There is no "rule"!
eBay at one time had a wishy-washy policy statement about "reasonable" handling charges but that was back in the day when there were no fees on shipping and while they intimated the reason for the policy was fair treatment of buyers the truth is that it was all about fee avoidance which at the time was quite rampant.
Handling charges have been a part of mail order since forever and throughout eBay's history there has been a place in Calculated Shipping to add a handling charge (never specified other than "reasonable").
Seems to me that if you have a policy against charging more than "cost" you should have a policy against charging less than cost (ie:"free" shipping) but that has been encouraged by eBay for years and was the main true reason for fees on shipping as it allowed sellers to charge whatever they like without penalty for subsidizing and no benefit for profiting.
The other obvious thing is that not all sellers pay the same amount for shipping, if you have the volume or the skills to negotiate lower shipping costs why should you be obligated to pass on those saving to buyers? If you obtain your goods for less than the next seller should you also be obligated to pass along those savings?
Personally I am someone who sells goods AND services, I'm here for profits not kicks or a warm fuzzy feeling, I try to make money on the items I sell and the services I provide, in some case I may profit on the goods, sometimes on the shipping and more often than not on both. I also try to be competitive so in a free market there is a balance between how much profit I can make and providing perceived value to my buyers so that they will continue to buy. The amount of profit and where it comes from (the goods or the service) is irrelevant, for both I attempt to lower my costs and increase my profits as any self-respecting capitalist scum would do. I also beat up on my suppliers (again both goods and services) to reduce my costs to the lowest in order to offer the best value to buyers and put the most in my pocket.
In practice I tend to charge at the bottom end of the range of my competitors while making higher profits than they do, this generally allows me to have a decent profit on both and because I have had many years to hone my skills I am probably making a much higher profit than others while continuing to provide "value" to buyers.
Note that shipping costs are much higher than just the raw cost of postage, there are the fees imposed by eBay, there are the payment processing fees, there are the packing materials, there are the labour costs, there are the costs associated with operating a space to conduct the packing, there are the cost of transporting packages to the carrier. In a free market you don't restrict levels of profit on goods, services are no different and this is especially true on eBay where little if anything sold could be considered a "necessity" where pricing should possibly be controlled to some extent. eBay sellers don't deal in goods or services that are vital to life, selling trinkets on eBay is not the same as life saving medical treatment or basic food & water during a natural or man-made disaster.
eBay still does have guidelines but they are vague and unenforceable they are mostly there to state their position on misleading sales tactics which have the potential to alienate buyer which in the end would harm the marketplace. eBay just recently announced a large number of layoffs in order to reduce their expenses, is there any chance that eBay will pass those savings on to sellers by way of reduced fees? I say not a chance, they do it to increase their bottom line, the same reason I usually charge over and my "actual cost".
Here is eBay's current stance on shipping charges (even more watered down than the previous):
If an item's cost seems excessive, try to find a better deal. You can also use our Shipping Calculator to research shipping rates. It's against our policy to have unreasonable shipping charges in a listing, or to provide unclear or misleading shipping information.
Sellers are allowed to:
Charge actual shipping costs
Include the cost of packaging materials, insurance, and delivery
Include delivery confirmation or extra services in the handling cost
Sellers aren't allowed to:
Charge more than the maximum shipping costs in categories with shipping caps
Charge a separate fee for insurance
Charge for business-related fees such as employee wages or gas mileage
Include contradictory or confusing shipping terms in the listing
When we use Calculated Shipping the buyer sees the exact price that Canada Post would charge for postage stamps or labels, but not tax or fuel fees.
OTOH, buying labels often gives us a small discount (less than tax or fuel fees unfortunately) which slightly offsets the price printed on the label.
But then there is packaging. Bubblewrap is not free, nor is printer ink, envelopes, kraft paper, sticky labels, packing tape , or tissue paper.
Soooo- exact postage that you pay means you will lose money on shipping.
Calculated Shipping is better but you have to put your packaging costs into the asking price.
Flat Rate shipping can be used, where you either make up the cost of shipping or
DON'T PANIC!
Use Free Shipping-- which means putting all your shipping costs into the asking price for your items.
Which is cheaper: a $10 item with $5 shipping ? A $5 item with $10 shipping? A $15 item with Free Shipping?
Flat rate/Free allow you to massage your costs better than Calculated.
But Calculated makes allowances for destination, which cannot be done with Flat Rates.
Featured Posts
