Thursday, March 24, 2011
E-BAY TAPPING INTO SHIPPING/HANDLING
E-bay has found yet another way to stick it to their sellers. They have announced that they are going to include the seller's shipping and handling charges into the final value of the transaction. So...you sell an item for $10 and have $5 s/h, they will be taking their 9% from $15 instead of the $10. A tidy little extra .45. If a seller raises their s/h to compensate (say to $6), E-Bay will then make .54 more on that transaction. E-bay says that they are trying to discourage sellers from charging s/h. They want a free shipping model on their site. However, in the real business world, we know that there is no such thing as free shipping. The seller will just raise the starting price of their item to include the s/h costs. (In my example to $16) And....if the item does sell, E-bay will make the same amount regardless !!! Never mind the fact that E-bay is already getting their 3+% on the final value of a transaction through Paypal (Their virtual monopolistic payment method). So...E-bay will be soon getting 12+ % of the seller's shipping and handling fees. Who is getting screwed here? Everyone but E-bay. Say it costs a seller $ 10.00 to ship a board game. Knowing that E-bay will take $ 1.20 of that $10.00, a seller should compensate by charging $11.37, so that after fees, the seller actually receives $10.00 to cover the shipping. The bidder ends up paying more than the actual shipping to cover the 12% that E-Bay is taking. How is that helping the bidder? Of course it is not. Higher starting bids or higher shipping, that is going to be the end result for the bidder. E-bay gets to pad it's bottom line a little more to appease their shareholders.
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