Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun June 19 2022 19:54:11

How Online Sellers Are Coping with High Gas Prices

By: Ina Steiner

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A majority of online sellers are taking action in the face of soaring gas prices and are doing so numerous ways, with only 11% who took a recent EcommerceBytes poll reporting they had made no changes as a result of higher costs of gas and goods. Three percent of respondents said they had stopped selling online altogether. 

The survey focused on fuel prices and inflation's impact on sellers' product sourcing (how they buy inventory to sell online). The poll went live on June 12th with an announcement on the EcommerceBytes Blog.

Higher Costs Impact Product Sourcing
The poll asked, "What, if any, adjustments have you made to offset the rising price of gasoline and goods?" and asked respondents to check all of the options that applied.

As the graph shows, a significant number of respondents (60%) said they were making fewer trips or refined their routes when sourcing products. 

We also invited sellers to leave comments. Here are some comments about how some sellers said were changing their in-person scouting trips:

"I only travel within 15 miles, it used to be up to 50."

"I have gone to buying more on online auctions. And when I buy from the local online auctions I now schedule all my pick ups on the same day and make a route of it to save on gas. I used to go do my pickup on the day after winning. Now it may be a couple to a few days later after winning."

"Now we only source very close to home it's just not worth long drives. If you have to spend $20-$30 on gas and you only find a few things it's not profitable. Sourcing more online clearance and retail arbitrage near home."

"I do a lot of complaining about gas price. I still love sourcing, selling online and can pay my bills while enjoying a working lifestyle I never believed was possible."

"I have decided to stop buying at my favorite thrift store until I have all my items listed. This will take a while."

Numerous stated that instead of sourcing products in person, they turned to buying inventory online.

One seller said, "Though my primary source is online, I also frequent flea markets, estate sales, garage sales and antiques shops and malls. I have pretty much stopped going to all those venues. Even with the rising cost of shipping, it's still cheaper than paying for gas to go to all these outlets."

Other sellers left comments indicating they were sourcing less and instead were listing more of the inventory they already had on hand - or in some cases, were listing fewer items for sale.

"I tend to stock up heavily when the opportunities present themselves and now, luckily, have nearly an entire stores' worth of merchandise in storage in my basement and garage," explained one seller.

Others said they changed the type of items they sourced, with some indicating they were focused on higher priced goods or on lighter-weight goods (due to shipping costs). "I have stopped sourcing and selling items that would sell for less than $20," said one seller. 

Another seller said, "The rising cost of gasoline hasn't directly affected my inventory sourcing. The rising cost of shipping has - I pass on larger, heavier items now, and focus on smaller things that cost less to ship."

When indicating how they *primarily* sourced inventory, 58% of the sellers who took the poll said they sourced primarily through in-person methods including from yard sales, estate sales, flea markets, and in-person auctions (49%) as well as from retail stores (9%).
*Note that less than half a percent of respondents said they sourced products primarily through storage units.

Nine percent said they sourced through liquidators and online auctions; 7% through wholesales and distributors; 7% through consumer online marketplaces and websites; 5% said they made their own products; and 13% said they primarily sourced through other methods.

Higher Costs Lead to Raising Prices
In answering the question, "What, if any, adjustments have you made to offset the rising price of gasoline and goods?" nearly 40% of sellers said they had raised prices of their own products. Here, the comments were enlightening. 

"We are in an inflationary environment. We have raised prices with little push back as customers understand this is just a fact of life," said one seller.

Another seller wrote, "Real sellers raise prices accordingly to keep up with inflation. Race to the bottom sellers will fail."

While another said, "The high cost of LTL will hurt small and medium sized business but buyers are expecting the cost increase so as long as it's not too shocking to the buyers, everything should be fine."

One seller said their feedback and new products gave buyers confidence in shopping from their online stores, "but that feeling comes at a cost. It's my brand, and I charge for it. As long as buyers are desperate and lazy and comfortable with not shopping around, or stuck with using one venue due to familiarity with it and its Money Back Guarantee and/or A-Z Claims, I will continue to exploit those characteristics for my gain. I will continue to buy for cheap and inflate the prices as exorbitantly as buyers and their characteristics will allow."

