One area can waste hundreds of dollars for eBay sellers monthly.
This category of spending is something that sellers of all levels make errors in. Can you guess what it is? Is it inventory? Could it storage or travel? No, it’s shipping. That’s right sellers, it is the cost of mailing your packages.
To start, eBay beginner sellers often err by not weighing their items with all the packing materials. Wrapping materials, mailers and or boxes add weight and postage costs. First class shipping in the United States is up to 16 oz. When an item is heavier than that, the costs to the shipper can rise significantly. Here are the current rates as outlined on the Stamps.com blog. So, even when just starting to sell, a shipping scale is an excellent investment. You can purchase a scale that will weigh up to 50 lbs for less than $20. This page has suggestions on two scales.
Experienced entrepreneurs know that shoppers love free shipping.
Marketing Land reports a consumer study where shoppers say their top consideration when buying is free shipping. Free shipping attracts shoppers and sales. With that in mind, eBay sellers need to look carefully at their return rates. So for instance, items that have no little to no returns, free shipping is a very wise choice. However, for inventory with a high return rate, sellers to need to take a close look at profits.
When an item is returned, a full refund is expected, that includes the “free shipping”. You can charge a restocking fee. Realize that when you do so, you may lose customers to sellers who do not charge such fees. Look at your competition. Sellers that get a lot of returns, can build the cost of returns into their listing price and continue with free shipping and full refunds. Top Rated sellers can get a 10% Final Value Fee discount if their items meet the criteria for Top Rated Plus. Keep that in mind when selecting how you ship.
There is an alternative that can increase vendor’s profits. Charge for shipping.
Using this practice, when the item comes back, sellers refund the product price only. For sellers that get dozens of returns a month, this is a significant increase in profits. In addition, for heavy products, a shipping calculator offers a choice where the shipping cost is adjusted to the buyer’s location. Customers save money purchasing from vendors closeby.
This video discusses when to use free shipping and when not to.
In closing, always keep an eye on your sales profits. If you get few returns, free shipping is your perfect choice. However, if you sell in categories that get a lot of returns, charging for shipping can put more cash in your pocket.