Just a heads-up to anyone reading this. If it sounds like a rant, well....that's because it pretty much is one. I only hope that it is also educational. If I repeat anything that was said in a previous article or guide, then it only serves as fuel for the argument against the policy described in the title.
Just over a year ago, on July 6th, 2011 (Not So Happy Birthday to Me), eBay instated the Final Value Fee on shipping costs. I, like many sellers, contacted eBay to voice my concerns. I was given the usual, "Add your shipping costs to the price, and make it "Free Shipping". First off, anyone who has been to a shipping carrier's facility knows there is no such thing as free shipping. Second, that, for packages of non-First Class category, is next to impossible. Why? I'll explain.
If I ship a 1-pound package from my dropshipper's warehouse to the same local zip code, it costs about $5.20. If I ship it to the farthest point, 1800 miles away, it costs $5.90. So, for me to add the cost of shipping to the price, I would have to add $5.90 to assure costs are covered in the event of a sale to the farthest zip code.
Charging the customer an extra $.70 is no big deal, you say? It gets better. If a package weighing between 1-2 pounds is shipping to the local zip, it costs $5.30. But, to the farthest, it jumps to $9.45. That's an extra $4.15 I'm forced to add to the price to assure profits with sales to the farthest zip code. In addition to the shipping, I have to calculate what the fees on shipping will be for the max shipping costs.
For a 2-3 lb package, the difference is $6.05 and $11.80. For a 3-4 lb package, it is $6.85 and $15.00. After 4lbs is the butter zone when UPS Ground gets cheaper for my warehouse, and USPS Priority Mail pretty much hits the stratosphere. Even with UPS Ground, differences from farthest to nearest zip codes can vary by 10, 20, 30 dollars or more. Add the shipping cost to the price? I don't think so.
This forced me to revise the price on every single item, having to add the fees for the maximum possible shipping. Also, I used to offer different carrier-calculated shipping based on item weight for all items. Now, I can only offer one calculated shipping option per listing because the difference between fees on shipping costs could cause me to lose money on a sale. If I offer both First Class and Priority Mail, and the customer chooses the latter, the fees on shipping will wipe out my profit. Yes, some customers think that Priority Mail is something other than a glorified Mail Package. There is no priority to it. It's just mail for packages from 14oz to 70lbs that don't qualify for First Class.
The point of the Final Value Fee on shipping was to deter those unscrupulous sellers from overcharging on shipping, but in the end, it hurt all sellers by actually making us overcharge buyers by adding on fees. Since our profits don't start until all fees are subtracted, we are forced to add them to the price. Of course, eBay's policy is that we aren't allowed to pass on fees to the customer. I recently had to clarify that to a less-than-knowledgeable representative who kept quoting policies to me.
I pride myself on being an honest seller, who treats all customers fairly. I try to give the lowest possible price while still being able to make a worthwhile profit that justifies the time and effort. eBay should stop thinking from a business standpoint for a moment, and see how it is actually hurting the people that put money in their pockets. Without sellers, there would be no buyers, and without buyers, well...they'll go the way of the dinosaurs. Take care of us, and we'll take care of you.
So, their idea was to keep sellers from overcharging, but actually did the opposite.
Nice going, eBay.
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