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

by: Robrolo This user has validated their user name.

Mon Dec 31 12:18:16 2018

@hawk

Never on Ebay/Paypal side typically(ever) but in this case you had bad apples selling a $100 item for a penny with $99.99 in shipping, what were they to do?

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

by: P.Dorf This user has validated their user name.

Mon Dec 31 13:23:11 2018

@Robrolo

Hawk is correct. They are charging a fee for a service they do not provide.

'what were they to do?' - they should have spent some of their ill-gotten gains on policing the site. Instead it's 'let's charge fees on shipping, blame the shipping gougers' whilst raking it in even more.

I do hope one day, they will have to refund all those unethical/illegal fees.

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: NoMoreEbay

Mon Dec 31 14:13:54 2018

Part of the reason I stopped listing in September was because of all these new fees and price increases.

Airlines charge for middle seats now. It's the way of things. It will backfire on these greedy companies. Historically, constant price increases have not been the answer. The consumer will push back. Just look at the recent housing market report. Look at FedEx's profit outlook. Look at how many good sellers have left ebay.

America is no longer a country. It's a business.

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 14:19:02 2018

@hawk

Why not complain about the rest of the sites that charge a fee on shipping?  There are many as it is certainly not limited to Ebay and Etsy.  How about Amazon and PayPal?  And I'm sure there are others.

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: Rexford

Mon Dec 31 14:39:39 2018

"eBay Charging Sellers 25% or MORE Soon??? on YT."

ebay think that raising pricing on everything will satisfy the stockholders.  eBay management need to take a good look in the mirror.  Constantly raising prices on fees, shipping, etc. is an unsustainable business model.  Too many straws will break a camel's back.

Poshmark has a great business model.  Yes, their 20% fee is high, but the buyers pay shipping and Posh provides the seller a label for every sale.  Buyers don't seem to mind paying Posh's modest shipping.  I am seeing very good sales there.

The drawback is a lot of low ball offers but I never go lower than I am willing to go.  It is a business.  It is all worth it because Poshmark is not all up in my business. They leave me alone.  If you sell there you must be an active sharer.  It is very social.  Don't expect to make a lot of sales there if you aren't actively sharing and building your followers base.

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 14:58:53 2018

"Why not complain about the rest of the sites that charge a fee on shipping? "

'Cause we are talking about eBay (once again)

So ....... exactly WHOS FAULT is it that eBay cant figure out a better business model then to steal from sellers for doing nothing?

Why not just charge to list your items?

We all have the same complaint when eBay charges you to list then doesnt show that listing ...

THATS a pattern - charging people for doing nothing - and then on top of it - condoning theft from buyers, VERO attacking people and more.

Same attitude/behavior - steal as much as you can from people because you know they cant do anything about it.

But yeh - just add a small amount to your sell price and be done with it.

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

by: Silver Ice King This user has validated their user name.

Mon Dec 31 15:04:19 2018

@Pace

Actually Ebay does negotiate with USPS for better rates and usually gets them, they just no longer pass all the gains on to the sellers, but keep it for themselves to help show growth and profits.  This has been the case since that announcement from The Grifter that Ebay had spent 3 days behind closed doors with USPS in negotiations and their pricing was actually higher than everybody else for a couple of months when they finally met the $.06 FCP 1-4 ounce pricing difference with the old "You spoke and we listened". Ebay had actually lost so much revenue to sellers changing sites for shipping that they had to make the change.  So i guess we did speak, but with our money that they lost because of their greed.  They also NEVER did refund that overcharged $.06 per package that they had collected from the sellers while they "Waited on Clarification" as to the actual error being a fact.

Postage revenue is a large revenue stream for them and one that they do not have to disclose to sellers, they just don't bother to pass it on to them.  Ebay has become the best their is at squeezing blood out of the turnips, but eventually they are going to kill all the turnips.  I can't wait to see the new pricing that China gets as soon as our withdrawal from the Universal Postal Union is completed and they suddenly get to pay $10 to ship their Epackets to the US.  The other countries are still in it so they will probably shift their goods to other countries where the shipping is still cheap due to Chinas influence with the Universal Postal Union.

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 15:05:38 2018

There are things this person states in the YT video that is incorrect and some things misleading.  Some is true and some is not.  Not sure why anyone would hold this person out to be an expert on the subject unless it is just that they are parroting things that support the opinion that Ebay is some evil entity.

It also represents that Ebay is somehow doing something wrong because they want to grow their sales and/or bottom line.  So if that is a correct statement, which has been said here before as well, then many companies, to include us sellers that want to grow our business and/or increase our profits are doing something that is wrong.  Really?

