Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Dec 30 2018 15:17:56

Sellers See Higher Costs Going into the New Year

By: Ina Steiner

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Online sellers face higher costs going into the New Year, including eBay and Etsy commission fees that automatically increase when shipping costs rise. Amazon has also made changes to fees that take effect in mid-February, though some fees are actually decreasing.

All major shipping carriers are raising rates, and the higher cost of shipping has a ripple effect for merchants who will be paying more in shipping costs to receive inventory and supplies in 2019. And because suppliers also face higher shipping costs, they may raise prices of their goods.

Note that in addition to higher rates, UPS and FedEx are also raising shipping surcharges and fees.

USPS rate change: January 27, 2019. In addition to rate change, USPS is also making structural changes, such as moving First Class Package Service (FCPS) to all zone-based pricing.

UPS rate change: December 26, 2018 by an average of nearly 5%.

FedEx rate change: January 7, 2019 by an average of nearly 5%.

As we noted in the EcommerceBytes guide to the USPS 2019 rate increases, rate hikes get complicated. For example, sending a 13-ounce package to Zone 8 via USPS First Class Package Service will cost an extra $1.43 in 2019. However, a 15.999-ounce package to Zone 8 will rise by 59 cents. (Commercial rates.)

Sellers who offer "free shipping" to buyers will eat those higher costs. 

And since eBay and Etsy charge commissions on price plus shipping, sellers will pay more whether or not they pass along shipping costs to buyers. For example, the extra $1.43 for a 13-ounce package sent USPS FCPS to Zone 8 would cost an eBay seller an extra 14 cents based on a 10% commission fee, and would cost an Etsy seller an extra 7 cents in commission fees (5%).

The extra 59 cents for a 15.999-ounce package would cost eBay sellers an extra 6 cents and would cost Etsy sellers an extra 3 cents.

Multiply those extra commission costs by the number of packages sent, and it quickly adds up, eating into sellers' margins.

The crucial takeaway: it's imperative that online merchants adjust their prices and shipping rates to account for the increased costs of doing business in 2019.

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Readers Comments

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: toolguy

Sun Dec 30 17:27:23 2018

So 1st packages will be "zone" based

It would be nice if eBay added a feature where a seller could add 10% to the actual cost of shipping to pay the shipping FVF.

I know that would be a HUGE feat for the eBay IT department to implement. . . .

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: sasikat9 This user has validated their user name.

Sun Dec 30 18:42:22 2018

Just added a dollar to all shipping costs of our items. WE DON'T SHIP FREE PERIOD. You buy you pay shipping.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: The End

Sun Dec 30 19:31:20 2018

Everytime I adjust for inflation, the bastards raise the price again.
The price of boxes is crazy.
Packing material is expensive.
I'd rather retire than run on this wheel.....

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: HappyOne This user has validated their user name.

Sun Dec 30 19:46:57 2018

Yes the zoned 1st Class package rates will hurt my attempt to sell shipping included on Etsy (“free”). I was finding success on Etsy with this but all good things come to an end. Maybe I will just add 30¢ or 40¢ and see how it goes. East coast buyers will pay more than West coast buyers. With more and more States getting on the Sales Tax bandwagon maybe more buyers will go to traditional Craft Fairs and Flea Markets? Cash is always king.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: ebayout This user has validated their user name.

Sun Dec 30 20:19:48 2018

I prefer to remain stoic. EVERYBODY is affected, and hopefully so will the Chinese.
As for the incremental to the 10% shipping fee, I see it this way...
I charge actual Priority Mail shipping. The discount I get thru ebay labels will generally cover the 10% fee, regardless of any increase. Zero sum.

Plus, I'm cutting back 90%...$40K to $4K or less...next year.
Much less to anguish over.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: Sierra This user has validated their user name.

Sun Dec 30 22:59:40 2018

@The End - Get free packing materials and boxes on NextDoor & Craigslist. Use free Priority Mail boxes when you can, but if you need to buy boxes, Staples web site (NOT in-store) has reasonably priced boxes or Walmart for smaller quantities.

I started doing more fairs & markets this year. Planning on 4 in 2019 for sure ... and hopefully a few more.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: TomH This user has validated their user name.

Sun Dec 30 23:14:32 2018

Most of my stuff is in the 2 pounds range or more in shipping rate. Pay for shipping or not, I just do not care any longer. No discussion.

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by: justchangecarriers This user has validated their user name.

Mon Dec 31 00:27:53 2018

This is horrible with the zone pricing.

I now have no predictable measure for cost of shipping. I sell a lot of first class items. Rates are going up crazy amounts for first class. Ebay basically forces you in to fast n free shipping for site visibility. Now I have no control over shipping. Adjusting 6000 items for shipping costs isnt feasible. Anyone from a coast average shippiing is going up to a over a dollar first class. For small items thats a huge chunk of the cost. Not feasible to ship 5-6 dollar items anymore because I have no idea what its going to cost me in shipping. Shipping within the same state for 9 ounce packages is going up almost 50 cents per package. This is nuts to me.

Im sure China will remain immune to changes. This isnt good business USPS. Creates more uncertainty and frustration. The whole point of first class was it was light and the post office offered a tiered rate cost per ounce. Going by zones for light packages is ridiculous. Gotta keep their cushy job pensions though financed prepaid in their budget for future workers not even born yet. This is a nightmare for me.

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by: justchangecarriers This user has validated their user name.

