Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Nov 24 2019 20:40:08

eBay Answers Questions about Shipping

By: Ina Steiner

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eBay answered some uncomfortable questions about shipping posed by a seller during its recent weekly chat session. One was about the ongoing rumor that eBay profits from its shipping label program that lets sellers purchase postage right from its site.

For example, a seller wrote on this thread from January: "I have info from a very reliable source connected with eBay shipping that eBay HAS negotiated a lower rate with USPS and are pocketing that money instead of passing the discount along to us. These eBay insiders also expressed their dismay at this practice but that their hands are tied up upper execs to do anything about it."

In Wednesday's chat, a seller asked eBay moderators pointblank: "Can you confirm that labels are a profit cent for eBay or that the money flows through to Pitney Bowes and the shippers? i.e. do eBay have more of a discount than the Commercial rates they give to sellers?"

The eBay moderator responded, "We work to negotiate discounted rates for our sellers and pass these discounts on to any seller who prints labels on eBay."

That response may not be enough to quash the persistent rumor, nor does it address another possible way eBay benefits from carrier partnerships - you might remember the recent EcommerceBytes Blog post about "positioning discounts" that one carrier offers an unnamed marketplace (thought to be Etsy) as a reward for being a Preferred Shipping Provider (note that the reference to "customer" is the marketplace):

"...if the USPS determines that it has been positioned as the "Preferred Shipping Provider" by the customer, then the customer is entitled to additional "Positioning Discounts" beyond other discounts and growth incentives included in the agreement."

The same seller in Wednesday's chat session also asked what eBay was doing to help smaller sellers that don't qualify for shipping discounts with FedEx or UPS. In an obvious reference to Amazon, the seller wrote, "I see your competition is building its own fleet for delivery and often thus able to do 1 or 2 day delivery. How can eBay remain viable in the long run with ever increasing shipping costs for sellers as the small guys get priced out of the market?"

The moderator replied, "We will continue to strive towards supporting our sellers and giving them an opportunity to compete on an equal playing field, and also work towards improving the shipping options and tools available to our Community to remain competitive in an ever changing market."

You can find the exchange in Message 67 on the November 20th eBay Weekly Chat thread.

One key issue was not addressed during the exchange. eBay (and Etsy) charge commission fees on the total transaction amount (price plus shipping), so every time shipping carriers raise their rates, eBay and Etsy in effect raise their selling fees - but without having to announce a seller fee increase. 

It's long overdue for marketplaces to reconsider that policy for the health of their marketplaces given the ever-higher costs of shipping, but it's hard to imagine companies like eBay and Etsy being able to wean themselves from the easy money.

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Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

by: eBay Shill Buster This user has validated their user name.

Sun Nov 24 20:54:53 2019

Sellers already know eBay has stolen Billions from shipping fees, we pay them 10% tax on all shipping, that is 10% added to our real costs that sellers make no profit on, but eBay does, sure they are getting a commission, if sellers don't like it they can go with PirateShip.com or other vendors.

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

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

Sun Nov 24 21:20:11 2019

Ebay charges the same amount for shipping that Stamps.com does on most items.  Stamps.com would not be in business if they were not making a profit on these sales.  They give Ebay sellers free of the Monthly Fee accounts just to join their service so without a doubt there is a profit being made on the amounts charged to us for postage.  As usual Ebay just cannot manage to tell the truth about anything which is ridiculous when it is so obvious that they are making this money.

Wenig has so entrenched that lying is not a problem that even with him gone the Ebay employees still lie.,  The only way that will end is to clean house, especially those that communicate with the public as nothing they say can ever be trusted anymore and that definitely includes those on  the community team.

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

This user has validated their user name. by: iheartjacksparrow

Sun Nov 24 21:31:25 2019

"We will continue to strive towards supporting our sellers and giving them an opportunity to compete on an equal playing field, and also work towards improving the shipping options and tools available to our Community to remain competitive in an ever changing market."

Does anyone at eBay ever answer a question by actually answering the question? Why does every response have to be so vague and meaningless so that they don't actually say anything? The mod might as well have said "no comment."

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by: Frank Abagnale This user has validated their user name.

Sun Nov 24 23:23:21 2019

Shipping is challenging enough for small sellers so what's the best Ebay can do? They take 10% more.

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

by: toyspast This user has validated their user name.

Mon Nov 25 00:34:51 2019

Can anyone answer the question I have with economy shipping? I don't ship a lot of heavy over-sized items but noticed a month or two ago that the prices for economy shipping were now greatly different through eBay shipping labels and going to the post office counter. It used to be that through online, economy was pretty close to the same as going to the retail location but ran a teeny bit cheaper. Now my most recent example was on a heavy package that qualified as a large package was around $13 if I took to the post office and $29 if I did it online. This has happened now on about three items I've had over the past month or two so it's not a glitch. I haven't gotten any answers from eBay about this. I don't understand why a commercial rate for people that do a lot of shipping is more expensive then someone that has one package to ship and goes into the post office. Makes no sense to me.

