How can a new seller possibly offer free shipping?

[bobo710]

Many of my products that sell fairly well online and in person have a low margin. I try to sell on eBay at a fair price while making a small profit. I charge the buyer exactly what I pay for shipping.

So how can I possibly offer free shipping when the shipping cost to me is sometime the same or more than my profit?  And when I do try jacking up my price to build in shipping I turn around and find other sellers selling same or similar product for less than my cost and they still offer free shipping..  How the heck?  Is their product falling of a truck somewhere?

It's all very frustrating to someone new to selling just trying to supplement an income..

[gwzcomps · Accepted solution]

Just build it into your price. Depending on the item you may not have to compete based on price. With your Cisco stuff competitive pricing will make or break you. Other stuff price as you see fit and hope it sells.

[mtgraves7984]

I'm not new, but no way would I offer free shipping. I take a lot of time and care with my packages, I use a good share of shipping supplies and I charge a nominal fee (in my opinion) for the service. (I also take into account that I'm paying FVFs on the shipping charge and cover that in my cost, too.) Free shipping simply doesn't exist and I don't remember ever having a problem with my fee.

If sellers are offering lower prices, then they can afford to. I can't. 

[bigdeals.etc]

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@bobo710 wrote:

How the heck?  Is their product falling of a truck somewhere?

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There’s a chance they could just be stupid.

[mam98031]

The lowest price isn't always the one that sells.  Price things as you need to as see what happens.  

BTW, if you are running such tight margins, you might consider shopping around some more and finding other things you want sell.  You may just need new vendors.  Also if you are charging your buyer exactly what you pay for shipping, then you are losing money on shipping.  You have PP fees on shipping, Ebay fees on shipping and your packaging materials and labels to consider.  They are all costs of shipping.

[chapeau-noir]

I use capped flat rate - it's a compromise, but I live in a corner of the lower 48 and that's always more expensive shipping. 

And, yeah, some people have no head for math, or maybe they fell off a truck.  Some of the pricing I think people just haven't thought it through.  Actually, I don't really understand, either. 

[mam98031]

We are in the same state.  But with that said, it doesn't change what I said before.

[chapeau-noir]

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@mam98031 wrote:

We are in the same state.  But with that said, it doesn't change what I said before.

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?  I'm just saying what I do and why.

[reallynicestamps]

Free Shipping is just an advertising buzzword.

It means there is no added shipping charge, because your shipping costs (including packaging) are built into the asking price.

Which is cheaper ?

A $10 item with $5 shipping or a $15 item with Free Shipping?

There is no correct answer.

Most buyer love the idea that they are not paying for shipping, but are smart enough to realize that the cost must be covered somewhere.

But some buyers like to see a lower asking price and are comfortable having the shipping added on later.

And then there is "aspirational buying".  Those customers believe the more they pay for something, the better it will be.

Do you really believe a Hermes Birkin is worth an 18month waiting list and $12,000?  Some people do.

[fern*wood]

One more thing I consider, when I think about offering free shipping, is my return policy.  Since i have a 30 day return policy, I allow for remorse returns.  In January I had four returns (that's a lot for me at my low volume) so if I offered free shipping on any of those, I lost that initial shipping cost when I refunded.  If the buyer had paid for the shipping separately, then I did not have to refund that. 

[inhawaii]

I often ask myself the same thing when it comes to competitors selling the same item(s) i do ... how do they sell it so cheap?

I believe that the answer is that they haven't sat down and figured out what their costs actually are.  They're not making money. These sellers will come and go. I'm here for the long run. Long after these sellers are gone i'll still be here selling that same item.

As far as what to price items at. Everyone here has their own way of doing things.  Personally i wont sell an item unless AFTER ALL COSTS/FEES i can at least double my money.

Good luck to you!

[gracieallen01]

There is no such thing as 'Free Shipping'.  Free Shipping is just put there to make the buyer feel all warm and fuzzy.  The Post Office doesn't ship for free.  Neither does FedEx or UPS.  Someone pays for it, whether it is you or the buyer.  Even Scotty or Star Fleet Command has to pay the electric bill - you think those dilithium crystals are free?

[dhbookds]

I turn around and find other sellers selling same or similar product for less than my cost and they still offer free shipping.. How the heck?

Eternal problem........ sellers can buy cheaper than you...quantities, refurbished, closeouts,  and there may be some "falling off the truck", etc.  Frankly, if the competition is too "rough".....you need to find something else to sell.  However, not everything sold is always at the lowest price.  Some categories are worse (better) than others.  As a new seller you are going to have to feel your way to learn.....

I would caution about one thing..........what you "assume" as a seller (as a person) is not always true for all buyers..  You take pride, obviously, in charging your cost in shipping.  Buyers don't/can't know that, so it isn't necessarily  doing you any good except in your own mind. 

Because you're a new seller......just some small suggestions.......you need to flesh out your mug titles with key words.......  and search the titles you are using to see what works best..........that 1776 mug might show up in more searches with the addition of  Don't tread on Me, as signified by the snake.  In addition I would use ceramic in the title..... and perhaps even the ounces it holds.......  Remember, items not only need to show up in search, but be attractive enough for buyers to open the listing and buy......  Many think the more info in the title, the more likely that is to happen..... 

Starting out isn't easy.......but the more you learn, the more likely it is that you will be able to sell more items.......  Certainly wish you good luck.

[luckythewinner]

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@bobo710 wrote:

Many of my products that sell fairly well online and in person have a low margin. I try to sell on eBay at a fair price while making a small profit. I charge the buyer exactly what I pay for shipping.

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Unless you have a supply that is cheaper than all of your competition, you will always run into someone willing to make less money on a sale than you are. 

If you are listing items that the competition can regularly beat on price, IMHO you need to list different items. Rearranging the deck chairs is wasted effort. 

If retail were as easy as buying from a supplier and listing on eBay, then everyone would be rich.

[cashvaluerecovery2011]

Free shipping will get you way more looks than having fair shipping costs. Buyers dont ship every day. They dont know what is fair. Many sellers make profit shipping and buyers dont like it. With new zone pricing you can package weigh and measure your item before its sold and price it accordingly for worst case scenario. You will get more people interested if it says free shipping.

Also as far as product cost. Find a supplier who gives bulk prices. A $20 cost highend water bottle isnt $20 when it came off a pallet of 400 items at $350 total. You can cost that bottle in at $0 if you value the $350 on all the other items. Many of us work off this kind of total costs split up vs each item value.