Canada Post Rates Go UP... Profit Goes Down...

[canadabeltbuckles]

For those of us who offer Free Shipping as an incentive for Buyers, and ship via Canada Post, well, we just lost more profit...

Light Packet to the USA up by 16 cents.
Small Packet to the USA up by 24 cents.

Shipping in Canada as well has gone up...

I don't dare raise my prices to compensate for the increase in shipping fees, with fear of losing sales.

Should I change my listings to include a small shipping fee? How would that affect my eBay listings, or will it? Will it decrease my sales? Probably...

I am interested in knowing what, if anything, other Powersellers are doing to combat the increase in shipping fees from Canada Post?

The majority of my sales are to the USA, and ship either light packet or small packet...

Any ideas?

Thanks.

[axe_n_gear_music]

I only offer free shipping on a few items, but many of my items are of a little more expensive nature, or are larger to ship. I am actually raising some of my shipping prices.
Here's a good new years resolution for ya that I have put into effect .... worry more about sales and profit and less about dsr's!! 😉

Cheers,
AXE

[coxengines]

Your call,

Postage, as mostly anything else, will continue to increase in price. So do buyer's incomes.

We absorbed the increase as we had increased many of our item prices January 1.

As we make a profit on shipping, the increase merely decreased our shipping profit, no big deal.

Actually, we just signed up for a Small Packet contract with CP (13% discount) and that more than offsets any price increases.

Bernie

[cottonwoodindustries]

Actually, we just signed up for a Small Packet contract with CP (13% discount) and that more than offsets any price increases.

Bernie

How did you do that?
Do you have to have a minimum to sign up?

Thanks Loré

[fatdane]

Canada Post doesn't really give a hoot about how we as customers of Canada Post are doing. They haven't for years and to expect them to change now is futile. Just plan on postal rates going perpetually up, build it into your business plan and carry on - or get a job at Canada Post

[ricarmic]

Shipping prices go up every year! I've done the same thing as previous years, I've increased my prices (since most of my stuff is "free shipping") to compensate for that and the relative parity of the dollar, same as I've done before. No notable difference so far which is similar to previous years. (Shipping price increases are less a problem to me than the dollar parity situation!)

[surplusdealdude]

Absorbing the cost is, at best, a short-term strategy.

Eventually, you have to raise the costs.

Large price increases are a shock to customers. Small price increases are easier to peddle.

[coxengines]

Cottonwood,

Just call the commercial entity of CP. Their first discount tier begins at 1,000 small packets/year.

Bernie

[ameroindustries]

Canada post makes me sick .

:O

[dipmicro]

Canada post makes me sick

I agree. it was not so bad when you got around C$1.50 for each USD, but now that they are on par, shipping by CanadaPost is expensive.

There is a way to decrease the cost of Expedited Parcels. Just diligently keep hammering them on guarantees, lot of shipments are delivered late and checks from CanadaPost keep coming. They have online tool to file this automatically. It's like another 20~30% discount on top of PayPal's 20% discount.

[cottonwoodindustries]

Cottonwood,

Just call the commercial entity of CP. Their first discount tier begins at 1,000 small packets/year.

Bernie

Thanks Bernie for the info

[canadabeltbuckles]

Unfortunately, my competition on eBay monitors everything I do, as far as pricing strategies, shipping fees, etc... Raising the price to compensate for additional shipping fees is just another opportunity for the competition to take advantage. I have to remain in line with pricing of my competitors to survive. Negative Reports to suppliers about pricing strategies are not uncommon from some competitors.

Profit margins are at a low right now with the CP increase. Sometimes I wonder how the competition can stay in business...

I will look into the commercial side of CP and ask for the 13% reduction in shipping fees, at least that will offset some loss... CP Venture One program does help though, but it certainly isn't at 13%...

