The Hidden Costs of Shipping Products
Remember the early days of eBay selling, when saving money was of prime importance? People were dumpster diving for memorabilia to sell--still not a bad idea--picking up packing peanuts once a week from the local beauty supply store and foraging for boxes behind any store possible. Those were the days. I even remember creative eBay sellers purchasing mint stamp collections on the site at a discount and using the stamps for their eBay packages.
Today, online buyers expect--and thereby your sales require--a far more professional approach. And competition in the market has forced sellers to spend a larger percentage of their profits on shipping expenses. And shipping costs can add up quickly. So how can you keep them down?
Starting with the basics, carefully plan your purchases of packing tape, bubble wrap, boxes and envelopes. Some of the best deals on these items can be found on eBay. It's best to choose a seller in your area to keep shipping costs to a minimum. You can find one using the search options on the side of the search results. Here's what you should get:
- Packing tape: If purchased in quantity, you can get 110-foot rolls for less than $1 each.
- Bubble mailers: These handy envelopes, lined with bubble wrap, come in many different sizes. Decide which sizes are best for your products, and buy in bulk--they don't go bad, even if you have them for a couple of years.
- Labels or plain paper? Many eBay sellers print their postage online using plain paper and an inkjet printer. But I've found that using a standard thermal printer and 4-by-6-inch self-adhesive labels saves time and money. I've been using a Zebra 2844 printer for years. All I do is insert new labels, and print away. It's compatible with most postage services as well as PayPal. I buy my labels in bulk from a seller on eBay, so I save there, too.
- Boxes: Search your local Yellow Pages to find a box company in your area. Try to pick the boxes up yourself and consider splitting an order with another eBay seller. Decide ahead of time what sizes best suit your items.
The U.S. Postal Service still offers more than 12 different box sizes as well as several envelope sizes for Priority Mail--for free. Consider the cost of these boxes when deciding which carrier you choose for your shipping. If each box has a retail value of 50 cents, calculate that as a savings on your shipping bottom line.
Taking a longer-range view of your shipping costs, review your shipping options at least annually. FedEx Ground and UPS generally have an annual rate increase--and often add in a fuel surcharge as a hidden price increase that's not quoted as part of their rates. And the U.S. Postal Service will be increasing its rates mid-summer this year.
Another area you need to pay attention to is package insurance. Many sellers don't use package insurance and feel their job ends when they ship the package. This simply isn't true. The FTC requires that a package be delivered 30 days after payment is made, or the seller must refund the buyer's money or request an extension on delivery. It's the seller's responsibility to get the package to the buyer--period. Without insurance, when a claim needs to be made on a lost or broken item, dealing with the major carriers can be a real pain.
I've been using private parcel insurance since I started selling on eBay as a business. Not only do I save up to 80 percent on what the major carriers charge to insure my items, but I also get a speedy resolution when a problem occurs. I happen to use U-PIC. There's no charge to apply for a policy, and you only have to pay when you insure a package.
Try some of these money-saving techniques, and see if your bottom line doesn't creep up a bit.
Marsha Collier, a successful eBay PowerSeller, is Entrepreneur.com's "eBay" columnist as well as the author of the bestselling eBay references,eBay for Dummies andStarting an eBay Business for Dummies.