But many others were not faring as well. "Given lower sell rates on eBay, higher cost to source materials, we are selling off inventory and will most likely close eBay account at the end of the year," wrote one seller.

"Between the gas prices so high and government wanting to tax more and everyone else raising fees and shipping, I'm reevaluating selling online and doing more local selling like Facebook," wrote another.

Other Ways Sellers Are Coping with Higher Costs
As can be seen in the first chart above, in addition to the 60% who said they were making fewer trips or refining their routes when sourcing products and the 39% who raised prices of their items, 31% raised shipping / handling; 29% made fewer trips to ship orders; 11% made no changes; 3% stopped selling online; and 17% selected "other."

One seller succinctly said how they were coping with higher gas prices when sourcing inventory: "electric car." A couple of sellers indicated they had taken to riding their bicycles, with one taking their electric bike to view auction products and another riding their bike to local garage sales and thrift stores.

Some said they combined trips in their automotive vehicles. "It's also important to be able to write off my mileage at every opportunity, so if I have to go someplace for an errand, I will also go to a thrift store in that town so that I can write off the mileage for that trip," said one respondent. 

"My shipping increases are more a result of USPS increases and not gas," said one seller, while others said they relied on USPS package pick-up to avoid taking trips to ship their items.

Many sellers are adapting to higher costs in various ways, though not everyone sees their way forward. Let us know what's working for you.



Comments (18) | Leave Comment | Permalink

Readers Comments

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

Mon Jun 20 01:23:51 2022

I don't see this ending well.
At All.

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by: postbuster This user has validated their user name.

Mon Jun 20 07:08:54 2022

So how exactly do the big online venues justify their fee hikes?

None of these expenses fall on them.  They don't source products, nor do they ship the items.  They have also cut back on services from their own CS and website ''features''.  

They are just a website who gouged sellers before any inflation occurred, now they are jumping on that band wagon using other corporations excuses to take more money that is not theirs.

We are all taking a hit in this economy, and the venues decide to hit us Again.

There are far too many executives and shareholders in this country, and they are ruining our industries intentionally to steal more money.  When that isn't enough, Other like minded parasites just invade other countries.
Destroying Lives, Families, Their Homes, and Industrial Warehouses that satisfy customer wants and needs.  

Parasites just want to control and enslave the world, and corporate is the birthplace where all of this mindset starts.
Abuse will breed more abuse.

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by: Stone Cutter This user has validated their user name.

Mon Jun 20 10:00:49 2022

“So how exactly do the big online venues justify their fee hikes?”

One answer: Wage inflation. The U.S. has a serious labor shortage and are paying higher wages to attract talent, especially in tech, where wages are high in the first place. And when a business takes out a bank loan, the recent increases in interest rates now costs them more to do business. Corporate greed is not the only issue here. It is now costing business more dollars to operate.

I do not believe that the majority of Americans are struggling due to increased gas prices. Latest economic data shows that the average consumer has low debt and increased savings which is the reason for the inflation in the first place as there is too much consumption and not enough products.  

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

Mon Jun 20 10:02:04 2022

And their Pool Boy gets a raise.....

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by: Stone Cutter This user has validated their user name.

Mon Jun 20 10:17:17 2022

***Working from home, a huge advantage***

Since Covid, a huge chunk of the U.S. population now works from home. And with that come less travel and less consumption of gas. Most of online sellers create their products, rather than sellers who  run around town to find products to resell.

Those like myself are at a huge advantage. As a jeweler, 95% of my sourcing, I purchase online. All my metals, stones, packaging, I purchase online.

Those who create and work from home are at a huge advantage when it comes to gas prices as there is very little gas consumption in the first place.  

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by: Stone Cutter This user has validated their user name.

Mon Jun 20 10:25:55 2022

“And their Pool Boy gets a raise.....”
Yes, and so does the employee at Sees Candies. I was at Sees Candies over the weekend and there was a sign on the counter looking for help. The sign was for Sees Candies managers with a starting pay of $25.50/ hourly which is over 50k yearly.

The reality...Online Sellers who struggle with their online businesses will eventually jump back into the labor market for higher wages.  