I agree, when the US dollar exchange rate was in our favour, times were certanly good! Ah, but for those good old days again... 🙂

'The Sun Will Come Out Tomorrow... Bet your bottom dollar..." Just keep plugging away I guess...

[axe_n_gear_music]

Copper said:
"Profit margins are at a low right now with the CP increase. Sometimes I wonder how the competition can stay in business..."

In my view though, if you don't mind my two cents here, if profit margins are too low for you, then drop the product and STOP wasting your time with it!
If you offer free shipping, then you must add on to your proper selling price the actual shipping costs plus a small amount of profit for handing time and packaging costs in the price of your item. Free shipping should not mean that the seller should lose any money- it only gives the buyer the "perception" that they are getting a deal.

If you find that there are too many other people selling the same thing for the same price or cheaper, find a better product line or supplier. Keep the better profit items and clear out the stuff that sits too long or makes you no money.
Everything in my warehouse is clearly dated as to when it came in. When I see something that has sat for several months or is making low profits, then I drop the price or put it on auction, and get rid of it, and don't carry it again.

It blows me away to see some sellers out there who clearly sell cheap items in volume at close to zero profit. Do they enjoy standing there packaging all day like that for little profit, and just padding the jeans of CP and eBay? Why sell 30 items a day and make 50 bucks when you can sell 3 items and make 500? (Just an example, and I know everyones business model is different and some smart volume sellers do actually turn great profits).

I personally would not waste my time with selling in volume, the small stuff with little profit. If I am going to take the time to package something, there better be good profit in it. Sure some small priced items with free shipping etc can be good advertising to get your customers to your store, and they work well to up your volume to better average out decent dsrs, but be sure you are making good profit on the rest.
Just my take.

Cheers,
AXE

[canadabeltbuckles]

You are absolutely right!

Don't waist my time competing on small ticket items. The trick is to find a different product line that would afford a higher profit margin, a product with little or no competition in the market, and a market demand that would send me to Jamaica every year on holiday!! 🙂

There are literally thousands of suppliers out there with millions of products, just wishing to sell them at the wholesale level to resellers. If a person puts in a little time to do their homework, it will pay off in the long run.

You are totally correct in stating that 'some sellers spend all their time creating listings on eBay to sell 30 items per day and make $50'. The smart person will sell 3 items per day and make $500... Mind you, $50 per day profit equates to some $18,250.00 per year in profit. Not a bad sum to augment your retirement income... But, when the potential is there to make more money each day, by all means, jump for it...

The smart person will not compete for the sale of an item for a $3 profit, he/she will market items that net a $25.00 profit instead.

(ie) Buy a widget from the manufacturer for $7.00; sell that same item on eBay for $14.95. By the time Ebay takes its' cut, and PayPal takes its' cut, then you shipping to the USA at $2.27 (light packet), packaging via bubble envelope is another 10 cents... Well, the realized profit from the sale is under $3.50... Add in the fustration from competitors, and it just is not worth it!! Not the way I want to spend my time...

Using ones energy and time wisely is the best approach in business. It comes down to simple economics, 'suppy & demand'. Make the right products available at the right time for the right price and you build your own market.

It is time to hit the books/internet as they say and look for a really desirable product line with little or no competition... That is the holy grail of eBay isn't it... Finding the low cost, high demand product is very difficult, but for someone who is motivated, it will be time well spent...

Thanks again for your insight, and I totally agree with your approach...

Best regards.

[ameroindustries]

I dunno id rather sell small products and flood the market .

If your doing large item its great if your just selling yourself / have to pack yourself . But if you get the packing / shipping part out sourced selling direct to customer instead of wholesaling it has alot higher margins . Only draw back is the emails .. the friggin emails which you cant really outsource .

I donno gonna give it a good crack in March List 20,000 + Listings See what becomes of me 😛

Lets face it if you want to be Uber Successful on ebay you need USA shipping Canada post WILL not Cut it .. There Ship times are awful there priceing is awful there customer service is awful .

