EBay takes on inflated shipping charges
October 25th, 2007 | by mbhunter |EBay has discouraged sellers from inflating their shipping prices for a long time, citing that it avoids final value fees. Until recently, though, eBay sellers could still benefit from inflating their shipping charges a little bit at least, because (1) it could trap buyers who don’t see, or ask, how much the shipping charges are, and (2) the “Sort By Price (lowest first)” option took only the bid price into account, so all of the penny auctions turned up first, regardless of how outrageous the shipping was.
A couple of changes at eBay have made these tricks less effective. The first change is the introduction of detailed feedback for sellers. In addition to giving positive, neutral, or negative feedback to sellers, buyers can now rate sellers on four criteria: accuracy of item description, effectiveness of communication with buyer, shipping time, and reasonableness of shipping and handling charges. So even if the transaction went well otherwise, a buyer can give a seller a low rating on the last item if the shipping was inflated. Further, the seller has almost no way of knowing what a particular buyer’s ratings were, since eBay does not disclose a particular buyer’s ratings to the seller.
The second change, which happened more recently, lies in the way items are sorted by price. The by-price sorting function now includes shipping in the item’s price. This adds transparency to the total price a buyer must pay for the item. What’s more, sellers are encouraged to disclose their shipping prices explicitly, because items without explicit shipping charges are shown last in the sort order, regardless of whether a user sorts by price highest first or lowest first. This doesn’t eliminate inflated shipping prices, but it does take away the “search incentive” for sellers doing so.
This shipping issue is a tough nut to crack, because there are many ways that a seller can justify his/her shipping charges. I choose not to charge for handling above and beyond the shipping charges in my eBay store if the packing materials are all provided for free by USPS, but others may choose to add in something for their time, for other materials, for gas, etc. It’s their prerogative to do so. EBay could charge a final-value fee on the entire cost the buyer pays, I suppose, but this penalizes sellers in the middle of nowhere who have (legitimately) high shipping costs, and who arguably might need eBay the most to grow their business.
These moves are good, and likely will result in more good transactions.
8 Responses to “EBay takes on inflated shipping charges”
By Jerry on Oct 25, 2007 | Reply
Inflating shipping charges may give sellers a quick buck, but in most cases (at least for me as a buyer) it NEVER leads to repeat business! I was once-bitten-twice-shy in that regard, and I now never purchase from people who elevate their shipping charges. I think of it as insurance that I won’t pad the pockets of the eBay scheisters out there. It’s certainly heartening that eBay gives the issue significant thought.
Jerry
http://www.leads4insurance.com
By Patrick on Oct 25, 2007 | Reply
I think this is a great move by eBay. It should make it easier for buyers to understand the total costs, and may even lead to more revenue for eBay. as a seller, I wouldn’t mind it. I have always charged fair prices for shipping (but, I don’t often use eBay, and I do not have my own eBay store).
By Mrs. Micah on Oct 26, 2007 | Reply
That’s one problem I have with them. It makes sense to let people set their own costs, based on area and size of the item (unlike Amazon, which feels safer with its set costs). But I didn’t like not knowing upfront.
By FinanceAndFat on Oct 26, 2007 | Reply
Interesting changes. I have always been on the high side with my shipping charges, but I also disclose the cost of shipping in the item description so only someone who didn’t look at my auction at all and still placed a big would have been ‘burned’ by it. I was never trying to burn anyone anyway, just making sure that I didn’t lose money on shipping an item and I assumed that people bidding would factor in my higher shipping prices when bidding. I never had any complaints (that I know of).
By mbhunter on Oct 26, 2007 | Reply
F&F: A reasonable handling charge is probably all right.
Jerry: I usually figure the cost in even if it’s really high. Some of the best deals I’ve gotten on toner cartridges were from a guy that had outrageous shippping. The total cost was substantially less than from most other sellers.
By BuildAndSucceed on Oct 26, 2007 | Reply
Overall good changes. This should’ve been done a long time ago because it’s very misleading to users who aren’t too “ebay savvy”.
By sellingmythingsonline on Oct 29, 2007 | Reply
Wow, this is an eye-opener. I overcharge a wee bit for shipping to cover my envelopes or boxes, tape, etc. I just put the flat free postage rate right in there on my ad. I also make sure it is in line with what others have put down for shipping the same item. I had not idea this was considered bad form! I thought it was okay to charge even a dollar more, to make up for fees. I thought gouging was when someone was charging a huge amount for postage. I am feeling very foolish right now. I should have read up on this more beforehand. I haven’t sold too much on eBay. No one has complained, except one person who whined in an e-mail to me about the high shipping cost. In that instance, it was exactly how much it cost to ship the item to her,and I explained that.
By Money Blue Book on Oct 30, 2007 | Reply
Well it’s certainly about time! There’s nothing more aggravating than paying $5 for an eBay item with a $35 shipping charge. Some eBay sellers can be awfully sneaky.
Another suggestion I have is for eBay to list more prominently whether the item is new or used. Oftentimes sellers will try to pass off a used item as brand new but get away with it because they never used the word “new”.
-Raymond