eBay

momcqueen · ‎09-17-2016

There is probably no more divisive topic on ebay than the issue of charging handling fees with shipping. You will find members either fully in favour or fully opposed. I am creating a new thread for this because I, among others, have strong feelings one way or another and they are threatening to overtake another member's innocent question. (See: http://community.ebay.ca/t5/Seller-Central/Ebay-charging-the-buyer-more-for-shipping-than-it-is-cost....)

So let's have it out here.

Handling fees? Do you use them? Do you not? What amount do you set and how do your buyer feel about that? Are you a buyer? What's your limit or expectation for the amount of handling fee that you are willing to knowingly pay?

For the record, here is what ebay has to say about Handling Fees as policy and procedure. A search for the term 'handling fee' leads me directly to the answer 'excessive shipping cost' which already sounds biased and says:

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

http://pages.ebay.ca/help/sell/reasonable-shipping.html

http://pages.ebay.ca/sellerinformation/seller-protection/best-practices.html

Can anyone chime in with additional links? I'm looking for one I remember seeing a long time ago that specifically prohibits excessive shipping and handling fees but does not specify what actual amount is deemed excessive. It was part of the old Help pages and many have been replaced since. I wonder if it still exists. It may have been tailored to a buyer's perspective.

Let's have at 'er.

momcqueen · ‎09-18-2016

I think a 'handling fee' aggravates people because it's added to the postage portion of payment which feels like throw-away funding. Like, once once you have that item in your hands, you don't look at it and think, "Wow, that was postage and handling fees well spent!" Instead you think, "This is such a nice item. I'm so glad I bought it." (And maybe your next thought is: "...except for the shipping and handling fees.")

sylviebee · ‎09-18-2016

Yes. The term "handling fee" is abrasive.

It comes from a time when handling fees were used to trick buyers into paying more than the amount agreed upon when the sale was made.

Handling fees were usually crazy high and often more than the price of the item itself.

Now, there's much more transparency but handling fees are a carry over from long ago when mail-order was a relatively new way of buying.

Now, handling fees have only a little life left and are pretty much a thing of the past.

33nhl · ‎09-18-2016

I have been finding with respect to fees coming back on ebay after being away from the hobby for some 7 years, that a lot of buyers don't believe that Canada Post has raised costs on shipping almost 40 percent since 7 years ago.

Example it use to cost to send a small parcel of 100 hockey packs to USA for 16.00 now we are looking at min 25.00

So when potential buyers see $25.00 for shipping they think your gouging them off on S/H and they don't also realize that ebay takes a cut of 10 percent fee from the S/H so from that 25.00 for s/h ebay takes the $2.50

The way its heading if offering free shipping of any kind and you add it to the sale price then buyers see your items are higher price even though your offering free shipping but they buy from someone else just because they have a lower price of that same item.

Fees left and right by Ebay and PayPal are being passed down to the potential buyers and the buyers are turning away and going to other means such as buying on Kijiji or buying directly from web sites such as Hockey Wax Breaks where hockey packs are opened live and you get the cards. The sellers love this method cause thers no fees to pay to any one even when a buyer pays the seller on that web site they send the funds directly rather then as a purchase so no fees to pay pal no fees to ebay.

I find the online market has changed and will change even more as more and more fees come the more it will drive sellers and buyers to somewhere else.

33nhl · ‎09-18-2016

Forgot to mention just look at Bell and Rogers they charge you $2.00 a month to send your monthly bill

rose-dee · ‎09-18-2016

@recped wrote:

Now here`s where I differ a bit with those who make this subject `divisive`, splitting up your revenue sources is a matter of individual choice based on your business plan and your marketing plan so there is no right there is no wrong, there is no ethical there is no unethical. There is only what works best for you.

My business plan calls for a minimum 75% gross margin on goods and a 30% gross margin on shipping, my marketing plan calls for shipping charges to be listed as a separate line item and to be middle of the pack or less than what other sellers charge.
Personally as a buyer I shop total price, I could care less how you split it up.

I agree that the subject of handling fees should not be particularly "divisive" or controversial. Sellers can do whatever they want to either display, hide, juggle or absorb extra costs. Although there may be no real ethical right or wrong, there is certainly a case to be made for which is a smarter business and marketing choice, more profitable for the seller and more attuned to buyers in the long run.

As I said earlier, consumers in general have become more savvy, more demanding of detail, and less tolerant of being fleeced, all rightly so. It's up to the online seller to recognize how far is too far, how best to attract new customers and how best to keep old customers coming back. If you're at the point where your shipping and handling costs are a significant determinant of your profitability that you must pass on to your buyers, you may be in the wrong line of work.

