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B-B Bros. Shipping & Handling Fees Explained

June 19, 2011

In May’s Month-End “Business” Update I made note of the fact that I believed it was time to provide my eBay Store customers with a detailed explanation of why they pay what they do for shipping and handling from B-B Bros. Sports Collectibles.

I feel this has become necessary for a couple of key reasons:

First, it is because of the penalties I am receiving through eBay’s Detailed Seller Ratings that are resulting from the completely unrealistic and ill-informed opinions of a select few customers (this article outlines some of my overarching concerns related to DSRs).

Secondly, many of my shipping fees will be changing as of July 6 when eBay introduces a higher fee structure for sellers.

Below you will find a chart that outlines exactly what it costs me to ship a single card sold at my average per-card sale price through standard, basic postal delivery.  This is why I charge what I do for shipping and handling fees for trading cards on eBay; they are the real costs involved in sending an item to a customer.

Following that is a more detailed explanation of those fees, including the reasons for the changes to my fees.

Canada

USA

Overseas

Stamp

$1.41

$2.33

$4.66

Bubble Envelope

$0.27

$0.27

$0.27

Team Bag

$0.03

$0.03

$0.03

Top Loader

$0.09

$0.09

$0.09

Penny Sleeve

$0.01

$0.01

$0.01

Additional fees directly attributable to shipping charges

$0.64

$0.77

$1.19

Cost to B-B Bros. to Ship Package

$2.45

$3.50

$6.25

 

New Shipping Charge

$2.45

*was $2.50

$3.50

*unchanged

$6.25

*was $5.50

New Additional Item Charge

$0.30

*was $0.25

$0.30

*was $0.25

$0.30

*was $0.25

Since I am a buyer on eBay just as much as I am a seller, I know how annoying high shipping charges can be.  For that reason I have made it a point to try to keep my fees to the bare minimum that I can charge without losing money along the way (that doesn’t exactly help the whole idea of making my hobby financially self-sufficient does it?).

In spite of some substantial tax increases, coupled with even more substantial fee increases courtesy of eBay, I have been able to discover and refine some efficiencies in the acquisition of my shipping supplies and materials that will allow me to introduce a new fee model that helps to offset a significant portion of those increases.

In fact, the efficiencies I found have actually allowed me to maintain my base price for shipping to the United States and also decrease my base price for shipping within Canada!  These are both things that I did not expect would be possible when I set out to redefine my shipping policies, but are certainly a welcome surprise.

The end result is only a minimal overall increase to my shipping fees, an increase that is substantially lower than I had been expecting to report.

The only substantial increase relates to overseas shipments.  When I sat down to do the math for my revised fee structure, I received quite the wake up call.  If my current charges were to remain the same as of July 6, I would be losing in the neighbourhood of 30% of the sale price of my item by subsidizing the overseas customer’s shipping fees.  This is in addition to the fees charged by eBay and PayPal that are attributed to the final price of the item, fees that I do not incorporate into my shipping and handling charges.

So with all apologies to any overseas customers, the scenario that has been taking place simply had to change.  Hopefully if/when those customers see the table I have outlined above they will be somewhat understanding about why those fees have changed so significantly.

*****

And now, my more detailed commentary related to the fees outlined in the table above for those who want or need it.

—–

In terms why I believe the article became a necessity, I will say the following:

As best I can tell, those select few unrealistic customers that I mentioned prior to the table seem to look at the number on the stamp and believe that is the only cost involved in shipping and therefore that is the only thing they should be charged for.  As the table clearly outlines, the reality is that there are many more expenses involved in shipping an item.

Another reality is that eBay itself deems it appropriate for a seller to build those additional expenses into his/her shipping and handling fees, stating “shipping costs and related service charges” are allowed to be applied.

Unfortunately, it has reached the point that the small group of buyers I referenced are now costing me money because they ignore eBay’s own policy on acceptable shipping and handling charges.

By leaving what I believe are unjustifiably low shipping-related DSRs based on their opinion of what it should cost as opposed to the reality of the situation, those select few customers have (at least temporarily) eliminated my ability to qualify for discounts from eBay.

eBay, however, offers absolutely no support to sellers in situations similar to mine beyond sending a generic e-mail providing suggestions that are nothing short of bankruptcy-inducing for my “business” if I were to implement them.