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This user has validated their user name. by: Lightning

Mon Nov 25 00:45:17 2019

@toyspast
You are probably getting USPS Retail Ground at the post office, so a lower rate.  You can't purchase that particular service online, only at the counter.  And they make no distinction at the counter for that service, whether you are a general consumer, a commercial shipper, or a large corporation.

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

by: Moonwishes This user has validated their user name.
Web Site

Mon Nov 25 01:24:41 2019

eBay and etsy aren't the only ones making money on the fees they charge for the shipping part of the price. Amazon does as well. Most of my orders go out via FCM Package rate, but at times I ship the same item via PM Flat Rate envelope. My shipping price for expedited shipping is of course more and so is the fee that Amazon takes. I don't have the exact figures as they are on my work computer, but Amazon takes around 40 cents just because of the switch from FCM to PM. Amazon doesn't do a thing to earn that extra fee. It also makes it hard to keep the expedited shipping fee for customers to be lower. When the only difference between two orders is which way it is shipping, I make MORE on the package that goes out via FCM! It isn't a 2-3 cents either. Just how much money do these venues collect daily for all the PM packages that are being shipped each day? I can't even begin to guess, but I am sure it is plenty.

I understand that these businesses are in business to make money and they are doing it in every conceivable way and the more they do it, the less the sellers make. The sad thing is, these venues were making money and plenty of it in the days before they started taking chunks of the shipping prices which meant to fully cover the shipping the seller has to add onto the shipping cost that the venues take some more out of the shipping. In the end the sellers lose as do the buyers because they have to pay more to cover the sellers cost to ship the orders and those that don't have anything to do with shipping. It is a vicious never ending cycle.  

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

This user has validated their user name. by: Marie

Mon Nov 25 01:52:19 2019

Why is this subject primarily addressed to Ebay.  Speaking specifically about USPS as that is where most of my experience is with on all the sites I sell on.  Ebay's rates are for First Class Package Domestic is the EXACT same as every single other online provider of this type of shipping.  No one, offers it for less.  

So why all the anger just directed at Ebay?  Why isn't it directed at any and all online providers of FCP?  

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

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

Mon Nov 25 02:47:56 2019

@Marie

You are correct about Ebay charging the same as all online providers.  The difference is that Ebay continues to lie and say they are not making any money on these shipments as they are passing all the discounts on to the Sellers.  As we all know these other sites, especially those that only provide shipping labels have to make money somehow, which is on the amount they keep or are given as an additional discount by USPS.  

The reason everybody is pounding Ebay is that they won't just come out and admit that this is a revenue stream for them and that they do make money on it besides the 10% FVF they charge.  If they would just stop lying and admit that they do make money most of the anger would finally go away, but Ebay is so used to lying about anything and everything they have forgotten how to just tell the truth and be done with it.

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

This user has validated their user name. by: Marie

Mon Nov 25 03:00:35 2019

@Silver Ice King

I have not seen a statement where Ebay has said one way or another.  All I've ever seen is like Ina reporting in the article above.  What I've seen is people continuing to say that Ebay is making a profit off it, not Ebay saying they are.  But that isn't to say that I didn't miss it somewhere.  But I've never seen Ebay say they make a profit off of postage.

With that said, I too believe they are getting paid by carriers to offer their label services.  But I don't take any issue with that.  Ebay has no obligation to provide their services to me or anyone else for free.

I mean heck if this was such a big deal, why not be upset with Stamps.com and other similar sites.  They have got to be making money on online shipping costs because if they don't, how the heck to they stay in business since their business is to sell online postage.  

And now lets think about this on a logical level.  If every single online provider of FCP domestic charges the same rate [which they do], doesn't that tell you anything?  Might that suggest that they are bound by contract to charge these rates!  Because out of all the online providers of USPS FCP domestic, if someone could give even a little discount over what everyone else is charging, they could significantly increase their business.  Surely if they could someone would!

As to the FVF on Ebay.  They aren't the only site that charges that on shipping either.  They weren't the first to do it either.  Don't get me wrong.  I'm not at all fond of the fee at all.  But it is similar to other sites.  But this is a completely different issue that this article was / is about.

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by: hawk This user has validated their user name.

Mon Nov 25 05:09:47 2019

the thing is that anyone that learned real math , can figure out the answer. pretty simple.  

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by: lancecorp This user has validated their user name.

Mon Nov 25 05:46:08 2019

People are referring to Ebay because the issue arose through Ebay chat and that is what this blog is about. Although I agree with you that other sites do it - when the subject is broached - CS never give direct answers and the thought then persists that if they aren't being straight with us about this - what other things are going on we don't know about.

I personally use other services for cheaper rates - but Ebay is still getting fees from me by taking their 10% from my ship cost.

It's all about trust and transparency - be upfront with us on why they do what they do. Quit sugarcoating things telling us it's better for sellers and answer all questions directly - don't beat around the bush.

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by: FeelingFroggy This user has validated their user name.

Mon Nov 25 05:55:52 2019

Three long noses for the idoits at ebay. They have lied so much to everyone now no one believes any of them

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

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

Mon Nov 25 06:14:07 2019

STAMPS.COM

USE IT ! ! !

