Postage prices on eBay play an incredibly important role in the sales process; it can be the difference between a fully-fledged sale and an auction finishing with zero bids. An auction with free postage is easily a lot more attractive than one with £4.50 P&P but, of course, sellers may not make as much money with the former. It’s a delicate balance that sellers have to juggle with; growing profits but maintaining sales.
Furthermore, eBay has recently taken steps to extend the postage fees it charges to private sellers; a move designed to encourage sellers to offer free or competitive postage. Previously, sellers were expected to pay a Final Value Fee (FVE) based on the price an items sells for in auction, not on postage. However, the new rules mean eBay will also take a typical ten per cent in what you charge for postage.
For example, let’s suggest an item sells for £40 with £4.50 added for postage. This would rack up 10 per cent in FVE (£4) but the new rules mean sellers have to pay an extra 45p as per the ‘tax’ on postage.
As a result, you need to find more ways than ever to increase your eBay profits.
Incorporate Postage in Product Price
It’s a tried and tested way to improve profits for an ecommerce store and it can work just as effectively on eBay: sellers should incorporate postage costs into product price. Offering cheaper postage encourages buyers to bid as free postage is always an attractive trait; customers see a product price and they know that’s how much they are going to pay. It also ensures that your product is ranked higher in eBay searches, see our post eBay Fast ‘N’ Free Postage and Packaging Tips for more details.
If customers are on the fence about paying £17 for an item then an additional £5 for postage is going to put them off entirely. However, £20 cost price with free postage is a nice round number that could convince buyers.
Another way sellers could increase their profits is by switching couriers. Most UK sellers, for example, instinctively use Royal Mail as our courier of choice but price-conscious sellers may do better by looking elsewhere.
Moving from expensive to cheaper couriers has obvious financial ramifications and will ultimately increase profits. Those worried about a drop in quality shouldn’t be; many smaller couriers offer the same services as some of the big boys, from next day signed delivery to delivery before 9am. You might also find some couriers will collect all your eBay products at your front door step ready to deliver to the buyer, saving you the hassle of travelling to the Post Office.
Overall, lowering your postage costs – especially in the wake of eBay’s new postage policy – does not mean sellers have to forego profits to abide by eBay’s whim. There’s a handful of ways sellers can retain their profits without sacrificing their sales. Hopefully this guide has helped shed some light on eBay’s new policy and the ways sellers can work around it; after all, profits are the most important thing to think about when selling on eBay!
Author Bio: Ashley Curtis
Written by Ashley Curtis on behalf of I Post Parcels. Ashley is a keen online seller who writes about eBay changes and updates.