|Net Auctions and Auction Information|
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.com/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
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
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I flew back to New York from Atlanta a few weeks ago and picked up 'Business 2.0' magazine for the flight.
Selling on eBay? Heres a Success Tip for Your Online Auctions
Are you planning to sell on eBay? Or have you tried in the past but not had much success with your online auctions? If so, here's a strategy that has worked very well for me.In my experience, the auction lots where I created a useful collection of related items got more bids and closed at higher prices than auction lots that were all one thing.
How To Stop Ebay Buyers From Sniping Your Auction For Less Than Its True Value
There are many savvy eBay buyers who use automated bidding programs, which are referred to as sniping software. Sniping allows the eBay buyer to place an unseen bid in the last seconds of an eBay auction allowing them to win the ebay auction at a very low price if there was no reserve.
Low Cost, High Profit Dream Products To Sell on eBay and Amazon
Finding quality products to sell is the key to continuing success. Keeping a pipeline of low cost, fast moving items to sell is also a must.
eBay Auction Sellers Guide to Finding Hot Money Making Products
You might be one of the thousands of individuals who open a trading account with eBay and dream about making auction selling a full-time home-based business.However, before that dream can become a reality, you need to do many important things while running an auction business.
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