How is it that many sellers are offering free shipping that costs more than the price they are askin

[hardworkingshawn]

Many sellers with "business accounts" are offering, for example, a 2 LBS item with free USPS Priority shipping with an asking price of $13.00 (not an auction). This particular seller is on the East coast. My information says that if a Californian bought this item it will cost the seller more than his asking price to ship it (note that the item does not fit in a small flat rate box or envelope). I mean, in this case no free shipping of any sort should make sense.

Am I missing any information about shipping discounts? If they were amateurs I'd think they're losing money but they are professionals and selling many of these items. Also, this particular one I have in mind has an item that no other seller on eBay is offering. You'd think that they can push the price up a little bit or a lot. What is the deal here? Any thoughts?   

[Anonymous · Accepted solution]

- Large volume shippers can access much deeper shipping discounts

- Some people ship on their employer's dime

- Someone came across a large box of stamps at an auction or estate

- Cubic pricing

- Flat rate options

- Loss leader

Forgot to add an obvious one:

- User error or eBay error, price is not what the seller intended.

[18704d]

This question comes up occasionally on the boards.

There's a few possible reasons.

Perhaps the seller is using his work address to ship (meaning the company doesn't know they're paying for his shipping.)

Or... maybe they are loss leaders to drive more business to this seller's eBay sales... or elsewhere.

Or sometimes, we've seen a seller or two who had to get a surge of sales.. to offset bad selling defects.. in order to maintain their seller performance standards.

Or ...?

Lynn

[richard1rst]

I can offer 2 other alternatives.

He is offering free shipping as he believes that will get him a better placement in the searches.

BUT he is using an average shipping cost based on the middle of the country as his benchmark. Yes, he will lose a few dollars on a west coast order, but he will more than make it back on a sale close to him which will cost less to ship than his benchmark.

Secondly, there are 2 theories on pricing:

Get as much as you can on each order but at the higher price not sell as many.

OR make a minimal markup, crush the competition and make a gajillion sales.

The second theory is embodied by Andrew Carnegie. He took over a steel mill in Pennsylvania which eventually became U S Steel. At the time the railroads were expanding across the country and steel was in high demand. He crushed his competition by selling steel at a profit of one penny a ton. Now at that time a penny actually had some value. But in short order he put his competitors out of business (or bought them up) and became a multi-millionaire in the process. One penny at a time. Other industrialists did the same and that era became know as the era of the Trusts. Hence the now anti-trust laws.

[bubbapeaandme8178]

SOUNDS LIKE A GREAT BUSINESS MODEL, I HAVE A FRIEND THAT SAYS, " BUY HIGH, SELL LOW AND MAKE IT UP IN QUANTITY".   YOU VE GOT TO  LOVE IT, OR "SOUNDS LIKE A PLAN"  BUBBA

[luckythewinner]

Some more theories: 

1) He is not really shipping by Priority - he is actually mis-using Media Mail. 

2) He is based in the USA, and is lying about his location and his shipping method. 

3) He is based in China, and is lying about his location and his shipping method. 

4) He is really bad at math

[reallynicestamps]

I sell mint Canadian postage on dotCA and most of my buyers are eBay sellers.

My eBay price is 20% off face no shipping added.

I have better prices for my private customers when there are no eBay fees . (I still have PP fees and postage of course).

To offer this kind of discount, as you can imagine, I have to buy at an even greater discount. Fortunately this is not difficult after 40 years in philately.

Buy low. Sell high. Or at least higher.

The guy shipping through his employer's mail room is putting his day job in jeopardy.  Basically it's theft and a fireable offense.

[lovett-1000]

i have same issue. It is true that some are really paying buyer to purchase thier items. I sell fat wood but have other also selling 50 lbs for less than postage to mail. I message them asking how. They said back. Only if I add some $ to the sale it will be O.K. They are hurting others trying to just get by on here.  But they are determained to kill sales for others even if they have to pay to do it.  Just a matter of time before they catch on it is doing them no good. Just helping greedy e bay with fees. 

[hardworkingshawn]

I believe you went straight into the direction I had in mind, "deeper shipping discounts". Any headlines you can offer regarding this?
Also, I skimmed through USPS's page and it seems very useful, so thank you for that. I'm assuming there's a way to connect that account to eBay's account?
Flat rate options? could you explain more? cause it wouldn't fit into a priority small flat rate box

[hardworkingshawn]

Unfortunately, I did not come across one that addressed discounted shipping rates. Great points you mentioned though. Thank you 🙂

[hardworkingshawn]

Great points. However, I know he is losing big time sending to the west and not making money otherwise. OR, he has deep discounts which I doubt since he doesn't have that serious inventory.
Love the story about Carnegie, and love Carnegie...these guys were brutal 🙂
Thanks a lot

[hardworkingshawn]

It's a great theory but not when you're losing per transaction..in this case, all you make is more loss with more quantity, which is what I'm suspecting in this case here.

[hardworkingshawn]

lol @ your last sentence. I actually messaged him and his short reply said "Supply Chain" which I didn't understand. He is still keep the same price. And he has excellent feedback.

[hardworkingshawn]

Great points...thanks for sharing. It's just when you see the asking price is less than the cost of the free shipping...that's what's puzzling. Unless, the shipping fee is at a deep discount rate somehow.

[hardworkingshawn]

That's vicious! It's part of the game though...if it works.