Since Paypal labels began displaying the actual cost paid for the shipping label (for most, except I believe for Expedited Parcel within Canada), sellers have had to decide whether that will constitute a red flag for buyers. As a buyer, I do glance at the shipping label on a parcel to see if the amount is reasonably close to what I've paid, but of course I'm well aware of the selling end of the picture.

I agree with you that most buyers make their decision based on total cost at the outset, and aren't likely to quibble over a dollar or two less being shown on the shipping label. If they see a difference, chances are they'll ascribe it to small handling fees. That is, unless the difference is outrageous. Or unless the item is rare or unusual and something they dearly want -- then shipping/handling may be less important. Or conversely, where there is a lot of choice on eBay for a particular item, a buyer may not want to pay shipping/handling at all if they can find the item at a lower cost overall, with free shipping.

So I think the method a seller uses to combine or split up price, shipping, and handling depends on a lot of factors, none of which are "ethical" dilemmas, namely the target market, the type of item, the particular buyers' expectations and the competition, as well as the shipping services used and the margins the seller desires.

I'm surprised that you say you have a 30% gross margin on shipping. I don't see how a seller could sustain that margin on shipping and still offer reasonable shipping and competitive prices on most items, unless the items are of higher value and/or you're using a discount shipping service. I'm reliant on Canada Post, I have no other options -- that's probably a large part of the answer!

Come to think of it, a more interesting and relevant discussion might be what sellers plan as their gross margins on shipping overall, and what their rationale for that margin is. Mine is closer to 10%, with higher-priced items absorbing more. However, unlike most eBay sellers I have no cost of acquisition on my main line of items (I'm the publisher/manufacturer), although I do have development, printing, and packaging costs.

As a result, I can afford to be somewhat more generous to my buyers where shipping is concerned, and have been mostly able to avoid rolling too much of shipping/handling cost into item pricing -- that is as long as Canada Post doesn't keep increasing prices by 25% every year and the $CDN stays lower than the $USD.

rose-dee · ‎09-18-2016

sylviebee wrote:

What exactly is a handling fee?

Is it a surcharge that's added to the bill to compensate sellers for handling the item after it's sold?

or............

Is it the seller's total profit and all the handling that goes into a sale from start to finish.

That is: Does a 'handling fee" compensate sellers for a select portion of the work that goes into selling an item, or is it really total profit?

Everyone has handling fees, but calling profit a handling fee always hits a nerve so why do it?

While I agree with you that displaying handling fees can be toxic for buyers, I think you're parsing this issue too much, in the way sellers would do, but not from a buyer's perspective. I doubt most buyers really care (or even know) how a seller arranges profit margin on an item, as long as the bottom line seems competitive and affordable.

Buyers are unlikely to appreciate how handling fees equate to the seller's profit, so I don't see that hitting a nerve. What I do see hitting a nerve for a buyer is simply the idea of tacked-on charges, of whatever kind.

From the buyer's viewpoint, I think it doesn't matter what the handling fee represents for the seller, but it does matter that it means extra money out of the buyer's pocket. So at the very least, displaying a small handling fee as such is in my view both pointless and counter-productive for the seller. Having it displayed by eBay as "shipping & handling" lumped together can also be problematic if the seller is trying to roll too much of a handling charge under that umbrella. It's one of those shoot-yourself-in-the-foot strategies to make extra money. Sooner or later buyers will notice.

momcqueen · ‎09-24-2016

On this topic, I suspect I paid a $13 handling fee on an indestructible $50 item where postage will only turn out to be $10 of the $23+ I submit for shipping and handling. That seems excessive to me but I will reserve judgement until the item arrives.

I find it odd that out of all the things that ebay controls about what sellers can and cannot do and precisely how they may do them, that there are no actual guidelines or expectations set for handling fees. Only that they not be 'excessive' but with no terms defined as to what that may mean.

In closing, I'll leave the thread with the final word from ebay Canada staff on the subject. It's from http://community.ebay.ca/t5/Weekly-Chat-Session/September-21st-2016-Weekly-Session/m-p/351583#U35158...

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(0)View Listings

eBay Employee

Posts: 2,002

Registered: ‎07-26-2010

Re: September 21st 2016 Weekly Session

in reply to mjwl2006

‎09-22-2016 03:52 PM

@mjwl2006 wrote:
And now for something completely different. Handling fees.

As I am aware (as are most of us) eBay does not set a recommended amount for handling fees, leaving that decision to the individual seller. eBay policy does, however, prohibit 'excessive' handling fees.

What is considered 'excessive'? An amount equal to the cost of shipping? Or 20 per cent or more the asking price of the item itself?

It it would help buyers and sellers alike to know how to set and meet expectations. http://community.ebay.ca/t5/Seller-Central/HANDLING-FEES-PRO-or-CON/m-p/351027#M68209

Thank you.

