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Sat May 31 2008 10:35:34

eBay, Excessive Shipping, and Germany's Radical Solution

By: Ina Steiner

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A few years ago, it would not have been unheard of to win an eBay auction for a Little Kitty necklace for 16 cents and be charged $21 for shipping & handling. That's exactly what happened to one buyer who wrote to AuctionBytes in 2003. Excessive S&H charges were and continue to be against eBay policy, but the problem - rampant on eBay for years - continues to plague the site.

Some sellers are motivated to charge high S&H because eBay charges commission fees on the selling price only. And even sellers who did not charge excessive S&H fees were not necessarily sympathetic to buyers who failed to read the auction terms, though many others felt the pain of competing with those sellers not playing by the rules.

In 2006, eBay began enforcing its Excessive Shipping policy more aggressively. While many sellers applauded the initiative, some complained they became victims of over-reaching by eBay Trust & Safety's department in its enforcement of the policy.

Last year, eBay devised another solution to help reduce excessive S&H charges. It began allowing buyers to rate sellers anonymously for S&H costs through DSRs (Detailed Seller Ratings), which were introduced as part of eBay's Feedback 2.0 initiative.

It also changed its search in two ways. First, price sorts were changed to "price & shipping" sorts. And secondly, eBay's reformulated Best Match algorithm began factoring in price and shipping, though it does not provide details on how much weight is given to S&H costs.

In January, it introduced a program called Seller Standards in which sellers were rewarded (both financially and in search rankings) for high DSRs and penalized for low DSRs, with an emphasis on shipping DSRs. It introduced a pop-up warning during the listing process and is requiring sellers specify shipping in all but a few categories.

But apparently, all that is not enough, at least not in Germany, where eBay has introduced maximum S&H costs in 34 categories that include accessories in computer and consumer electronics, jewelry and other categories. Sellers will be unable to enter costs higher than allowed in the S&H field.

How did eBay Germany select the categories in which to impose maximum S&H costs? In translated text from the Germany policy page, it states, "the above categories, the buyer satisfaction as measured by the detailed seller ratings for shipping and packing costs very low."

The policy takes effect on June 15, and sellers in the US are speculating about whether the changes will be introduced on the dot com site.

eBay's problem has always been in judging whether S&H costs for a particular listing really is excessive. Doing so across entire categories doesn't really make a lot of sense. Sellers with higher quality items that may weigh more will be disadvantaged, for example.

How this will play out in Germany, and whether the new policy will migrate across eBay's international sites, will be interesting to watch.




Comments (32) | Permalink

Readers Comments

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: greta

Sat May 31 11:11:45 2008

thank you ina for yet another wonderful article.

yes it will be very interesting to watch.  greedbay has added another reason to list of why boycotting is imperative.  to remain active in their ongoing destruction of honest and loyal sellers and buyers is dysfunctional.  

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eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: bite me

Sat May 31 12:24:21 2008

I think they're doing this just because they don't have the man or computer power to scour listings looking for violators. Most of these sellers are from China or Hong Kong and sell an item for cheaper that what you get it here, but then tack on $60-100 for shipping. Something needs to be done.

I Know if they brought that system here, UPS's eBay experiment at least with small sellers will be over.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Ric Roe

Sat May 31 12:57:36 2008

eBay currently has all the tools it needs to manage high shipping and handling fees, they simply choose not to implement them.

Currently, eBay encourages and condones the abuse they are trying to prevent by allowing sellers to combine handling fees into the cost of shipping. By allowing these figures to be combined, buyers never see what the seller is adding on as 'reasonable' handling costs.

eBay is already preparing to require PayPal for all transactions as evidenced by their attempts to impose the rule in Australia.

To control fees, eBay should require sellers to separate shipping and handling costs in listings. By forcing sellers to declare a handling fee that is separated & defined and not buried in the shipping cost, sellers will be more realistic about the fees they charge, and buyers can choose to avoid items from sellers that charge excessive handling.

