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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/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.
 MORE RESOURCES updated Thu. February / 09 / 2012
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HTC Launches First 4G LTE Smartphone in Europe3G.co.ukVodafone in Germany are just getting ready to launch their 4G network, but in the UK the 4G auctions are yet to even take place. The HTC Velocity, which is similar to the HTC Vivid LTE that launched in the US, should be released in the next few weeks ...and more » |
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KeyDrive Acquires Moniker and SnapNamesBusiness Wire (press release)... investments Key-Systems®, Moniker® and SnapNames® offer a complete suite of domain name products and services worldwide including access to over 300 domain name extensions, full-serve brokerage, live and online auctions and monetization services.and more » |
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LEAP event supports literacyKPCnews.comTickets for Saturday's event cost $50 per person and include food and beverage tasting, live entertainment by Dan Heath with the Paradise Band, along with the chance to bid on gift items at two auctions. The evening will feature a variety of food ... |
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College show a dress-up affairVictoria Times ColonistIt includes food, music, games, prizes and auctions. Casino Royale has a James Bond theme, so guests are encouraged to wear tuxedos and gowns. The decor of this year's fundraiser will bring to mind Montenegro, one of the settings of the 2006 Casino ... |
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Hart, S - Superfast BroadbandDeHavilland (press release) (subscription)In reply, Mr Hart asked about what could be done to help those left out of the plans. Responding, Mr Hunt said that Ofcom's announcement for 4G spectrum auctions would mean that 97 per cent of the country would be reached, but more should continue to ...and more » |
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