Online Sellers to Pass Surge Postal Pricing on to Holiday Buyers

An informal survey shows small online sellers believe holiday shoppers will bear the brunt of USPS surge pricing, though even those who pass along the higher rates will still see higher costs.

A majority of EcommerceBytes readers (73%) said they would be impacted by the USPS holiday rate increase that goes into effect on October 18 and runs through December 27, 2020. (14% said they didn't know if they would be impacted.)

The survey asked respondents, "If you experience higher shipping costs over the holiday-shopping period, who will absorb the extra costs?" - the results are as follows:

I will pay the extra cost: 33%

Buyers will pay the extra cost: 63%

Does not apply: 4%

One seller said, "My "free shipping" will cost me more money," while another explained, "Etsy and eBay charge for shipping and handling based on weight and dimensions that I include in the listing information. So if the premium charges for the post office and FedEx it will be charged to the buyer."

Sellers who pass along the costs to buyers remain concerned about the impact: "The buyer pays shipping. Higher rates may discourage them from making an online purchase," wrote one respondent.

Some sellers expressed concern that the USPS will keep the increase in place in January 2021 - "they won't drop rates back to where they are today," one respondent wrote.

A seller who said they were concerned about changes at USPS said, "This increase is aimed at Amazon. The rest of us are collateral damage."

Some pointed out that an increase in shipping costs would also result in higher payment processing costs and marketplace commissions. "It's not just the postal increase but when you consider the fact that is compounded by the fees from credit card processors as well as selling sites are taking THEIR fees on the total amount of sales, you are also getting hit again."

While 100% of readers responding to the survey said they used USPS, some respondents said they used additional carriers as well; 18% used FedEx, 8% used UPS, and 3% used "other," including Estes Freight, AIT Worldwide.

41% of respondents said they typically had 250 or fewer listings running, another 41% typically ran between 251 - 1,000 listings, and 11% said they typically had between 1,001 - 5,000 listings running; the remaining had over 5,000 listings.

Some additional comments left by sellers follow below:

I moved most of my shipping business to Fedex and UPS already. USPS has priced themselves out of the market for a lot of my packages. They also sneakily changed the zoning associated to some places in the country (like Northern California from the central US) resulting in higher prices. I'm going to select the cheapest rate to ship, and if that means I never use USPS, so be it.

I'm not going to go through and raise each price and then change it back a couple of months later. My shipping is already high because I sell dishes and it would discourage buyers.

I will split the cost. With items at the lower end of cost factor and with all sites taking their fees, I can't absorb ALL the cost myself. I'm a retired limited income household. Seems everyone is making money except for us small sellers.

The USPS should NOT have decided to increase costs to consumers at this time. A lot of people are having trouble making ends meet because of the Covid virus. The holidays are going to be very bleak for many.

We have a huge repeat customer base as well as a reputation of fair postage prices and very quick and dependable service. Our expectations is that this will continue to be a very busy holiday season. 

I may go out of business.

I have concerns about USPS shipments this year due to issues they are having.

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