To prevent shipping abuses, eBay need only integrate the sellers listed shipping method and weight of item into the PayPal shipping module. Since they are already sharing listing information, it should not be that difficult to incorporate and lock these details in.

By eliminating a sellers ability to quote Priority Mail in their listing and then print a label using First Class to reap additional profit, PayPal could then take the abuse out of the system. Additionally, to prevent weight inflation in listings, lock the weight listed in the listing into the PayPal shipping module as well.

Now the seller is forced to quote an accurate shipping method and fees based on the fact the figures quoted will be locked in and must be used to print the label. Buyers will at least know that the shipping fee they are charged is locked in and the seller will have to spend the revenue received for shipping on actual shipping.

If this plan were used, then the shipping fees buyers would see would be what they end up paying, and sellers would be compelled to be honest about shipping and handling fee figures.

For some reason, eBay always manages to avoid the simplest solutions in favor of more difficult options, it does not have to be that way to resolve shipping and handling issues.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: mark

Sat May 31 13:13:29 2008

This is another great way for FeePay to increase revenues: some sellers will be forced to ''eat'' a loss in postage costs by increasing the item price in order to conform to this new eBay rule. This also means an increase in listing fees AND commission fees. eBay is already pushing the ''free shipping'' option. Of course there is no such thing as free shipping which means that shipping is already included in the item price by sellers. Hence more fees to be paid to eBay. I am a European seller listing on eBay.com. If this measure will be forced on eBay.com I am sure the scenario above will become reality for me and many others.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: bite me

Sat May 31 13:18:50 2008

@ mark

How do you make any money? It seems to me that european postage is even more ridiculous than it is here.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: damon billian

Sat May 31 13:33:15 2008

My personal take is that eBay can only go so far here. Shipping is not just about the cost to send an item via a carrier, it also includes:

packaging costs
packaging/handling time
other costs to get it out (gas, etc.)
larger sellers probably have employees to pay

As a buyer, I've bought items where the shipping may have been somewhat high. But if I save a lot of money from buying it at a traditional retail chain, who really cares? I've saved hundreds of dollars buying some electronics on eBay, so shipping costs are not my first item of concern.

Do I see examples of crazy shipping prices, such as $9 for shipping a cd in the USA? Of course. But buyers ultimately vet these sellers on their own. Buyers do have discretion when buying on eBay, something that I think is being missed with some of these policies.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Jay

Sat May 31 14:22:07 2008

Canadian sellers face extremely high shipping costs with all carriers in Canada. Canadapost measures each parcel and charges volumeweight, a larger parcel to the US could easily cost 45.- C$ (that's almost 50.-US$) to ship, even if the weight is only 4 pounds or so. So most Canadian sellers face shipping cost problems that others never heard of. Delivery time is another issue. Parcels to Europe or Australia arrive faster than the ones to the US (US-Customs checks ?). We are only an average powerseller and most of the time we charge less than what we pay Canadapost. Not to mention packing and handling (it's free). So if Canadian carriers are continuing with raising their fees and ebay pushes even more with cheaper shipping, I am not sure if Ebay Canada and their sellers will survive. To ebay and Canadapost: Just don't beat the seller-cow too much, or it will stop giving milk.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Bob H.

Sat May 31 14:44:26 2008

Here's a possible solution:

Cut the FVF % down and then let eBay charge on the entire amount of the purchase (item + s/h).

For example, on non-store items, buyer purchases $20 item with $5.00 S/H. Seller currently pays 8.75% FVF on a $20 item which results in a fee of $1.75

If eBay reduced the fees to 7% and charged on the item PLUS s/h, then the FVF would be the same (7% of $25).

