my region and will be shipped to for free via UPS. Free is free, it means free and BestBuy will do a line item write off on actual shipping expense. It's not retailers abusing the term "Free Shipping" or even those who actually offer free shipping here at eBay doing the line item write off. Its those who are saying they ship free but instead add the price into the product, thats not free, in fact, its misguiding the consumer.
I would also be willing to guess than even Best Buy has factored their "free shipping" write-off into their profit margin. The fact that the TV sells for the same price in the store or shipped simply means they both have the shipping cost built into the price. How do you think the TV got to the store in the first place?
For example, if I bought video games lets say from Ingram and they lay down price point which they do, $59.99 and I add $8 shipping to that thus $67.99 and claim free shipping I've actually defrauded the consumer if they cared file complaint with say State Attorney General as what I've done does not make it free. The definition of free in commerce is "No additional cost to consumer." Thats the law.
But you haven't "defrauded" the consumer. They paid $67.99 and there was no additional cost to them for the item other than the sales tax that got added on. Not sure how your complaint with the Attorney General went but I doubt any action is going to come of it. Be interested to see the "law" at both the Federal ad State level if you can provide it.
Now if I actually offer free shipping, I am getting $59.99 and if actual shipping cost is $8 that's an immediate line item write off and there is significant advantage to that in whats declared.
If your profit margin is such that you can do that then sure any seller or company can eat the loss but it is still not "free shipping" they are still paying for the shipping. Even Amazon has line-item write-off's that probably total into the hundreds of millions for its free shipping and its own corporate logistical operations.
chapeau-noir
·2 years agoI get it, some markets "free" shipping just works better - I use it myself, but it's "shipping included".
But I agree ^^ "smoke and mirrors" is exactly what "free" shipping really is and I think most sellers understand that. If they want to bury the costs and say it's "free" shipping, fine - if it's easier for buyers to calculate the costs with "free" shipping and sellers like to provide that ease, that's fine, too. As long as it's understood that it is "shipping included" which is what it really should be called (and used to be called). Even the line item write-off really isn't "free" - something was written off - shipping companies don't ship for free.
What happens is we get people truly duped by it, who sell something with "free" shipping then come here confused that they were charged...for shipping. Or complain that many sites which offer everything free (shipping, returns) have higher prices. It's like this delusion that the time and trouble saved by the buyer not having to tromp all over town looking for a particular item, but get it delivered straight to their door, is some kind of magic.
kensgiftshop
·2 years agoThose stores say free shipping, but they already figured a % in their prices to cover that free shipping.
buyselljack2016
·2 years agoYup, Wally ships "free" to me all the time. All buyers (including me) are paying for my items to be shipped.
Made an order Saturday. Came in 2 boxes delivered by FedEx on Monday.
nobody*s_perfect
·2 years agoLOL, I think you left something out.
frodobagginskennedy
·2 years agoi really am curious as to the age of this person. nothing reflective on the person!! More reflective on the education system.
chapeau-noir
·2 years agoWell, OK, then. 😂
zero29zero
·2 years agoSold a 5 piece place setting of china the other day, it was shipped via Priority Mail and weighed 5 pounds
Item price was $29.95, my payout after all fees & shipping label was $30.07 so with the difference between the retail shipping rate the buyer paid and the discount rate I paid along with the 10% trs discount (different ID) my selling fees were less that 0%, don't know how free shipping would have helped me there
na_833338
·2 years agoI didn't see it mentioned in the other replies, but if you have a store that runs sales from time-to-time, then "free shipping" on items would also put the shipping that was factored into the listing on sale too.
If a person does research on Terapeak, when it spits out the list of comparable items, it shows you the percentage of sellers that offer free shipping and the average price of shipping overall. This gives you a chance to see what your competitors are doing and allows a seller to make a better decision on shipping (or not).
Just my 2 cents on free shipping......
autosol15
·2 years agoEbay charges you a percentage of every dollar that changes hands during the transaction....is doesn't matter if you increase the price of the item to cover your "free shipping" (which isn't free) or if you have a separate shipping price...the fees are the same-ish.
Free shipping, IMO, makes it more attractive to the buyer because that's one less calculation that they have to do in their head to compare costs.....but if a return or dispute comes up, free shipping may bite you.
If I sell something with free shipping and the buyer wants to return it because they purchased it in error...no issue on the seller here, obviously shipping wasn't free and I, as the seller paid for it...say I sold it for $50 with free shipping....shipping cost me $10. I'll accept the return and give the buyer back $40 ...but that's not an option through eBay. I can give a full refund and pay for return shipping, or I can give a partial refund and let the buyer keep the item. Those are the options we have available as sellers selling with free shipping.