Ebay will always be a Hobbie in canada Unless canada post changes stuff or you get away from there clammy clutches We all know that 2 - 5.00 your losing on each package + the horrid wait times kills a ebayer slow and painful .

But if i was running canada post id do the same thing Raise rates every 6-12 months where you gonna go ? Ups Oh no im scared noooot 😛

I bet if canada post was run non government there profit margins would be HUGE (they already are pretty good for all the excess / money they waste each day in 1 million ways)

coppergiftsandjewelry

Why arn''t you putting in your listing that your items are Pure Copper .999 fine ... Gosh id be doing that makes me feel all warm and fuzzy inside when i know its pure and consumer's will think there getting Good Value .

Why not do Custom stuff ? Some Enamel/Gold 24k plated Marijuan Leafs on those bracelets would fly out the door 😛

Gold enhanced images on pure (true color) Copper = $$$ 😛

[westernstargifts]

Unfortunately, my competition on eBay monitors everything I do

Yeah, I know the feeling.

Raising the price to compensate for additional shipping fees is just another opportunity for the competition to take advantage.

How can that be? Your prices and shipping are lower than your competitor's.

Negative Reports to suppliers about pricing strategies are not uncommon from some competitors.

Yup, my supplier told me that my competitor calls him all of the time to complain.

Profit margins are at a low right now with the CP increase. Sometimes I wonder how the competition can stay in business...

Yeah, I know the feeling. My competitor has driven the prices way down from what I originally, and successfully, sold them for. But I believe in my products and keep my prices up there. And I still manage to sell them .

Postal rates go up every year. Build it into your business plan.

I agree, when the US dollar exchange rate was in our favour, times were certanly good!

Exchange rates fluctuate constantly. Set your prices high enough to compensate for the rise in our dollar. If you set your prices at the lowest amount that you are willing to sell them for you leave yourself no breathing room for auction pricing, exchange and postal rates….not to mention fee increases. It is better to have your prices a little high to begin with so you don’t have to raise the price as often.

Constantly raising and lowering prices and shipping charges are noticed by customers and can really turn them off.

I will look into the commercial side of CP and ask for the 13% reduction in shipping fees,

That is for “Small Packet”. Since most or your packages are likely to be Light Packet you probably won’t qualify.

The smart person will not compete for the sale of an item for a $3 profit, he/she will market items that net a $25.00 profit instead.

Really?

It is time to hit the books/internet as they say and look for a really desirable product line with little or no competition... That is the holy grail of eBay isn't it... Finding the low cost, high demand product is very difficult, but for someone who is motivated, it will be time well spent...

That is a good idea. Don’t look at what others are doing but find your own niche, figure out your own strategies, write your own descriptions and research your own key words.

Using ones energy and time wisely is the best approach in business. It comes down to simple economics, 'suppy & demand'. Make the right products available at the right time for the right price and you build your own market.

[bighillbargains1]

Canada post makes me sick

There is a way to decrease the cost of Expedited Parcels. Just diligently keep hammering them on guarantees, lot of shipments are delivered late and checks from CanadaPost keep coming. They have online tool to file this automatically. It's like another 20~30% discount on top of PayPal's 20% discount.

That's why they have to keep raising prices... 😉

[ameroindustries]

They choose to they don't have to ... HK Post has not had a increase since 2005 .

Its cheaper for me to send a small package all the way from Hong Kong than it is for me to ship the same item 20 Min up the road .

Thats b.s

[dipmicro]

They choose to they don't have to ... HK Post has not had a increase since 2005 .

Its cheaper for me to send a small package all the way from Hong Kong than it is for me to ship the same item 20 Min up the road .

Thats b.s

The best part?

It will get delivered by the same postman. If you send it from Canada, CanadaPost gets paid. If you send it from HK, CanadaPost delivers HK package for free.

[ameroindustries]

LOL It makes my ebay ulsers flare up just thinking about it 😛 LOL