This would certainly even out the playing field and get rid of those sellers who are avoiding their fair share of eBay fees (which probably drives the % higher for every seller who does compete fairly). In fact, if those ''cheating'' sellers were now paying their share of FVF, eBay could reduce the FVF % even more. Maybe down to 4-5%, which might cap the seller's FVF to $1.00 - $1.25

The other advantage is that buyers would be protected from their own ignorance. If sellers are paying FVF on the entire transaction (at the LOWER %), then there are fewer reasons to try to disguise their selling price with $0.99 sale + $18 s/h.  Assuming that a seller charges $14 too much for shipping, then the  seller avoids paying that extra $1.23 in FVF. The rest of the sellers end up paying more to eBay due to the higher FVF eBay charges.

On top of the fee avoidance, unscrupulous sellers sometimes state that s/h fees are not refundable. So, when the buyer has a problem and returns the item (or the seller states ''just throw it away''), the seller refunds the $0.99 item charge and keeps the s/h fee. They still made their profit with the excessive s/h charge. What a scam!

Of course, with this solution, there might have to be different FVF % for different categories...

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Henrietta

Sat May 31 15:33:44 2008

Back to the drawing board Ric Roe.

1. Who says I have to use PayPal shipping? Or is that another improvement to be mandated? Will you compensate me for increased overhead to do so? The extra time it takes me to use a clunky one-size-fits-all system?

2. Your plan would be the end of combined shipping. Who profits, not the seller, not the buyer, oh yeah, eBay.

3. Are you proposing a universal packing materials allotment? Do I get to use exactly the same amount & type of packing on a postcard (tissue, cardboard stiffener, envelope, scotch tape and one peanut) as a framed and glazed piece of artwork (custom box, spray foam, poly sheets, polystyrene strut inserts, tissue, strapping tape) or an unframed print (tissue, scotch tape, peanuts and a free PM shipping tube)?

Who pays to have each item packed and weighed prior to listing then unpacked if it does not sell?

Who gets to decide what is a fair handling fee? Can we all go after JC Penny, Walmart and Target because they don't charge exact postage costs?

If I am in SD and paying $8 an hour for skilled packers does that mean the San Francisco seller who needs to pay $14 an hour can't charge more? What happens to the Hawaii seller who has to (by law) provide health benefits to all employees working more than 20 hours a week?

While you are at it maybe we should mandate a wet nurse cross trained in diaper changing techniques for buyers and psychiatric nurses to sellers.

Whatever happened to taking responsibility for your own actions and actually (gasp) READING the listing before bidding?

The suggestion to drop FVF% and include S&H is the simplest way to kill fee avoidance and accomplish the goal with minimal venue intrusion into seller's business.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Henrietta

Sat May 31 15:52:58 2008

@ Bob

When I sold on eBay I had a guarantee. Don't like it send it back. If you bought it as a gift for your girlfriend and broke up the day before her birthday, send it back. I don't care why you don't like it just send it back.

When I sent it to you I paid for new packing materials and postage. The Post Office delivered it to you, this is value received by you.

Are you proposing that because you broke up with your girlfriend I should refund you for the postage costs to send it to you? And then to get it back so I can go through all the hoops to get back some of the fees I paid to sell it to you?

If you buy something at any retail store and want a refund you have to return the item. They are not going to pay your bus fare to do it. Is that a rip off?

My prescription for eBay management and the buyers who think all sellers are making megabucks on shipping is that you list, sell and ship 100 different items a month for a year. Then come back and tell us how to do it.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: aussie seller

Sat May 31 17:20:35 2008

you seriously have to wonder what ebay is trying to do with all these changes apart from alienate sellers

either they have no idea what they are doing or it is their intent to discourage sellers from dealing with ebay

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Jay

Sat May 31 17:36:02 2008

Henrietta is right. Thanks for posting. I had a buyer once with a return. He wanted me to pay him 55.-$ an hour, because he had to wait 2 hours in line at the post-office to get a money-order for the payment. Because of the return, we wanted me to pay him those 2 hours plus extra time for packing and shipping it back. Of course he wanted all the shipping costs back as well. The reason for return: The colors of the item looked different on the photos. The story is true.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Boycott Ebay/Paypal

Sat May 31 17:36:31 2008

Here's the best solution: Get your own website and charge whatever the heck you want to charge. It's none of Ebay's business what anyone charges to ship unless Ebay is paying that shipping cost.

