|Mon Oct 31 2011 23:29:12|
eBay Tells Congress Volume-Based Rates Challenge Small Retailers
By: Ina Steiner
eBay told Congress that volume-based rates are a challenge for small business retailers competing in a world of big retailers. (See Tuesday's EcommerceBytes Newsflash for full story.) eBay was actually referring to the shipping rates that sellers pay to the U.S. Postal Service, but it could have been talking about its own fees. While small sellers pay fees just to have their inventory appear on the site, many of eBay's largest "Diamond" level merchants pay no listing fees at all and are allowed to negotiate rates with eBay.
While sellers have the option of passing along shipping costs to buyers, eBay urges sellers to offer "free shipping" - sellers who don't are disadvantaged in search results. Increased shipping costs either cut into sellers' margins or mean higher prices on eBay, and the marketplace is asking Congress to provide relief to the USPS to ensure small Internet-enabled businesses have access to affordable shipping rates.
eBay is calling on sellers to petition members of Congress to oppose any measures to reform the U.S. Postal Service that would entail an increase in shipping rates for small sellers. According to the petition:
"Affordable shipping rates are particularly important to small e-commerce retailers that compete with large online and multi-channel retailers. Already, small businesses do not enjoy the same volume-based shipping rates that larger retailers command. This price difference is a challenge for small business retailers competing in a world of big retailers. Increases to USPS shipping rates would further jeopardize small retailers' competitiveness."
Most ironic about eBay's petition to Congress is that the company now charges its sellers a commission fee on their shipping costs.