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.
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.