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by: I_Fix_Dolls This user has validated their user name.

Mon Jun 20 11:05:14 2022

I am old, on Social Security, and sell online. I sell niche items, but also whatever I can get cheap (or free). I have been traveling less and not as far to buy things to sell, but on the other hand I have had forty years to collect stuff. I also have talents to make things, so even if I didn't shop (I enjoy shopping) I could still be listing things. Went two places this month and bought 100 items to sell. Went one other place and got free items to sell. (Have already sold some) I do not limit myself to one venue to sell. Go where people are buying. Don't price yourself out of business. Several small sales are more work, but it is still money, and no boss who says you can't take time off.

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by: Stone Cutter This user has validated their user name.

Mon Jun 20 12:00:03 2022

*** Stay at Home Moms ***
*** Retired Individuals ***

I recently read an article on how a large percentage of online sellers are "Stay at Home Moms", who are looking for a little extra cash while being stuck at home with kids. As an artisan jeweler on Etsy, I would say that only 10% of jewelers make a true living by selling online, while there are those like me, who enjoy what we do while bringing in additional cash per month. Many like me are retired from Corporate life and are looking for other things to do.

An increase in gas prices are not a 'game changer' for those who HAVE to be at home, or for those who WANT to be at home.  

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by: LDWCallsOut This user has validated their user name.

Mon Jun 20 12:08:17 2022

Stone Cutter, I don't think most online sellers create their products.  Even on Etsy the majority of items listed as Handmade were not designed and/or crafted by anyone connected with the shop other than as a wholesale source.  The majority of eBay and Amazon sellers don't create the items they sell.  

Most of the items for sale online, regardless of the venue or the size of the business represented by the seller were mass made in Asian factories.  As the supply chain loosens up a little, wholesale prices will drop.  Etsy right now is flooded with reseller products priced lower than they have been since before the pandemic, and many shops selling this stuff directly from Asia offer free shipping, too.  

If an online seller is buying their wares directly from a Chinese manufacturer, there are no increasing wages for the candy shop manager or pool boy to factor in.  There might be some increases for their shipping costs if they don't use drop shipping from China, but otherwise very little -- if anything -- has changed.  Drop shipping costs from China seem not to have increased by much.  A counterfeit designer bag, for example, costs under $4 to ship from China, but anywhere from $10 to $50 to ship from the US, the UK, or the EU.

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by: fusgeyer This user has validated their user name.

Mon Jun 20 12:51:49 2022

We print pdf files, artwork, posters, drawings and plan for individuals and businesses. The increased cost of paper, and supply chain issues with ink is a real problem. We now are 3-4 deep with primary and backup vendors for our supplies. Shipping for us became very easy when the US Postal Service decided to go with the $15 surcharge on packages 36" and longer. It made their service 3x more expensive than their competitors. So, all tubes, cubes, and packages over 13 oz go via UPS. Even with the added charge for daily pickup, they are still significantly less expensive to use than USPS.

I do not source products locally for ink and paper. There are no local sources available for large paper rolls, bulk shipping supplies and ink for large format production printers. If there was a local source, I would use it even if it cost a little more because it supports the community. But I'm in rural Arkansas, nothing is local to me.

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by: terry55 This user has validated their user name.

Mon Jun 20 17:04:16 2022

My biggest fear is the USPS will use this as another excuse to make an outrageous rate increase. I've had to cut back on yard sales and the 2 hr trip to the closes flea market but I've been smart and made contacts over the years, instead of running all over, I have people call me to buy stuff.  

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by: Geetar This user has validated their user name.

Mon Jun 20 18:59:06 2022

Bottom line....sell more to make up the difference.  Until the time put in is over what a normal 9-5 would pay.

There's a reason why there is a labor shortage. They don't pay enough. Nobody is going to work a job where they work hard long hours, and then still worry if they will have enough to pay the elec bill at the end of the month. And that will just get worse. People wonder why the millennials are living in mom and dads basement? I dont want to hear well they pay 15 or 20 an hour. What does that buy? A home, clothing,  food, car, health ins, and savings for retirement? No where near. We have MAJOR problems in this country, and it is only getting worse. Selling online I dont make a ton of money. Just enough to live on. But I am damn well not going to work for someone else, especially some big corporation, for a check that wont even pay half my bills.

