How To Price Shipping and Handling for Your Item Listings

In: shipping

2 Apr 2009

Let’s think back to the start of the auction process. You probably remember that I recommended you include your shipping and handling charges up front so that bidders know what to expect.

But how do you figure shipping costs before you know where the item is going?

Working with Flat Fees

The solution is easy if you’re shipping something that weighs (packaging included) less than a pound. For these lightweight items, you can use USPS Priority Mail, which ships one-pound packages anywhere in the U.S. for a single price ($3.85 at the time of writing). Because you can also use free boxes (provided by the postal service), you know that your cost to package and ship a one-pound item will be $3.85. Easy.

When you’re shipping light items, such as a single CD, check with your post office for the best rate. Sometimes First Class can be cheaper than Media Mail!

If you’re shipping books, CDs, or videos, you also have it easyif you choose to ship via USPS Media Mail. These rates are so cheap that you can do some creative rounding of numbers and say that any item weighing two pounds or less can ship anywhere in the U.S. for $2.00. The actual Media Mail rate might be $1.42 or $1.84 or whatever, but $2.00 makes a convenient number to state up front; the gap between actual and projected shipping can go toward the purchase of an appropriate box or envelope.

Working with Variable Fees

When you’re shipping items that weigh more than a pound, the calculation gets much more complex. The fact is that if you’re selling an item that weighs, let’s say, four pounds, the actual shipping costs (via Priority Mail) can range from $5.30 to $10.35, depending on where you are and where the buyer is. That’s because Priority Mail ratesmost shipping rates, actuallyvary by distance. So there’s no way to quote an exact shipping cost until the auction is over and you get the buyer’s ZIP Code.

That said, there are three ways you can deal with this situation in your auction listings.

First, you can calculate an average shipping cost for your item, figuring a cost halfway between the minimum and the maximum possible costs. Using our four-pound example, the minimum cost for Priority Mail shipping is $5.30 and the maximum is $10.35, so you would charge the buyer the average of these two numbers, or $7.83. (Or maybe you would round up to $8.00.) The theory here is that you lose money on some shipments and make it back on others, so over the long term it’s a wash. Of course, nearby buyers might complain that they’re paying too much (which they are, because they’re in fact subsidizing sellers who live farther away). You’ll have to decide whether you can live with the occasional complaintor refund the difference if it’s too large.

Next, you can simply state that buyers will pay actual shipping cost based on location, which will be calculated at the conclusion of the auction, and not include a flat shipping and handling charge in your listing. If you take this approach, you have to request the buyer’s ZIP Code at the end of the auction, refer to various rate charts to figure the shipping cost, and then relay that cost to your buyer. It’s a bit of work, but it gets the job done. (It’s also made easier by the fact that eBay is now including the buyer’s ZIP Codewhen availablein its end-of-auction notification emails.)

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