@BarefootBliss wrote:
circling back to the eBay topic....I do not completely understand how the shipping is priced.
I get that it's USPS and there are categories set by USPS.
But some sellers will charge $8 to ship me something and another seller will charge $16 for the same item.
Further, USPS does not guarantee their Priority Mail packages.
I pay the same whether they take 3 days or 11 days to reach me (recent, real life examples)
The Short Answer
Sellers can ship USPS, UPS, or FedEx. USPS is generally cheaper for us, unless it is a heavy and/or large item going to Zones 6-8.
When you say USPS does not guarantee their Priority Mail packages, what do you mean? Do you mean the delivery date? If so, you've been told incorrect information. If a Priority Mail package arrives late, we can file a claim. For Ground Advantage service, the package has to be more than 30 days past the expected delivery date. In either case, eBay buyers can file a claim with the seller anytime after the delivery date has passed. Generally sellers will slow walk that claim to give hopefully enough time for the package to arrive. Otherwise, if we refund right away, then the package comes, we are screwed.
As far as what you pay, sellers have several options when it comes to how we charge shipping on eBay. There are ways for us to offer shipping discounts or set it up in another manner that works for us and hopefully the buyer, too. In your example, it is possible the $8 item was located closer to you (thus cheaper shipping). That may not be true, but without more it is hard to say.
The Long Answer
Some finer details on how shipping works from the seller's perspective and what we have to consider if we are genuinely trying to run a business. It will help to keep in mind that most sellers (at least the good ones) are doing research to know how to price items. There is a max total buyers are willing to pay. The max total includes the item cost and the shipping. How we divide that up really depends on the seller's preference. We want to maximize sales, and one way to do that is to adjust how we present the shipping to buyers since we do have options.
First, we can choose to not directly charge for shipping. This will show up as "FREE SHIPPING" to the buyer. All this means is that shipping is not a seperate line item in the sale. The upside to this is that the idea of free shipping appeals to a certain class of buyers. There are buyers who refuse to buy anything if there is a shipping charge for it. I've even had buyers pay more for the item without shipping as a seperate line item, than had they simply bought the item listed at the cheaper price but with shipping added as a seperate line item.
The downside to the "FREE SHIPPING" choice is that, of course, shipping is not free for us as sellers. We have to be diligent to ensure we include the shipping costs into the cost of the item. If we don't do that, then we lose money. Sellers that don't grasp this tend to not stay in business very long because they are bleeding cash. Of course, there are exceptions. If you are selling trading cards, for example, then your shipping costs are very minimal. If you sell household items and other larger items, then you definitely want to make sure your shipping costs are included in your pricing of the item. The other downside is that when you offer FREE SHIPPING, if someone returns something, you have to give them all of their money. If you charge seperately for shipping, you can withhold original shipping charges from the refund.
Another option is to offer what is called calculated shipping. This option bases the shipping cost on both the seller's zip code and the buyer's zip code. Ideally, this would work perfectly since shipping costs are largely controled by the original and destination zip codes. To use this option on our end as sellers we must input the weight of the item, along with the dimensions of the box or packaging it will ship in, at the time we list the item. We have to remember to account for the weight of the box, because even small boxes can had a few ounces to the weight of the item. Oftentimes we may not have the box it will ship in on-hand, so then we have to guess. This can lead to inputting weights and dimensions that are not accurate. Buyers may not be charged enough, which results in less profit or a loss for the seller, or buyers may be overcharged. If a buyer is shown a shipping cost too high, they may move on to another seller. Sellers cannot directly see what price a buyer will be shown since it will depend on the zip code. There is a tool we can use to see an estimate of the shipping costs, but we would have to type in zip codes for each zone to actually know what buyers in every zone will see. That process would be quite time-consuming when you consider diligent sellers try to list at least 5-10 items a day. Sellers can also set a surcharge to be added to the calculated shipping costs. A seller may do this to ensure the costs of materials (e.g. boxes, tape, bubble wrap, etc.) are covered.
Sellers do get steep discounts on shipping. It can be anywhere from 20% up to about 70%, depending on various factors. For a long time we've had the option to pass those discounts along to buyers. eBay recently changed their policy to automatically show buyers the discounted prices unless a seller opts out. This applies only to sellers who use the calculated shipping method.
