EcommerceBytes-Update, Number 288 - June 12, 2011 - ISSN 1528-6703     2 of 7

Get Ready for New eBay Fees on Shipping

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eBay told sellers it would begin charging fees on Shipping & Handling charges starting July 6th - currently the Final Value Fee applies only to the selling price. But what happens beginning in July if customers overpay for shipping when ordering multiple items in one transaction? Will eBay refund FVFs for S&H overcharges for sellers who refund their customers?

eBay spokesperson Johnna Hoff said eBay doesn't currently issue credits on partial FVF refunds but is looking into a long term solution.

It's clearly better to avoid such problems in the first place. If you're one of the many sellers who offer S&H discounts when customers buy multiple items in one transaction, setting up shipping rules when possible can help.

There are a number of ways you can set up rules for offering shipping discounts, so eBay lets you create profiles to manage shipping discounts. eBay explains, "For example, you can create one flat shipping rule named "Light items" and specify that each additional item will cost $1.00 to ship. You can also create a flat shipping rule called "Heavy items" and specify that each additional item will cost $3.00 to ship."

Creating flat shipping rules
Flat shipping rules let you charge for shipping the item with the highest shipping cost and then add an additional lower cost for each additional item purchased from you. You can also subtract shipping costs for each additional item purchased, or offer free shipping on additional items.

Creating calculated shipping rules
Calculated shipping rules apply to all listings for which you specify calculated shipping and combined shipping discounts.

Creating promotional shipping rules
Promotional shipping rules apply to all listings that have combined shipping discounts (for both flat and calculated shipping costs) and let you offer buyers special discounts if they buy multiple items or spend a certain amount. For example, you can create a rule that gives buyers free shipping as long as they spend at least $25 and buy 2 items. You can also charge a maximum shipping amount for a single order. For example, you can specify that a buyer be charged no more than $5.00 for shipping if the buyer purchases more than one item from you.

Consider Bundling Products into One Listing
Ecommerce consultant Lisa Suttora agrees that using shipping rules wherever possible is a good practice. She also advises her clients to consider bundling products together and combining them into one listing.

"If you notice that your customers routinely buy multiples of certain items, or items in specific configuration - put together product bundles with those specific configurations, so your customers can purchase them as a set. This is also a good strategy that allows you to create an exclusive product bundle," Suttora says.

However, she warns that sellers of antiques, collectibles and OOAK (one-of-a-kind) items may not be able to set up shipping rules. In that case, she says, there are only three options - "raise prices overall to offset the additional fees paid on shipping combined outside the rules. Eat the loss on the FVFs. Or rethink your model and make changes to your product line going forward."

Suttora said she wholeheartedly disagrees with eBay for charging fees on shipping services, and said 97% of her clients will be affected negatively by the new FVF fees. "Combined shipping notwithstanding, I'm also advising all my clients to take a tough love stance on their product line and focus on expanding more on their "proven products" (the top 20% that sell regularly and are profitable) and clearing out the inventory that is not selling. You can't keep relisting inventory that doesn't sell for a long period of time and remain profitable!"

She said it would take about 90 days after the new fees take effect next month for sellers to be able to assess the impact of the fee changes on their business. It is really important that sellers take a hard look at their bottom line each month. "To remain profitable, it's critical to keep a close eye on your numbers after these changes occur," she said.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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