How do sellers manage cheaper shipping on low cost items?

[lcollect]

Hello to everyone in the community or reading this thread. 

I am curious to know how sellers manage to give a cheap shipping cost to buyers on low cost items below $10.00. I would like to provide better options to my customers but the shipping cost is always a bummer 😞

In Canada, shipping with tracking is expensive even domestically and for international buyers, it becomes even higher. A 500g package can easily amount to $40+ with tracking for international packages. Do all sellers ship with tracking and if you use regular postage without tracking, is it covered by Ebay in the event of a item not received claim? 

Any information you can share is helpful. 

Thank you, 

Lovable Collectible

[qaisara]

I have been looking for answer to this myself but no luck

[ilikehockeyjerseys]

They ship by lettermail, which costs roughly 2-6 dollars depending on weight.

You are not covered for INR claims, because there is no tracking. You have to take the emotion away from this and look at it purely from an economic perspective as a cost. If you lose 1 out of 100 packages to INR claims, and an average loss is worth 10 dollars + the value of your time, then the total profit you make on all 99 non-INR packages combined has to still be worth it to you to make operating with INR losses make sense.

Your rate of INRs will vary depending on the category you operate in. So I am not saying 1/100 is the normal number.

[motomike_canada]

options include:

- Negotiate rates with Canada Post

- use ChitChats

- use airmail as outlined above

- raise prices of items and show "reasonable" shipping cost

- leave item prices low, use calculated shipping in eBay and let people decide if total $ is worth it

- make bundles, instead of one $10 item, sell 3-5 items in a package if they can ship together 

- change your business model and go after larger value items. 

There's no simple solution.. all depends on your business model and clients.  it's part of the reason I try to stay away from selling items under $20 more and more these days.  It takes the same amount of effort to sell a $10 item as a $100 item. . . 

[reallynicestamps]

Some items are not worth selling by mail order.

Online selling is a form of mail order.

Most of those low value /free shipping deals are being shipped from China, which offers low costs*.

Some sellers are in categories, like scrapbooking supplies, where multiple low price items are purchased at the same time.

Most Canadian sellers of low cost goods do not track. On a domestic sale of an item that weighs499gr, that would be a difference of $5 on a US sale a difference of $9.

We get some small discounts from Canada Post with our Solutions for Small Business number which is used by SnapShip(Canada Post), Shippo (eBay's default) or Paypal (my preference).

@ilikehockeyjerseys  makes a good point about the rarity of lost or delayed deliveries. We can subsume the occasional loss into our business costs.

Remember if you sold for $10 with $5 tracking, you did not lose $15 in a Not Received Dispute. You lost the shipping ($5) but only your procurement cost (~$1 +your time+ packaging) and your fees (~$1.50). The lost potential profit is an annoyance, not a line item.

And the $1 cost for a $10 item was serious. At low prices, the procurement cost should be low enough to cover all your costs and still allow a markup to a saleable price. On very low price items, that could be a 1000% markup.

Keep in mind that your customer would not be shopping online if he could get it nearby.  Which is why selling mass market goods is based on price, while collectibles pricing is based on scarcity.

Don't count on international sales. Just use Calculated Shipping and hope that the customer believes that the price is good value.

Selling into the USA is a different question, since it is the largest economy in the world, and our postal systems are well integrated.

*Not as low as they were before heavy negotiations and a 'work to rule' by Western postal systems in the Universal Postal System  forced China Post to charge more for their international shipping.  Long story but the big change came in September 2016 and is still underway.

[motomike_canada]

---

@reallynicestamps wrote:

We get some small discounts from Canada Post with our Solutions for Small Business number which is used by SnapShip(Canada Post), Shippo (eBay's default) or Paypal (my preference).

And the $1 cost for a $10 item was serious. At low prices, the procurement cost should be low enough to cover all your costs and still allow a markup to a saleable price. On very low price items, that could be a 1000% markup.

---

Just curious if you've tried getting better rates with Canada Post.  It seems like you have a decent number of listings.   The base discount for Solutions for Small Business isn't much, and doesn't even take much volume (or...potential volume) to move into the next best rate category. 

Also on the procurement cost, I agree 100% on that calculation for small value goods.  Years ago (like .. 20 years ago) I was making these little electronic kits and selling on here. Total cost of goods was $1.50 and I lived on a border then, so I could ship USPS Expedited for 3.45 US.  I was charging US$19.99 plus $5 shipping, and using free USPS supplies. The shipping cost essentially covered the majority of my actual costs.

One other point actually, thinking about those kits, was that I was also price testing the market for a while before deciding on $19.99 for a selling price.  I had identical listings (back when you could do so) and priced them at $9.99, $14.99, $19.99, and $24.99    The $19.99 price sold about 3-to-1 compared to the highest and lowest, and 2-1 for the 14.99 listing.   For low value items, this might be something to try as well .  There is sometimes a greater perceived value proposition in a higher listed price.   To a point... 

[reallynicestamps]

Ummm - did you notice what I sell?

If there is one thing stamp dealers have, it's stamps.

Mint never hinged stamps. And the Dominion of Canada has never demonetized any stamps. We can even use Newfoundland stamps if we want. (A good Newfie joke there, with the mainlanders as the butt.)

We buy estates and sometimes at auction.  Prices for postage are heavily discounted. Why bother with the Post Office at all?

BTW, Canada Post does have different levels of discounts with the SfSB card, based on the amount of shipping the business does.

But I can buy (and often sell) postage at even lower rates.

[brettjet38]

...they live in China and get "Subsidized FREE" shipping, as for the rest of us, we try to be creative...

[lotzofuniquegoodies]

@reallynicestamps 

@motomike_canada 

And you only need 2500.00 in a calendar year to get  up to level 2 discount. Not sure if that's a good or bad thing to say easy peasy? On the darker side that's only 250 + per year in FVF's to eBay.

-Lotz

[reallynicestamps]

@brettjet38 

While China Post does have very low rates, even compared to their average annual income of ~$13K, I'm surprised more sellers are not annoyed at the incredibly cheap  tracking from USPS.

Less than a quarter to track if the shipping label is purchased online, not much more if purchased at the PO counter.

While we cannot track a letter to the next province , or even to the same city, for less than $10.

As sellers we are more likely to be competing with American sellers than the Chinese penny sellers.  And American buyers expect the same low shipping cost as their domestic sellers.

[**klondikemike**]

As mentioned above, use letter-mail and cross your fingers it gets there. I drop off the letter at the Post Office and take a picture of the letter with a Post Office date stamp confirming that it was entered into the system. I use the photo to assist in any disputes. I would NOT send anything over $20 this way.

[dr.note]

Another way is to use alternative shippers such as DYK Shipper who operate here in Alberta. For a very small charge they will take your item across the border to the USA and then you can get the US rates and tracking. Not helpful for international but fantastic to the US. Canada Post can't compete. The price is less than half on most items. Hope this helps.