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by: BatmanOfOz This user has validated their user name.

Tue Jun 21 04:08:55 2022

I'm one of the 3%...I Stopped selling on ebay.  I don't really 'need' the money I was getting, but it was nice to get a little something extra, though now it isn't worth the Effort, Time and Expense.
It Used to be Fun, sharing Stuff from my years in The Biz with The World!  Now, with too many Taxes, Fees, Dishonest Buyers and Restrictions, there is no Joy.
I still have a lot of Stuff!  Hopefully, things will Change one day...and I'll still be here to step back into it!

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by: Stone Cutter This user has validated their user name.

Tue Jun 21 11:06:48 2022

*** Made “from” Home ***

@LDWCallsout
I guess we need to define handmade. Buyers no longer expect an individual to sew a garnet by hand or construct a bed with a handsaw.

Anymore, handmade can be DESIGNING a product while production in done elsewhere. There are a whole bunch of businesses on Etsy that are doing just that. Especially in clothing products...businesses are run by individuals who design their products to have sewn overseas. This is now the definition of “handmade”. And all this can be done without running around town and using a bunch of gas, which is a much better business model for a truly successful business.

There are companies on Etsy that have quickly made over $1,000,000 in revenue while designing their products to be produced elsewhere.  

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by: Stone Cutter This user has validated their user name.

Tue Jun 21 11:25:54 2022

“I dont want to hear well they pay 15 or 20 an hour. What does that buy?”

I live on the expensive West Coast. Two people making 20/hour ...or 80k yearly, can definitely afford to rent a piece of property. Unskilled labor was NEVER been a way to financial success. Unskilled labor cannot compete with Professional wages.

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by: Stone Cutter This user has validated their user name.

Tue Jun 21 11:44:03 2022

“There's a reason why there is a labor shortage. They don't pay enough.”

The airline industry has a shortage of airline pilots. Many were let go during the pandemic so now it will take months to retrain. Pilots make good money, so I don’t think wages are the reason here.

U.S. economists say, that during Covid, a whole bunch of older adults quit their jobs leaving a massive amount of job openings. They quit their jobs, not because of their wages, but because they didn’t want to get sick and die of Covid.

People will always need money no matter the wages. I know people who got back into the labor market for the healthcare benefits that are paid by the employer; saving them thousands per year on healthcare costs.  

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by: Stone Cutter This user has validated their user name.

Tue Jun 21 13:14:38 2022

*** Vehicle Expenses ***

And for those who spend time driving around town to source products, there is another hidden cost besides gas...there is also the cost of maintaining a vehicle. The more Sellers drive to find products, the more it will cost the Seller in the long run. Oil changes, wear on tires, tune-ups, and the general aging of vehicles can be huge costs to many Sellers who have to drive around town for their business.

My household works from home and we fill our gas tanks once per month. And with that, our vehicles have low mileage and are in great shape....I have a 2002 Nissan with 125k miles and is still in great shape. I've figured that my household has saved $60K+ by not having to purchase 2 new vehicles.  Any business that requires a use of a vehicle will greatly feel that cost, in the long run.  

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by: terry55 This user has validated their user name.

Wed Jun 22 09:16:19 2022

Stone Cutter
I hear ya, I live in MO, our cost of living is/was cheap, now raising wages to $15-$20 an hour, everything is going up. I've lived east-west coasts and HI, people around here didn't know how good they had it. When the Gov. ever gets a handle on inflation, prices on goods won't go down here. I've never worked a job and stayed at bottom, work my way up to better pay or just went and found a better paying job. Even when I became disabled, I didn't quit, started a business on ebay and make more then I did at a 9-5
As far as gas, I claim mileage on my taxes so driving around buying inventory is covered, well, almost with gas doubling in the last year. But Uncle Sam is raising it a whole 4 cents July 1st. I bought a new jeep in 2016, just rolled 26K miles on it because I work at home. I've actually had to send in pictures of the odometer because my insurance company couldn't believe it lol  



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