As a result of losing my discount qualification, my costs go up and my ability to offer sales and discounts to the customers who do understand the realities of selling online is drastically reduced or completely eliminated.

In short, the few are ruining things for the many.

I also believe that part of the cause of these opinions being formed relates to the poorly constructed shipping policies of some of my fellow sellers.  I am shocked by the number of sellers I see offering shipping services at rates that I am certain causes them to lose money on that portion of the transaction.  Some fees I have seen just barely cover the cost of the stamp needed to ship the item!

While not substantial on a one-off basis, these self-inflicted financial wounds are certainly substantial from a percentile perspective and can eventually add up to a significant sum in terms of an actual dollar amount.

I’m not trying to tell other people how to run their businesses, I simply don’t see how losing money (unknowingly or not) makes any sense when the entire goal of selling on eBay is to make money.

My hope is that this article can help educate eBay buyers on why sellers charge what they do for shipping and handling.

The table I provided above outlines my personal shipping cost recovery formula. This ensures that my customers do not pay more than it costs me to ship while also making certain that I do not lose money along the way.

While the formula used to create the table relates to my personal situation, the realities for other trading card sellers cannot possibly be that different from my own since even at a bulk-buy rate, I am not paying a significant amount less for my supplies on a per-item basis.  Therefore, if someone is charging substantially more than I do, I genuinely believe they are being dishonest about the real costs involved.

A perfect example involves a guy who once charged me $15 for the exact same level of domestic shipping that I will be charging $2.45 for, justifying the charge by saying all of the things included in my table added up to that much to ensure safe delivery.  Clearly, he was trying to take advantage of buyers.

—–

Regarding the actual items that are included in the table, there are a few things to address.

First, I should note that the efficiencies I spoke of relate to the fact that I now buy my shipping supplies in bulk from online wholesalers as opposed buying in smaller quantities from local retail stores.  This has allowed me to reduce my costs substantially in preparation for this revised fee structure, helping keep the fee increases in check.

This was not a difficult process to undertake and definitely one I recommend other eBay sellers explore if have not done so already and find themselves in a situation similar to my own.

Secondly, an item included in my breakdown that I am sure will cause some disagreement is the “additional fees directly attributable to shipping charges” line.  The debate I foresee about this item is that eBay states in the same eBay policy that I referenced above that “related fees…” such as “…eBay and PayPal fees should not be added”.

As of July 6, eBay will be applying its “Final Value Fee” to the entire transaction (the item plus any shipping charges) rather than just for the item itself.  With this soon being the case, I find it completely contradictory for eBay to say that a seller cannot include eBay and PayPal fees in his/her shipping and handling charges, yet the company itself is creating a new fee sellers have to pay that is related directly to shipping and have nothing to do with the item being sold.

From my point of view these soon to be added fees fit the definition of “shipping costs and related service charges” to a tee.  They have absolutely nothing to do with the item I have for sale and because of this I have incorporated them into my revised structure.  In fact, after going through the numbers in detail, I have discovered that if I didn’t take this approach I would nearly be in a position that would see me paying more in eBay and PayPal fees than I would earn for the item itself in some cases!

Again, not exactly a viable way to move toward a financially self-sufficient hobby, is it?

I should add that these are the only fees from eBay or PayPal that are included in my shipping charges, as all other eBay and PayPal fees are incurred by me.  Thankfully the savings I have generated in my shipping supplies and materials that I keep referring to have offset the introduction of these new shipping related fees, limiting any impact to my customers.

Some buyers may disagree with this position, but I am all but certain that sellers would agree with me.  I – along with many other eBay sellers – am tired of seeing eBay take a larger and larger chunk of my the money I generate from selling my items while offering sellers less and less in return.

*****

The math required to establish a sound shipping fee structure is not all that complicated and I would be happy to share my formula with anyone who is interested in obtaining it from me.

A small amount of work can save a seller some money (or allow them to lose less of it to eBay) and save the rest of us from having opinions formed that do not mesh with the reality of the cost of shipping and harm our ratings and reputations.

If you are interested in getting more information from me, just leave a comment below, shoot me an e-mail at bb_bros@hotmail.com, or connect on Facebook or Twitter.

As always, I would love to hear what fellow eBay-ers and collectors have to say as well.  Feel free to get in touch any time, I always appreciate the feedback of those who take the time to read what I have to say.

Until Wednesday, all the best in your collecting pursuits!

Ryan

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