Calculated shipping and fees... Wow ebay....

[chicweb]

Sorry, I have to vent.....

I sold an item 7.99$. Ebays fees were 3.30$.

Shipping: 8.43 (I added 0.50 of handling for shipping envelope + bubble packaging, etc). So 8.93$.

Now I know they are calculating the shipping and the taxes in their calculations... But I paid exactly what the customer paid for shipping... using Calculated Shipping. I'm being charged for this.

Why am I paying more for shipping that my customer paid for? Those fees added on the shipping is exactly that: paying more on shipping that I didn't even calculated. They KNOW the price was not manipulated... they provided the price themselve.

It would be easy to only charge fees on the only thing we can modify in the calculated shipping: handling fees (would be the 0.50$ here). That would take care of those who tries to manipulate the system... but I'm not. I'm trying to calculate everything and optimize.

Honestly... and seriously.... this is discouraging a lot for a new seller... I'm adding many items per day, bought a lot of stock to sell, just to realize that ebay will not be sustainable because of those fees alone.

It's incredible. I used ads on this item (never again). I just removed all promoted ads on all my items. That's on me, learned my lesson... but sold the item 7.99... I made 2.50 with ads added. Just... wow.  (I'm not even including the cost of the item, here, which brings me in the minus).

How do you all deal with this? Any hints or tips?

[clemowbooks]

But I paid exactly what the customer paid for shipping...

Why?

Don't you have a Solutions for Small Business Card? That gives you a discount of 5% or more depending on the service.

Or you can buy discounted mint postage stamps here on eBay which can save you even more.

https://www.canadapost-postescanada.ca/cpc/en/business/small-business.page?

It's also been my experience that it is not worth selling anything here for less than $9.99, and preferable not less than $9.99 USD.

In addition to the usual 12.5% FVF on purchase price,shipping charge,and sales taxes, there is a 30c service fee on each payment.

Then there is  your procurement cost, your wages at 27c a minute, packaging costs (as you mentioned),and optional costs like Promoted Listings, reserves on auctions, etc.

[chicweb]

I buy the ebay shipping label and print them. We cannot add our own card there.

And if I use Canada post for shipping directly? That same item would cost the customer almost the double to ship. Ebay got that discount for 200g or less.

If I want to be competitive with all those using USPS and their cheap shipping price, I don't really have any choice.

[chicweb]

I just calculated and yes, you are right. The best would be to sell more expensive items. I guess, I will have to sell everything by lot to be able to make more money per item.

Ebay is really hurting themselve by charging fees on the shipping (especially with the Calculated shipping, since they don't have any reason to think the price of shipping is manipulated to go around the system).

I guess I don't have any choice now if I want to continue on ebay... Removing all indivual items less than 10$ and sell them by lot.

[flipistics]

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@chicweb wrote:

Ebay is really hurting themselve by charging fees on the shipping (especially with the Calculated shipping, since they don't have any reason to think the price of shipping is manipulated to go around the system).

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They also want people to offer free shipping, or at least not discourage people from it which is what would happen if people with the full price baked in were charged FVF on everything and not people charging for shipping. The simple matter is that not everything is appropriate for online sales, or you have to be more creative in how you sell them / lot them up etc. It's a learning process that takes a while to figure out, but it's worth it when you do (imo).

[ilikehockeyjerseys]

Selling lower priced items on eBay only makes sense if you master economy-of-scale so that your costs and your time are both kept very low. You need to be in a situation where you are going to list high amounts of the same types of items that can all be photographed the same way, all take the same supplies, and can all be packed the same way. That way, everything from photographing, listing, and packing orders can be done in assembly line fashion.

If what you're selling was $7 and it is under 2CM in thickness, consider lettermail shipping for orders in Canada. You should be able to ship anything under 100g for $1.84 (2 P stamps), and anything under 200g for $3.19. Some people also buy discounted postage from postage dealers to get further savings. 

Assuming I undertand correctly, the buyer paid about $17+ tax for the item (7.99 BIN, 8.XX calculate shipping). That means the item was worth $17 to this person. Lettermail shipping is $5 cheaper than Expedited Lite. So you could have theoretically sold the item for $17 and increase your margin by $5 by switching to lettermail.

Alternatively, you could price the item lower and increase your volume of sales because your shipping cost is $2-$3 instead of $8. 

Lettermail does not have tracking, which means you are not covered by eBay if the buyer stats the item did not arrive. With that said, most people have almost no problems with this. Personally, I get 1 in every few hundred orders.

[reallynicestamps]

It's probably worth searching the Boards for explanations of Cookie Jar Insurance (self-insurance).

I'm burned out on the topic.

[chicweb]

I understand that using stamps would be a solution for some items. That would be for Canada only tho, because I refuse to send things overseas or in the states without tracking. Been burned many times with that in the past.

I just think it's very bad to force us to use stamps just because of those fees on top of shipping. They want us to use their label service and tracking because "it's important for customers", but they slap us on the hand when we do. 

The only choice we now have is to offer cheap shipping without protection at all and the risk of having the postman treat it like regular paper mail, bind it or whatever.

I guess I will sell my low prices items elsewhere or in lots. I wanted to be full-on ebay, but that will not be possible at all in this situation. Not viable.

