(Posted October, 2003):
This article is submitted by Mike Enos, author of a great newsletter devoted to eBay auction topics, you should really consider joining his mailing list, the information is at the bottom.
If you do not yet use fixed S/H prices in ALL of your eBay auctions, then hopefully by the end of this article you will be convinced to do so.
The following information assumes that you are selling on eBay to make money, not as a social or community service. If you are not trying to pursue eBay selling as a business, then this information will have limited value to you. Come to think of it, there is a good chance you will be offended by some of this information, but you will GREATLY benefit. (So read on.. :-)
Why do I ask this question? Many times I will view an eBay auction where a seller is basically giving the item away. The item will sell for $1.00, and the seller charges USPS postal rates. They still have to find a box, pack the item, bring it to the post office, etc... When they get to the post office they will learn that postage is actually $5.40 not the $3.30 the buyer paid. (They forgot to include the box and packing material in their weight) They don't consider that they just paid a listing fee and a final value fee for the item. Don't forget your paypal fee too! They also spent time taking a picture of the item and creating the auction ad. This doesn't even consider the amount of time spent in communicating with the buyer, processing payment, etc..
When I see this I can only deduce that that the seller is lonely with plenty of time available, and using eBay as some form of social club. They should have either given the item to a friend, donated it to charity, or thrown it in the trash.
Some sellers demonstrate this is a less extreme form. How often have you seen an ad where the person says "Email me with your zipcode for your shipping cost", "Buyer pays actual shipping.", "I like to perform slave labor for no wages". (Actually, I made up the last one, but it sure fits with the other two!)
Let's take a few minutes to think about this method of shipping.
"Email me with your zipcode for your shipping cost"
When I see this one I start building a mental image of the seller. This person has TOO much time on their hands. They actually enjoy extended ping-pong email conversations. They love visiting USPS.com and calculating to the penny the cost of postage costs They even offer a menu of delivery choices. "Priority Mail with insurance is $??. without.. First class with ...." You get the idea!
This person has no idea how much time they are wasting doing this. Why in the world would you want to calculate postage multiple times when only one of the people is going to buy it?
Do you know how much time you spend doing this? How much is an hour of your time worth? How much money are you wasting on EACH auction?
The reply might be "But I enjoy doing that. I don't want people to get upset because the S/H cost is too high"
Ack!! If you want to give your time away, then do charity work, don't try to run a business. Each minute you waste is a minute you could have invested in finding or listing additional auctions.
Here is another way you are hurting yourself. It is like you are flying a kite in a lightening storm. But instead of trying to attract a lightening bolt, you are trying to attract someone who will make your auction life miserable.
I will call this type of a auction buyer a "penny princess" or "penny prince" (I don't have time to respond to emails from people who will accuse me of being sexist in my newsletter :-)
Do you know anyone who:
Goes to the clearance section of a store and sees an item regularly priced $20.00 and marked down to $1.00? They then go to the cashier and waste everyone's time trying to get it for even cheaper!
Wants to pay a penny for something and be treated like royalty.
Has so much time on their hands that it is worth nothing. They will spend hours of time over a 25 cent problem. Instead of accepting an imperfection, or being slighted, they will spend hours of time phoning, writing, emailing, and generally harassing anyone they feel responsible. They claim it is for the "principle of it", but in actuality it is because they have no life.
They will stop at nothing to get their own way and make your life miserable in the process.
This is the type of bidder you are attracting to your auction. They will complain that you shipped the item in a dusty box, that the packing is inadequate, that when they put the item under their microscope that there is a scratch three molecules wide, etc...
Concerning the second part of the statement "...I don't want people to get upset because the S/H cost is too high", that makes no sense. Let me illustrate my point. "A person walks into a grocery store and picks up a bunch of bananas which are clearly marked 99 cents a pound. When they get to the checkout do they have a right to complain about the price?" Of course not.
The point?
If you CLEARLY state in your auctions how much you charge for S/H, then the buyer has the responsibility to decide whether they want to pay it or not!
As discussed in a previous issue, you need to take steps to keep people away from your auctions who are going to waste your time, and drive you bonkers!
"Buyer pays actual shipping."
At first glance, you may think that this is a good idea too. But, is it really? eBay has been working hard to tie in Paypal to make it easier for a buyer to pay for his purchase. The goal being to pay as soon as you win or use Buy It Now. Don't you just love it when you get an email from eBay saying an auction item sold, and about a minute later you receive a Paypal email saying the item was already paid for? Sweet!
When you do not have a S/H price posted, you are making more work for not only you, but the buyer. Here is the scenario for a Buy It Now auction where your shipping terms include "Buyer pays actual shipping"
Buyer wins and attempts to pay immediately. He cannot because he doesn't know the shipping cost.
He clicks on the "Ask seller question" button on the auction page and asks "How much is shipping"
At this point we will assume that the person included both their auction ID# and their zip code. (Side point: For some unknown reason, eBay for doesn't tell you which item the questioner is referring to. Anyone know why?) If they did not, then add a few more steps here.
You go and look up the cost at USPS.COM, UPS.COM, FedEx.com, etc..
You calculate their total, update that amount in whatever auction tool you have, email them back with the total, etc..
They then go to Paypal or send a payment some other manner.
See all the unnecessary steps because you didn't include the S/H cost to begin with! This is not a way to make your life OR YOUR CUSTOMER'S LIFE EASIER
Calculating individual S/H rates for each auction is just a bad idea.
Some people are afraid that no one will buy their auction item if the S/H rate is too high. The way to find out is try. Even if you have to re-list it a second time, wouldn't the listing fee be less than the amount of time you would waste calculating individual shipping?
What's that... A question from the back:
"But, I have an automated way of calculating it right in the ad. The user just has to type in their zip code and it tells them the exact amount. "
Well that does make it easier, but will you still have to enter that into your auction management tool and email a total price to the buyer?
Does that include a handling charge for your labor, boxes, packing material, etc..? I don't think so.
Are you packing and shipping for no charge? Then you are missing out on a lot of money!
How To Figure Your S/H Charge
It is real easy to figure out your S/H charge. Find the price to ship the item from your location to the furthest location. That is the price that everyone will pay. With this method you'll never lose money on the S/H, and the closer they are, you'll even make some profit to pay for your labor and supplies.
Most importantly you have reduced the amount of time for BOTH buyer and seller. The auction closes, the buyer can immediately pay. You can immediately ship, and the seller quickly gets their item! It's a wonderful combination!
So why should you charge a fixed S/H charge?
It attracts a better breed of auction buyer.
It saves both the buyer and seller time.
It saves the seller a TON of time and effort.
It makes the buyer much more efficient and profitable.
It allows a much higher level of customer service to be given. (Remember, great service has cost. The people that you want buying your auction items are willing to spend more if they will receive better service)
If you have been calculating S/H for each auction item, you are going to be so much more efficient in your business.
Give it a try and let me know the difference it makes!
Mike Enos
Want to learn how I sell $20,000-$30,000 EACH MONTH on eBay?
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