The final option we have is to offer flat rate shipping. With this set-up, buyers pay the same rate for shipping, regardless of their zip code. We manually decide what that rate will be. This gives sellers more control. First, we know what the shipping costs shown to all buyers will be. No wondering if a buyer in zone 8 was shown a crazy shipping cost like $25 for an item that weighs less than a couple of pounds. It ensures that we not only account for our actual cost to ship the package, but we can include the cost of our materials in the pricing as well. Third, it saves us time when listing because we do not have to input any weights or dimensions into the listing.
I've done both free shipping and calculated shipping. With calculated shipping, one of the things I discovered is that eBay will sometimes adjust the cost higher or lower than what should be shown to the buyer. Even if I input accurate information, eBay will sometimes pad it further. In other cases, they will deduct some from what the costs should be. I'm not clear on why they do this. They use numerous algorthims to manipulate buyers to take certain actions. I have quite a bit anecdotal evidence that indicates making adjustments to calculated shipping costs is one of them.
About six months ago I changed to a flat rate shipping model: everybody pays the same amount, no matter where they live. Sellers can set up policies so that we only have to select the policy we want to use when listing an item, rather than select the shipping carrier, the service, and input the amount. What I have set up are probably a dozen or more flat rate shipping policies of various amounts. We can set the policy up to show buyers up to 4 carriers and services, or we can select a general service; such as "Economy Shipping," "Standard Shipping," or "Expedited Shipping." These general service terms do not show the buyer any carrier options. Instead, the choice of carrier is left to the seller. There are advantages to this. Since the flat rate is a set rate, keeping the carrier choice on my end ensures I shouldn't have to overpay for shipping so long as the flat rate I've set is accurate. What I do is I offer "Standard Shipping" which covers USPS Ground Advantage, UPS Ground, FedEx Ground, FedEx Home Delivery, and a couple other options that do not pertain to what I sell. I can always upgrade to a faster option on my end. There were times when Priority would be the cheaper option, but since USPS made changes earlier this year, it no longer is. I haven't shipping priority in many months. In fact, I recently tossed out all my Priority boxes as they were in my way. With both calculated and flat rate shipping, sellers do not have to return the original shipping charges to the buyer.
Without giving too much away on my own personal methodology, what I'll say is I have a quick way to know what my shipping costs will be to a reasonable degree of certainty. For example, any item that will have a ship weight of 4 ounces or less, I know will cost me (at a discounted rate) about $3.79 if it is a Zone 1 buyer to $4.36 if it is a Zone 8 buyer. Therefore, for those items that are 4 ounces or less, I select my $4.49 flat rate policy. Regardless of zone, all buyers will pay $4.49. I make a little extra on buyers who are closer, and a little less extra on buyers further away. From a business perspective, I don't have to make enough from each sale to cover all the material costs for that sale, because other sales will even that out. Because my policies already had a small amount of padding built in, I did not have to raise my rates when USPS did back in July. I am getting ready to raise my rates because USPS has gone up due to their holiday surcharge. They went up on October 6th. I'm going to raise mine on Tuesday to account for this.
Having tried all three methods for extended periods over the last almost two-years, I think the flat rate works best for me. I know it does, because my numbers prove it. There are several reasons for this, but the central one is that most buyers are willing to pay for shipping as long as it is reasonable. In fact, I would argue that if you are selling something breakable, if you are not charging shipping, you will turn off buyers because they will be worried you are going to half-a** the packing process. I like having the shipping as a separate line item because it helps me track my numbers more efficiently. It also means I can give larger discounts on items, because I know I do not have to worry about trying to figure out the shipping. If I want to run a 30% off sale, I can do so knowing I'll still turn a profit and not lose out due to the shipping charges.
Sellers can use any combination of these shipping options. While I have all of my listings set to flat rate, I could just as easily set some listings to free shipping and some to calculated, if I thought those might fit better with certain items. For example, with Christmas nearing, I may offer free shipping on items that weigh less than 13 ounces.
One last thing, back 10+ years ago eBay only charged selling feels on the price of the item, not the shipping. What we used to back then was charge $1.00 for the item, then like $40 for shipping, if it was a $40 item, for example. eBay changed that, and the fees are applied to the total cost (item price + shipping + taxes). There are still old sellers out there who list very low item price, but very high shipping, because that was the work-around to the fees back in the day.
There is the truth.
Then there is the right thing to say.
Edited 5 time(s). Last edit at 10/12/2024 06:54PM by ServiceAward.