Perminate Link for eBay Answers Questions about Shipping   eBay Answers Questions about Shipping

by: Chicago48 This user has validated their user name.

Mon Nov 25 07:08:23 2019

I have no problem with Ebay taking a cut for shipping.  There are alternatives to use:  Pirateship, Paypal, Stamps.com, or go to the USPS in person.  I actually thought the fee paid was for using the software.  My EB labels printout on Pitney-bowes software, so I assume that's what I'm paying for.  Also, it's a convenience, rather than going to the USPS, I can print from my home.
Sellers need to find an alternative if they don't like paying Ebay.  This has been argued about for years; where was the seller 10 years ago?

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by: notfunanymore This user has validated their user name.

Mon Nov 25 07:46:41 2019

If anyone doesn’t think they profit from this, I have a bridge to sell you. You are working at “eBays house” they set the rules, you obey or you get thrown out.  Now, onto the future of shipping. The only area Amazon doesn’t have total control of is shipping... not yet, once they have total control, you’ll order on amazon and within a few hours, you’ll have your order on your doorstep, I believe it’s already started with food delivery. Stay tuned, it’ll be here sooner than you think for regular packages. Can’t imagine what eBay sellers will do, or what demands ebay will force you into to compete. (Personally, to compare Amazon to eBay  is like comparing  the New England patriots to a high school football team). Remember, their house, their rules.. good luck with holiday selling...  

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by: Evenger This user has validated their user name.

Mon Nov 25 07:50:21 2019

@toyspast For any heavy and/or large package I add USPS Retail Select as an option in addition to USPS Parcel Select.  You are correct that you cannot print RS labels online, but the inconvenience of writing a label yourself is offest by the tremendous savings to your buyer (and in turn may increase your profit).  I use calculated shipping to take the guess work out of which option will be less money because it also depends on the zone you are shipping.

@Marie  I think the reason we are angry at eBay for keeping any discounts for themselves is that they make money from sellers in many other ways, and other providers, like Stamps.com, are providing the labels as their primary way to make money.  

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This user has validated their user name. by: NoMoreEbay

Mon Nov 25 08:49:58 2019

Nobody knows what ebay does or doesn't make because ebay hasn't spoken a single sentence of plain English in 23 years as evidenced by the latest mod of the day's robotic response. So naturally all anyone can do is make an educated guess or speculation. Given ebay's history, yes, they are making a profit on shipping at the expense of sellers.

Why single out ebay? Because ebay announced they negotiated special rates for sellers and because they are the largest peer to peer auction site in the USA. So large that sellers should be getting special USPS rates.

And yet we are getting the same rates as every other site including small ones and Stamps.com. So where is that 'negotiated' savings going? Right into ebay's dirty pockets.  

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by: pace306 This user has validated their user name.

Mon Nov 25 09:28:10 2019

Theres a few topics here -we can dissect them but they all lead back to the same thing - eBay is full of cr@p.

Now that we've established the base line for the discussion - we can get to the topics.

1) eBay doesnt pass on the "best rates" to its users. You can tell that because the rates they give are similar if not the same as others (as said by a few people here). "The same as /= (does not equal) "the best" - its simple english. I cnat be "better then you " if we are the same.

2) eBays OBVIOUS (except to cheerleaders) conflict of interest. The higher the postal prices, the higher the FVF. eBay chose a middle ground where "it looks like you are getting good rates", but theres still a large cushion of profit left for them.

3) eBay cares not for small sellers - as they have stated MANY times - so why would you pass on "the best negotiated rates" to people you dont like?

4) eBay is not known to be the best business people - they barely know how to operate their own site - can you trust them when they tell you "we negotiated HARD to get you the best rates"? They lie 24/7/365 - and "this " part you believe?

5) Of course they get back end monies - I expect them to - I would like others here - just like abit less lieing about it, please

6) Paypal also makes $ on the label - it was designed when eBay and Paypal were 1 - gotta spread the VIG around, no ?

thats also why they are gung ho on returns - mo money, mo money. mo money

I expect nothing from eBay (some one ... AHEM) said that eBay shouldnt be expected to provide labels (if at all). I dont think anyone expects eBay to do "anything". eBay WANTED to do this - so if "you are going to" - then do it RIGHT - dont use it as a platform to rip people off.

On the original point - eBay only cares about "quick shipping" cause 1) the ape Amazon 24/7, it makes them look like something when they arent, its a way to control sellers

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by: maxmad This user has validated their user name.

Mon Nov 25 10:08:15 2019

Double Dipping on shipping, is as nasty as it gets, and now that this has been exposed, I personally would never use them, but if sellers continue to use ebay shipping, it's their own fault, and they should not be complaining about it, ebay will continue to take as much as you give them, they will continue to find creative ways to take even more they will NEVER STOP

The ABSOLUTELY ONLY WAY to get justice with ANY CORPORATION is letting your money do the talking, you can bring ANY company to it's knees, when the money stops flowing.

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