Q: I’d like some suggestions on how to handle shipping charges now that eBay charges fees on shipping. I sell all kinds of things and shipping can vary by location. I charge as high as I think it will be, and refund the buyer if I’ve overcharged. PayPal refunds the fees on shipping, but eBay doesn’t.
A: You are definitely not alone when it comes to trying to figure out best practices for managing eBay shipping fees. Ever since eBay started charging a final value fee on shipping charges more than a year ago, sellers have been scratching their heads trying to figure out the secret formula for managing shipping fees.
One thing is certain: Whether you charge buyers for the actual shipping, or “roll” the shipping cost into the item price, you will be paying a final value fee on it. All sellers know there is no such thing as “free shipping.”
I, too, sell a wide variety of items. Some are lightweight and can easily ship in a small padded mailer or box for $2 to $3 within the U.S., and the cost is the same regardless of where the buyer lives. But other large, heavyweight items can be tricky since the cost can vary so much depending on where it’s being shipped to. You don’t want to scare off potential buyers by charging what they might perceive as “high” shipping, but you also don’t want to end up losing an arm and a leg on the sale by offering free shipping.
If you ‘charge as high as I think it will be,’ you could be turning a lot of buyers off right from the start, and that’s never a good thingThe secret formula
So, what should you do?
That’s a question I’ve been trying to answer myself, and unfortunately there is no one right answer. Managing eBay shipping fees depends on many factors, some of which will take a little research:
- What are other sellers charging for similar items?
- Did completed listings of similar items sell and, if so, what were their shipping costs?
- What did you pay for the item originally? Can you afford to discount the shipping cost or will it cut into your profit margin too much?
- Can you include the shipping cost in the item cost to offer “free” shipping (attractive for buyers) and still make a profit if the item sells?
- Have you had buyers complain about overpaying for shipping and having to wait for a refund?
Pleasing buyers
It’s all about perception these days. In your listings, if you “charge as high as I think it will be,” you could be turning a lot of buyers off right from the start, and that’s never a good thing. Buyers everywhere have been trained to seek out free shipping—it is one of the greatest factors a buyer considers when deciding whether to buy online. (For more about that, check out this article from InternetRetailer.com). The more reasonable eBay shipping fees appear to be, the more likely you are you make a sale.
In your case, I would try using eBay’s “calculated shipping” option so that, at the very least, buyers will see a more accurate shipping cost and know they won’t be overpaying for shipping up front.
If you don’t already own a digital scale, I highly recommend you invest in a one. It will let you give buyers extremely accurate quotes for shipping costs, and help you manage your shipping fees on eBay. Since eBay doesn’t refund the final value fees it charges you on your shipping charges, you can avoid having to refund on shipping entirely if you aren’t overcharging buyers from the beginning.