Mon Dec 31 00:31:48 2018

You would think with more people geting items online and items being shipped prices would come down due to volume and competition. This feels like a racket to me. USPS is too bloated and needs to be cut back if they cant make money charging their crazy priority rates already. Now first class is going to skyrocket too and theyll for sure be increasing the zone rates every year just like priority.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: DeathFromAbove

Mon Dec 31 01:19:07 2018

Fuel prices are down - package volume is exponentially UP.  What justifies a price increase exactly?  I remember when UPS/FedEx used to blame fuel and added "fuel surcharges" to their rates.  Well fuel costs less than it did in 2005, so what's the excuse now?  They never backed off the "fuel surcharge".  They don't need to do this to "cover costs".  That means someone is getting a raise, and it's not the rank and file.

Whatever - it will just get passed down to buyers, and drive inflation even further.  Stagflation and recession here we come.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: The End

Mon Dec 31 01:25:18 2018

Thanks Sierra  :o)

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: Marie

Mon Dec 31 02:16:20 2018

"Sellers who offer "free shipping" to buyers will eat those higher costs."  Why would sellers choose to "eat" these costs?  The sellers I know are in the process of raising pricing on all their Free Shipping listings to accommodate the upcoming shipping increases.  

We go through this every year.  It isn't new.  It takes a bit for buyers to get use to the increase in listings with free shipping or the increase rates for those that state shipping separately.  But it isn't like Ebay or Etsy or Amazon are the only places being hit with these increases.

Ebay and Etsy are not the only sites that charge a commission on S&H.  Amazon does too.  However unlike Ebay and Etsy, I can not raise my shipping rates on Amazon to cover the increase in shipping costs.  Amazon sets my shipping rates and they haven't raised them for sellers in years.  It may be different for large sellers, but I'm just a small seller on several sites.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: Marie

Mon Dec 31 02:19:02 2018

@toolguy

You can do that if you use calculated shipping.  You are allowed to put in a percentage of figure for handling fees.  So use it as you see fit for your needs.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: hawk This user has validated their user name.

Mon Dec 31 05:44:40 2018

why are all these billion dollar companies so intent on destroying good business and especially good hard working people with one thing ? GREED !! and why isn't ebay and etsy being charged with theft for grabbing fees off shipping when they have nothing to with it. they should be helping sellers , not getting rid of them because of GREED. come on. when's the fee for taking a whiz coming ? sooner or later they will pay for their crimes. it just takes too long.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: Chicago48 This user has validated their user name.

Mon Dec 31 06:43:14 2018

This is a good video to watch:  eBay Charging Sellers 25% or MORE Soon??? on YT.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: Timbo This user has validated their user name.

Mon Dec 31 09:19:29 2018

It's just short of criminal that USPS is raising rates again! Meanwhile the Chinese continue to take advantage and laugh at us with their lucrative e-Packet deal with USPS.

This is a slap in the face to everyone in America who has supported USPS over the years!

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by: Mark4 This user has validated their user name.

Mon Dec 31 10:54:49 2018

Please Amazon launch your shipping service!!!!!!!!

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

This user has validated their user name. by: toolguy

Mon Dec 31 11:10:50 2018

@ Marie

It's been years since I used calculated shipping.

I'll check it out, Thank You

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: dans parts This user has validated their user name.

Mon Dec 31 11:25:36 2018

USPS to zones for 1st Class means the end of any Flat Rates for me.

I'm busy changing 4000+ listings over to calculated, plus handling.  I figured that $1.75 for handling will pay the 10% eBay fee, plus insurance, and try to keep things as reasonable as possible for my customers.  I'll make a little on orders close to me, and break even or lose a couple cents on Zone 8.

Until I get them all changed, I'll just have to eat the discrepancies.

Such is life.

Going to start in a new market on Amazon this year, and will let eBay dwindle by end of 2019 to about 30%, or maybe less, of what I do now.

Amazon will be different types of headaches, but fewer than on eBay.  Not to mention that losses on Amazon will be MUCH less painful than the ones I'm currently experiencing on eBay.  Pennies instead of dollars.  Of course, quantity of problems could be much more, but I don't think so much so that those pennies gone would equal the eBay dollars gone.  Almost $200 this week alone on eBay snuffed out.  I'd be surprised to see that much in 2 months on Amazon.

Perminate Link for Sellers See Higher Costs Going into the New Year   Sellers See Higher Costs Going into the New Year

by: pace306 This user has validated their user name.

Mon Dec 31 11:43:29 2018

Platforms (sales and shipping services) truly believe that sellers are so hungry to sell their items, that they will go along with almost anything.

Amazon and eBay do it on their platforms, USPS, PS and Fed Ex on theirs. That they may price themselves out of the market (UPS and Fed EX rates are ridiculous) - they dont care/is irrelevant. There are always more "suckers" to take money from.

Smart sellers (like Marie said) just adjust their prices accordingly and move on.

There isnt anything you can do, unless you ship enough boxes per day to get a representative from the company to work with you on pricing (its like 100 pcs a day) OR you find an shipping aggregator who can get you better pricing.

In the end, Amazon has their own shipping plus they get a deal from USPS, eBay just get its VIG (being a good mafia company) on shipping so when it goes higher - they get more - so why "open your mouth and ask USPS for cheaper rates?" - so no one is going to help you.

Do what Marie said - add the costs to the prices of your items and be done with it.

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