Losing Sales By Overcharging For Shipping And Handling

As a serious seller on eBay you're familiar with their fee circumventing rules. If not, visit: http://pages.ebay.com/help/policies/listing-circumventing.html.

In a nutshell their rule is that you are not allowed to put an item up for bid for a penny and charge $100 for shipping and handling (S&H) in an attempt to avoid the transaction fee. Since we are not trying to avoid fees we all follow the rules ? right? To a certain extent yes, but many sellers are still stretching the bubble by over charging for S&H in an attempt to maximize their profits and losing bidders in the process - the end result is the opposite of what they hoped for. Ultimately they reduce their sales and although these efforts fit within eBay's policies, when extreme, they are considered an unfair practice by many buyers.

I'll give you an example. I play in a Texas-No-Hold-Em poker game once a month - just a bunch of friends who get together, play a little poker, talk about their lives and have some fun. I thought it would be nice if we had some 'professional-style' poker chips so went to eBay to buy some. I like to think of myself as an intelligent eBay shopper so I watched the auctions for a few days and noticed that the final price averaged $60 for the chips I wanted (retail is about twice that at a local store). The market was determining the price, or was it?

As I watched these auctions I noticed an interesting problem, the shipping charges varied greatly. For the sake of this example let's say one seller was offering S&H at $20, another at $30 and one $50. We'll call them Seller A, Seller B and Seller C. As a buyer, if I was willing to accept the price determined by the market ? in this case $60, then the final cost of the item from each of these sellers would be:

Seller A: $60 + $20 = $80
Seller B: $60 + $30 = $90
Seller C: $60 + $50 = $110

I did some additional homework and discovered the package would weigh 17 pounds, the size would not increase shipping costs and the sellers were all in my state. I went to the UPS and Fed-X web sites and plugged in the needed information for shipping cost estimates. The results were $11 and $17. All things being equal the total cost of the chips should be around $71-$78. So which seller's auction did I bid on? Only one ? Seller A ? and I got the chips for $52, plus S&H ($72). If I hadn't won that auction I may have bid on Seller B's but probably would have lowered my total bid amount by $10. Seller C's auction closed without a singe bid.

Seller A got my business, Seller B may have, and as far as I was concerned, and apparently other bidders, Seller C can go pound sand. The outcome of this example should be pretty clear and it should be obvious by now that you don't want to be Seller C. Although you may get an occasional windfall with less savvy bidders, in the long term your sales will be much less than that of other sellers of similar items.

That's not to say you shouldn't recoup your shipping and handling costs in the process. We're not in business to lose money, but make sure you are not trying to pad your 'profit' at the expense of loosing bidders and ultimately sales. Take the time to do similar research on your own items and market niche and find out where you stand with your shipping and handling charges. If you're fair to your customers they will think better of you for it and in the long run your sales will be better.

© Copyright 2005 Steven Woodward - All Rights Reserved

About the Author:
Steven Woodward is the owner, editor and publisher of the Auction Sellers Network (ASN); a web site for individuals and companies who are serious about utilizing the online auction marketplace for their business. In addition to topical articles, ASN provides an extensive resource center, news feeds, member forums and classified ads. For more information or to become a member please visit http://www.AuctionSellersNetwork.com.

No permission is needed to reproduce an unedited copy of this article as long the About the Author tag is left intact and included. We do request that we be informed where it is posted and reciprocal links will be considered.

---

How To Sell On Ebay: Pricing Strategy

Many new Ebay sellers make one of two mistakes: either... Read More

eBays Hot Selling Books, Find Out Which Books Sell & How To Find Them

Selling books on eBay can be a very lucrative business!... Read More

Seven Steps to eBay Selling Success

More and more people try their luck at selling on... Read More

Online Auctions: 5 Ways Your Business Can Benefit From Online Auctions

Online auctions are now the new gold rush on the... Read More

Game Theory, Nobel Prize, & Auctions - Auction Primer Series ? Part 1

William Vickrey, highly regarded as the founder of auction theory,... Read More

USP on eBay

If you have dabbled at all in the world of... Read More

Selling on eBay - Have You Found the Magic Formula Yet?

Selling on eBay can be very profitable and a great... Read More

How To Save Franchise Fees and Set Up Your Own Ebay Drop Off Store

There has been a flood of publicity generated regarding the... Read More

An Emerging Market in eBay Consignments: The eBay Trading Post (Part II In A Series)

In 2002, the eBay consignments business was born, referred to... Read More

eBay Consignments: The Giant Opportunity Hiding on eBay (Part I)

More and more, people are becoming aware that they have... Read More

eBay Online Auction Sniping Secrets

Since their introduction several years ago, online auctions, such as... Read More

The Secret To Real eBay Success

Q. I hear so much about people who started selling... Read More

Five Ways To Detect Shill Bidders On eBay So That You Dont Pay Absurd Prices

There is as a lot of buzz about shill bidders... Read More

Start Selling On eBay - Getting Started On The Right Foot

You've started your own eBay business and, even though it's... Read More

Auction Seller Guide To Success

When its time to clean-up around the house, some people... Read More

When It Comes To eBay, Don?t Follow The Herd

Q: I want to start an online business. Since I... Read More

Learn How To Be A Successful eBay Seller

Anyone can sell anything on eBay. Open an account, list... Read More

How to Sell Your Crafts on eBay

Artists, craftspeople and photographers are successfully selling their wares everyday... Read More

Get More for Your Money Shopping for Designer Shoes on eBay

The worlds online market place.In just a few short years... Read More

How To Profit Using eBays Saved Search Feature

Did you know that eBay will help you locate products... Read More

eBay After Sales - as Important as the Listing Itself

Your eBay listing has finished and you have made a... Read More

eBay - Tapping Into The Japanese Collector Market

If you owned a skateboard shop in your local mall... Read More

Online Auctions: How To Generate Fast Traffic From Online Auctions

Have you ever participated in any online auctions?Yes, people are... Read More

Finding Products to Sell on eBay

Do you know how many people in US are earning... Read More

Tips on How to Profit from eBay Buy It Now Auction Listings

eBay is an online auction site so it stands to... Read More

How To Cut Your eBay Fees By More Than 90%

Now, are you ready for the REAL TRUTH about selling... Read More

Drop Ship Your Way to eBay Profits

One of the most difficult things to do when looking... Read More

What Ebay Can Teach Us About Success

I flew back to New York from Atlanta a few... Read More

Four Reasons Why You Should NEVER Use Animations In Your eBay Auctions

Inexperienced auction sellers, or those lacking in confidence, often want... Read More

Online Auctions Business

Online auction sites are a great way to find a... Read More

Why 95% of All eBay Sellers Fail

eBay is now the 8th most visited site on the... Read More

Losing Sales By Overcharging For Shipping And Handling

As a serious seller on eBay you're familiar with their... Read More

How to Survive the Jungles of Ebay Selling

Come with me, we are going to take a safari... Read More