Handling fees are meant to help seller offset the cost of shipping supplies and the actual work involved in packing an item adequately. The expectation is that the fees stated on the listing reflect the true cost of shipping supplies and a reasonable amount for the work involved. For example, if an item is very fragile and requires special care when packing such as building a crate around it, we would consider that when assessing the legitimacy of handling fees. I can't really give you a rule of thumb as this would be evaluated on a case by case basis; these charges simply have to be reasonable to us and to buyers based on the information included in the listing.

sylviebee · ‎09-24-2016

Not any more.

I think someone must have brought it to the attention of the powers that be and they stopped that nonsense months ago.

They still try to tack on a dollar or three for that useless magazine they want to push on everyone that goes straight from the in box to the trash 95% of the time.

My Pet Peeve: Rogers.

Every time you make one small change they re-arrange everything else so they can nab a buck or two where you'r not looking.

momcqueen · ‎09-24-2016

@sylviebee wrote:
Not any more.

I think someone must have brought it to the attention of the powers that be and they stopped that nonsense months ago.

They still try to tack on a dollar or three for that useless magazine they want to push on everyone that goes straight from the in box to the trash 95% of the time.

My Pet Peeve: Rogers.

Every time you make one small change they re-arrange everything else so they can nab a buck or two where you'r not looking.

Ha! I know. At one time it was a $50-charge for making changes to your service level or options during a contract. I had to call Rogers eight consecutive times to correct mistakes they had made (either deliberately or accidentally) with signing me up for options I had not subscribed to when I called to cancel the previous one I had not bought into. Eight. Times. By the eighth, I could hardly not scream into the phone. It was unbelievable. If they were able to correct the error, they made another one or two doing it. This was about four years ago. I thought I was going to lose my mind.

sylviebee · ‎09-24-2016

@mjwl2006 wrote:
Ha! I know. At one time it was a $50-charge for making changes to your service level or options during a contract. I had to call Rogers eight consecutive times to correct mistakes they had made (either deliberately or accidentally) with signing me up for options I had not subscribed to when I called to cancel the previous one I had not bought into. Eight. Times. By the eighth, I could hardly not scream into the phone. It was unbelievable. If they were able to correct the error, they made another one or two doing it. This was about four years ago. I thought I was going to lose my mind.

I've spent so much time on the phone with them getting charges deleted that they added for stuff I didn't ask for .............. like you. I want to scream at them big time.

Their latest scam: I like to have a hard copy of my Rogers bill because it's the only way to stay on top of the bogus charges. They keep trying to get everyone to go to online billing only because it's very hard to follow and they can do all sorts of add ons without getting caught.

When the PO was threatening to strike they stopped sending out hard copies of the bill using the strike as an excuse. Took another phone call to get the bill again after I missed a payment because they didn't send the bill as instructed to do.

momcqueen · ‎09-24-2016

Grrr.

Exactly the reason I insist on hard copies too.

momcqueen · ‎09-24-2016

But it must be lucrative for them to continue doing so. Most people don't check their bill with a fine-tooth comb for changes they didn't authorize, it is auto-paid.

sylviebee · ‎09-24-2016

Yes!

In fact, I've stopped checking my bill because I end up with a headache every time as there is ALMOST ALWAYS something wrong.

I spend hours clearing up an overcharge of a few dollars / month (which adds up over the years) but it's usually not worth the headache. Like you, every time I call them to correct one error, I get a few add ons the next time the bill rolls around which I didn't ask for.

These are not mistakes.

That's the principle they work on and they make a lot of money operating that way.

momcqueen · ‎09-24-2016

It's criminal. Snicker. Maybe they call it a 'handling fee'.

widgetc · ‎09-24-2016

Option A. $50 cast-iron frying pan FREE SHIPPING

Option B. $30 cast-iron frying pan and $20 shipping

Option C. $20 cast-iron frying pan and $30 shipping

Apples to apples, right? Each costs me $50 and badda boom, I have a new frying pan with which to cook or clobber people.

------------------------------------------

If I buy one pan they are all the same to me. If I buy more than one Option C may well be better if the seller combines shipping. Building shipping into the price can hurt buyers of multiple items.

sylviebee · ‎09-24-2016

But the truth is that we have a company like Rogers billing for extras they can slip by consumers presenting as an example of how to conduct business.

It's no wonder that eBay sellers feel justified in little add-ons (handling fees) as well.

femmefan1946 · ‎09-24-2016

Cost charged to the buyer above the actual cost of postage. But lumped in with the Shipping charges. Like a seller sees done when they set up their listing to sell.

Depending on how we buy our postage, our discounts can cover the handling costs.

Paypal shipping labels have 8% to 18% discounts from PO counter prices.

Small Business Solutions cardholders get a 5% discount at the PO counter.

And those of us who use discounted mint postage stamps get 20% (or sometimes more) off the face value of the stamps.

And all of these are invisible to the buyer.