I list "no returns" on all my listings so while I may **bleep** a few people off....eBay can't justifiably take my money....but they've tried. I'd really like to help out some buyers who ordered by mistake without losing too much money myself but eBay doesn't seem to allow for that option.
buyselljack2016
·2 years ago@jlaxa
If I did "free shipping" (cost included in the price) it would cost me an average of 5.8 cents more for each item sent to a state that does not charge sales tax on the shipping portion of the sale.
buyselljack2016
·2 years agoand as others posted I would have been out several $$ of initial shipping costs that I would not have been able to deduct for the remorse returns that I accepted last year.
kensgiftshop
·2 years agoIt doesn't matter if you charge $20 for the item plus $10 shipping or $30 and free shipping, your fee's are going to be the same.
onefootflipper
·2 years agoAnd if you are selling relatively normal items that weigh over 1 pound you will find that free shipping means a continual stream of your items going to the furthest possible shipping zone.
stainlessenginecovers
·2 years agoYou FORGOT to mention that "in order to give 'free shipping' the 'shipping cost' will HAVE to be 'built into the selling price'
Sell $50 w/ $10 Shipping = $8.25 Final Value Fee
Sell $60 Free Shipping = $8.25 Final Value Fee
Unless, of course, you are Actually EATING the shipping cost and ONLY charging $50 for 'that item'......
farmalljr
·2 years agoAnother part left out of your formula, is that at times you get returns. You can't deduct "free" shipping from a refund. Your max TRS+ discount is 50% plus shipping. If the shipping is "free" to the buyer, you may not also deduct your shipping costs.
redmodelt
·2 years agoYa that would be a smart move esp for buyers that live in states that don't charge sales tax on shipping! LOL
Buyers pay for shipping when using calculated shipping, so that is not a fee or a cost for the seller.
No wonder sellers can't the percentage correct with that line of thinking!
reallynicestamps
·2 years agoFree Shipping is not free.
It means the seller has included their costs for shipping into the asking price.
Which is cheaper?
A $95 item with $5 shipping?
A $90 item with $10 shipping?
A $100 item with Free Shipping?
Which will sell fastest?
The fees to the seller will be identical.
The cost of shipping to the Seller may be discounted depending on how they pay for shipping.
For example , I use older mint postage stamps to mail almost all my shipments. I have a huge supply from 40 years of buying philatelic estates which almost always included at least some postage.
Enough that I even sell discount postage here on eBay.
This is a profit centre.
12345jamesstamps
·2 years agoYou can put the price of shipping in the price of the item for sale...thus free shipping. It does work.
If item is $10. + $2. for shipping....do $12. + 0 for shipping...same thing.
gator08041971
·2 years agoMost of us are aware of the gouging.
However you forgot to factor in something with your "math".
You didn't show a typical cost difference with Retail shipping rates, and Discounted shipping rates.
If I have the shipping paid for by the customer and they pay retail rate, (you can actually choose what rate the customer pays, Retail, Ebay rate, or just a % off the Retail rate), that can affect your end result. Sometimes the difference in shipping costs make up the difference lost with the ebay fee.
And that savings you think you are getting? Non-existent.
If I sell an item for 50 bucks and charge the buyer 10 bucks to ship it, its still 60 bucks (plus tax) that ebay fees you for.
So if I sell it for 60 bucks and free shipping. Its still 60 bucks (plus tax) that ebay fees you for. No gain.
So if I sell it, and charge shipping, that calculated shipping at a Retail rate can help offset some of the fee costs. That or I have to factor in enough of the shipping cost to cover shipping when doing free shipping.
I am far more likely to offer free shipping on small or light items. Larger items I won't. But in the end, you still pay the fees.
onefootflipper
·2 years agoFree shipping is an expert decision that will cost an amateur or everything seller a fortune if just implemented willy nilly.
There are 2 or 3 small reasons why free shipping is good and about 15 serious ones about why it is bad.
bashort
·2 years agoAnd if you would just lower your price with free shipping to $.10 ebay would basically get nothing
sapphire_studio
·2 years agoI don't know if you're joking in your post. I have free shipping but the fees are not any different because I'm going to add the cost of shipping into the item price.
In one example if you have free shipping and in another example you charge for shipping but you have the exact same item cost then you're going to make a lot less money with free shipping.
So fees is not a factor in whether or not someone chooses free shipping or charges the buyer for shipping. That's the whole reason eBay first started charging fees on shipping is people were cheating the system by doing 99 cent items with very expensive shipping in order to avoid fees.
soh.maryl
·2 years agoDon't understand your paragraph #3:
If I list an item for $20 with $5 shipping, the buyer pays $25 (plus sales tax, of course).
Or I list an item for $25 with free shipping, the buyer pays $25 (plus sales tax, of course).
Wouldn't my final value fee on both transactions be exactly the same?
So how would I make "a lot less moneywith free shipping"?
sapphire_studio
·2 years agoWhat I meant was if you didn't raise the item cost and had the exact same item cost then if you had free shipping you would make a lot less money than if you charged for shipping.
soh.maryl
·2 years agoAnd what I meant was that, if a seller was not smart enough, when offering free shipping, to build that shipping cost into his item price, then the seller would obviously be losing money because someone has to pay for shipping, and, if it's not the buyer, then it has to be the seller.