This all goes back to the stupid feedback concept. Without the option for buyers to b*tch in feedback (or DSRs) about shipping costs, there would be no issue at all.

When you buy from other online retailers, do you pay the shipping costs, then complain to the company afterwards? Of course you don't. You judge whether you think the cost is fair and decide to purchase or walk away. Why should Ebay be any different?

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Bob H.

Sat May 31 17:41:49 2008

@ Henrietta.

Nope, I never said anything about the seller paying for return shipping. The customer should pay for returns if they don't want it. If it's legitimately broken, then the seller should make it right. One of my customers recently wanted to return an unopened item. I took it back after stating the the buyer's refund would not include the original shipping charge ($4), my FVF paid to eBay, the listing fee, and the buyer agreed. She also paid for return shipping. Once I received the item and verified that the item was unopened, I refunded the money less all of those charges. Since I didn't rip her off in the first place, she was very happy and understood my reasoning.

What I was saying in my previous post is that there are bad sellers who sell an item for $1 and charge $20 to ship it. Then, when the item doesn't work or the customer doesn't want it, the sellers will refund the amount that the buyer paid for the item ($1) and tell them to keep the item anyway.

Because the s/h charges were exorbitant, besides FVF avoidance, the seller still made all that extra money on the initial shipping charges because many of them state right in their listings that ''shipping and handling charges are not refundable''.

Buyer gets screwed. Legit eBay sellers get screwed since we pay the FVF that the scam seller avoids.

It would be nice if all buyers would READ the listings before they purchase, buy that's a pipe dream. So, maybe a system to protect them from themselves wouldn't be bad.

IMO, the solution I suggested earlier would allow for individual sellers to adjust their shipping charges based on factors related to their location, costs, etc.

If eBay would lower the FVF and charge on the total amount, I'd be happier. It levels the playing field and could lower my fees since the scam sellers would now be paying their fair share!

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

This user has validated their user name. by: Bob

Sat May 31 17:45:20 2008

The Germans are used to millions of laws and regulations. So probably the new ebay shipping regulation will not make a huge difference for them, it's just another "stupid" rule they will and have to accept (as always). The new motto: EBAY UEBER ALLES !

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Lisa

Sat May 31 18:32:49 2008

@Bob H.

Do you seriously believe Ebay would lower their fees and not make it up somewhere else? I'll believe it when I see it.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Bob H.

Sat May 31 20:17:28 2008

@ Lisa

If you re-read the post, you'll see where eBay could make up the difference in fees by ending up collecting fees on the entire transaction. They could then lower the FVF % and collect on the entire transaction (including s/h).

The advantage of this is that the scam sellers would start paying their share of the FVF that they are avoiding now because they sell $1.00 items and charge high prices for shipping (which they are NOT currently paying FVF on).

I believe that's what eBay is trying to accomplish with some of their changes (e.g., FREE SHIPPING, excessive shipping charge notifications, etc.) They already know that scam sellers are trying to beat the FVF. The honest sellers are the ones paying for this because we are charged higher FVF to compensate for this.

So, the bottom line is that the honest sellers no longer would have to subsidize the eBay fees for the scam sellers and eBay could then lower the FVF %.

Who knows... maybe we could all end up paying less than we are paying now once the scammers chip in with their fair share of fees. I'd be for anything to fix this injustice caused by the scam sellers.

The benefit to eBay?  One step closer to their dream of creating a better shopping experience for buyers who will no longer get ripped off with excessive s/h fees.

Possible benefits to me and other honest sellers? Potentially lower fees.