[recped · Accepted solution]

Three things you can do

1 - If using Calculated shipping offer Retail rates not eBay's discounted rates

2 - The Handling Fee is there to be used, it should cover fees and packaging expenses

3 - Add an amount to the selling price to ensure your net payouts are sufficient to maintain the desired profit margin

[chicweb]

Yes, I just did some more testing here.... I could use the handling to cover some things... Especially because now ebay offers us a discount.

Let's see this situation:

One item cost me 2$ to buy (my cost). I sell it 5$. We could think that we more than double our investment, but that's not true with all those fees.

Let's say it cost me 8.66 to ship using the 200g discount. The customer pays 8.66 too.

If I don't add any handling fees at all, I make 0.61$ (13.03% + 0.30$). Yeah, we don't talk about doubling anymore.

Now, let's say I add 2$ of handling:  Profit: 2.32$. That start to be interesting. Now I doubled, as expected. (Of course, I didn't take into account the real handling fees, but it's just an example here).

Since, before the discount, customers were paying a lot more for the shipping (In Canada), I think we have some room there. 

Need to try and work on this to find a sweetspot.

[chicweb]

Thank you all for your answers 🙂 I think the best way is indeed trying to find the balance with the handling fees and also maybe considering using stamps on some items.

Good community, that's one good point for ebay.

[femmefan1946]

You can use stamps to pay for tracked services.  I sent a heavy item to a buyer in the USA on Friday with a $10 Whale and a $5 Park stamp. At the counter I bought a label to make up the rest of the postage and get a tracking number.

[chicweb]

You can combine the two? Postage stamps AND shipping label?

(I'm in a learning process here, hehe)

[flipistics]

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@femmefan1946 wrote:

You can use stamps to pay for tracked services.  I sent a heavy item to a buyer in the USA on Friday with a $10 Whale and a $5 Park stamp. At the counter I bought a label to make up the rest of the postage and get a tracking number.

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Does doing that allow you to get the SfSb discounts as well?

[ricarmic]

@flipistics "No", but sort of. We stamps on the box kinda folks* get the first level discount (ie 5%) and that's all. I've always qualified for level 4 but am stuck at 1.

Fortunately they levelled out the playing field a bit for us over the counter folks a while ago and we too get the nice cheaper tracked packet rates to the US. That change made a very positive difference for me.

*remember I'm a stamp seller, putting labels on boxes is blasphemous in my realm!!!!

[clemowbooks]

The SfSB discount? Yes. I present my card at the counter.

But.

Since I have a lot of mint postage stamps, purchased from collectors well below face, I also have a "discount" on my cost there.

So if I need $15 counter rate for a service I get 5% off and my SfSB rate is $14.25.

If I then put $14.25 worth (face value ) in stamps on the package, which I bought at a 40% discount, my cost is now $8.55 .

There is no charge for the tracking number, because the stamps paid for the service.

[valuestore]

A) Decide what you expect per sale, whether that be % or dollar amount, say to youself 'unless I make say $20 (or whatever) an item after all expenses,  its not worth my time.  Go look at the sold items, see what the profit was, make your adjustments to the price on active and future items. If they dont sell then consider clearance them at cost and focus on items that will or have generated that amount you want per sale.  B) ITC credits and taxes, get a gst# and claim back gst paid on supplies and costs (ebay fees, purchase of goods)  to sell your items.

[rocketscollectibles]

Shipping tracked cheap items that can go lettermail is one of the biggest mistake some sellers are doing. In my category its common to see new sellers who refuse totally to ship lettermail. They lose money because of their fear of losing money, it's very ironic. You do more by accepting to lose a package/get a false claim once in a while than paying tracking everytime. As someone else pointed, someone paying $10 + $10 shipping is ready to pay $20 for the item. You're the one throwing money on shipping. Lets ignore fees for a rough exemple and say lettermail would cost $3, is it better to do 100% of the time $10, or 95% of the time $17. It's just an easy mathematical business decision. Option 1 after 100 sales you have $1000, option 2 you accept to get false claims and lose some packages, but you have $1700. See how huge is the mistake. The decision to ship tracked should be mathematical by calculating a percentage expectation of item not received claims, not based on fear. 

[chicweb]

Well, there's more to it than just the tracking.

For sending lettermail, the dimensions doesn't fit the quality of our packaging. We send comics using Gemini boxes that are made for comics shipping. That, in itself, is more thick than the maximum for lettermail.

We prefer selling less but shipping the item carefully in respect of the comic book and the customer.

So yes, the customer will pay a bit more for shipping, but the packaging is 100% secure for the item with bubble wrap, gemini box AND a padded envelop.

For vinyls we will do the same. At the end, it's the customer decision to pay less for shipping but taking a risk with the shipping of their collectible or paying a bit more and being sure everything is done correctly to receive it 100% protected.

[rocketscollectibles]

At the end, it's the customer decision to pay less for shipping but taking a risk with the shipping of their collectible or paying a bit more and being sure everything is done correctly to receive it 100% protected

You're the seller it's your decision to set up shipping and create a model that is viable. If they receive their package damaged you'll have to refund in both cases. It's not buyer's responsibility. If i was you i would set up a free shipping model where you ship lettermail, then have an additional option for tracking/better packaging if you want. You for sure can ship comics safely fitting lettermail size. By using cardboard or something.