I don't agree with everything Ebay does and I have some issues with Ebay that I object to strongly.  But they are a for profit business that I choose to do business with.  We each make our choices of what, where and how we want to sell.

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 16:29:44 2018

@Silver Ice King

The chinese are well aware of the impending postal rate hike.

In fact chinese drop shippers have a very large warehouse in Dayton New Jersey they ship out of.

The listing stated "Sold & Shipped" from the USA!

I was expecting an ePacket but got a 1st class package from Dayton New Jersey. . . .

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 17:58:47 2018

Silver :)

please stop being right all the time - it leaves nothing else for the rest of us to do !


best wishes and a happy and healthy to you and yours

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

by: thebobman This user has validated their user name.

Mon Dec 31 19:16:44 2018

As for raising prices or charging shipping. Lets say a 4GB stick of memory sells for $25 on ebay with shipping included. Are you saying that i can charge $25 + $3.50 shipping and the buyer will actually pay it? Or do i have to charge $21.50  + $3.50 shipping. If thats the case, its really zero sum, and have to go through more effort to figure out shipping costs for all my items in the less than 1% chance that one buyer will buy multiple different items from me. Also, if i include shipping, and the buyer buys 8 sticks from me, i get $200, rather than discounting shipping about $20, or looking like i'm ripping off the buyer charging $28 to ship it when im only paying about $5. Also, i sell a lot of items, that take months, years or even never to sell.

Maybe i bought something because the exact item sold 2 weeks ago for $175, no other listings for it. So i list it for $200, free shipping. Drop it $20/month til its $100, $10/mo until it hits $30, and $5/mo until it hits $15. The throw it out as unsellable.can i raise prices on it? Unlikely. Sometimes i make huge profit, other times a small loss since i pay very little for items like that. Will the price ever recover. Pretty low chance. Am i willing to hold on to it for 10 years to sell it? Depends on the size and what it is, but mostly, no.

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 20:12:40 2018

Whenever shipping costs increase due to carrier increases it is ALWAYS a learning curve for buyers.  At first it is hard when we have to raise our prices to accommodate the increase costs.  But it eventually levels out for buyers once they realize it is everywhere, not just with Ebay sellers.

@thebobman

The problem you describe in your first paragraph is something that is NOT new to this upcoming USPS increase in rates later next month.  But if you sell on Ebay, there is tool called Volume Pricing that you may find very handy.  Or you can use stated shipping with a decreased amount for shipping additional items.

As far as your second paragraph.  It think that is a bit of an exaggeration.

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

by: maxmad This user has validated their user name.

Mon Dec 31 21:01:21 2018

Same old story.......
higher shipping costs = higher fees on shipping for the greedy venues = higher item prices = END RESULT less sales then more fees needed from sellers, a vicious never ending cycle,

Sellers must be stupid idiots or desperate to keep selling on these venues, don't be be fooled, Buyers are not stupid, and Marie, FYI they don't get use to it, they simply use Google to find the best prices,

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 21:33:09 2018

@maxmad

"FYI they don't get use to it, they simply use Google to find the best prices,"

And most of the time the cheapest price is on EBAY

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: iheartjacksparrow

Mon Dec 31 22:05:46 2018

Since probably 95% of what I sell ships as a First Class Package, the new tiered pricing is going to be a nightmare. I'll have to do what I do with Priority Mail, and set the postage costs to the farthest zone, and then refund the overage to all the buyers who are closer to me. I realize the USPS is going to raise their rates every year, but I don't know why they thought this was a good idea, since online sellers have no idea what the buyers' locations will be.  

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

by: maxmad This user has validated their user name.

Mon Dec 31 23:27:57 2018

@toolguy

ebay is the most expensive, you can find most brand name New items way cheaper elsewhere,

ebay is mostly refurbished

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

Tue Jan 1 00:16:26 2019

@iheartjacksparrow

The USPS could care less about on line sellers.

All they know is it cost more to ship an item 1000 miles compared to 100 miles.

I'm surprised it took this long for the USPS to go to zone shipping for 1st class packages. . .

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.

Tue Jan 1 06:24:17 2019

@jack

The problem with your method is that we sell more than 100 items a day. We don't have the time nor do we have the energy to be refunding all day long. It was easier to just add 1.00 to the asking price of everything and then ship it free. Problem solved.

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: RKTOYS

Tue Jan 1 10:33:17 2019

Toy collectors on eBay can't afford to buy anything but ePacket so the postal hike is moot for me.

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

Tue Jan 1 12:57:02 2019

@ Maxmad

I just bought a Hornady Bullet Comparator on eBay it was the cheapest on the internet.

Now I need a Hornady C1000 Gauge, it looks like eBay is once again the cheapest place to buy it. . . .

Amazon's price is $5 higher then eBay's!

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