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Patricia

Sat May 31 20:32:52 2008

This whole thing could be solved very easily...simply require sellers to give the size and weight of the item and have them estimate how much it will weigh when packed - maybe say something like ''standard size package approx. 3 to 4 lbs''  then a buyer can esaily go to the USPS site and check out the approximate cost and then decide if its worthwhile to bid.  But NOOOOO that's far too much to expect of a buyer - they'd rather pay up then whine about being gouged and so it goes.  There are few saavy buyers/sellers on ebay today who can say they've been gouged by shipping costs.  Shipping costs vary so widely that without the approximate size and weight of an item its almost impossible to judge the shipping cost.  I list in the arts category - a 4 lb oversized painting is going to cost a whale of a lot more than a  more standard size 4 lb package.  This has to be considered or else ebay is beating a dead horse...but then what else is new?  ...and for heaven sake, allow a seller to charge for his packing materials.  I know to properly pack a large painting, large bubblewrap and coreboard costs me almost $6.00!  Ebay needs to stop pressing its seller to eat this cost that cost and their horrendous fees! ...or soon they'll be alone on their site!

www.ACEOart.net

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Buh Bye eBay...

Sat May 31 22:06:30 2008

eBay is NOT a fair trade auction site, any longer...Makes me really wonder why Meg Whitman REALLY left eBay...

Something big & bad is about to happen to eBay and I am one of those sellers who will be gone, before it affects my online business...

eBay, Excessive Shipping, and Germany's Radical Solution   eBay, Excessive Shipping, and Germany's Radical Solution

by: Gaz

Sun Jun 1 00:23:29 2008

eBay have it entirely within their programming power to fix (repair) the S&H issue worldwide within 24 hours ... if they stop worrying about their short term bottom line.

This is currently demonstrated to every seller when they list an item and decide whether or not to add shipping insurance.

All eBay have to do is add a few more "per package" single entries.

For example, if below the S&H / P&P rates per zone, eBay provided -
Packaging & Handling = $x.xx per parcel
Registered Delivery = $x.xx per parcel
Postal Insurance = $x.xx per parcel

Note the emphasis on 'per parcel'.  Those three costs are (by serious businesses) per parcel costs, not per item.

eBay should also allow sellers a brief text message per shipping method - say 50 characters - which become defaults under eBay My Preferences.

So for example, under a regular post office service it might say -
"Post not tracked - PayPal refused if no Registered Delivery - see PayPal SPP terms"

The other factor eBay need to address is the number of geo-zones available to sellers.

I ship from Thailand to worldwide. 100% of my eBay sales are export, even if sometimes it's only to neighbouring Malaysia or Singapore.  Why should those neighbouring countries have to pay the same shipping rate as to Australia or New Zealand - they're only 10% of the distance and 70% of the post office rate.

By tradition, there are 7 continents - why not provide sellers with additional geo-zone shipping region sets - e.g. 7 sets of 3 shipping options?  Again, default settings could be set in My eBay Preferences and then just the shipping price needs adjusted for each listing.  It would also allow far more control on which countries a seller will or will not ship to and at what cost (after risk assessment).

To see a perfect example of that last paragraph in operation - log into http://www.eBid.net and choose your 'home' country site, register for a free "trial" seller account and prep a dummy listing - note how you can add and add and add extra shipping panels with flexible PER COUNTRY destinations if you want to, AND set as many shipping options as you want per country.  So there's a perfect example of an online auction site doing exactly what's needed for shipping.

On that basis, why does eBay not do what the free open source osCommerce shop & cart software does - from a list of every country on earth, select those countries you will and will not sell to.  (bye bye Italy & Greece - your post offices lose over 50% of packages)  The software then remembers your choices and you don't have to choose them again (unless you want to expand or contract your list).

The possibility is there, and there is only one reason eBay will not do any of the above ... the fees they make from disputed and unsuccessful transactions are too valuable to their greed.

Remember the stats for the unearned listing fee revenue from sales that go NPB or buyer cancels - ONE HUNDRED MILLION DOLLARS PER YEAR - that number is in their annual accounts filed with the SEC.  It's not fiction or fantasy, it's fact!  And, if it's not fraud, then it should certainly be malfeasance.

Can sellers ever expect honourable treatment from a company with that sort of data in their annual accounts?

Gaz

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