A few weeks back I made a post on selling on ebay & shipping internationally. Shipping domestically is much easier (and cheaper), and it seems sellers are much less likely to be scammed. In this post, I’m going to cover domestic shipping options, shipping-related seller shipping ratings, and how to avoid scams & loss.
Selling on ebay is easy, and there’s tons of guides to help you with that. It’s not hard even without a guide or a book. Likewise, shipping is cake. The question isn’t how to sell or ship, but how to avoid scams and reduce loss from damaged or lost items, and how to get the best ratings you can.
You might be thinking, what does this have to do with PaleoSnow? Well, eBay is one way that I’m making enough money to pay to live the snowboard bum lifestyle. It’s something I know and thought would be useful to share – stuff I wish I had known when I started selling.
Avoiding Scams
The most common buyer scams (from what I’ve seen surfing forums) are buyers that claim the item was never delivered, and buyers that dispute charges. A bit more rare are buyers that claim goods were damaged or not as described, or try to return goods that aren’t what you mailed.
The first two scams (i.e. the most common) generally fall under Seller Protection. If you have proof that the item was delivered, then buyers can’t run these scams. Also, only ship to confirmed addresses. Sometimes, an evil-doer will obtain someone’s paypal and ebay passwords, then use those to buy something and have it shipped to their house. Unless the address is confirmed, you’re going to be stuck; PayPal won’t help you. Yes, this sucks. But that’s life – someone is going to lose the money, and PayPal isn’t willing to foot the bill unless you take precautions to prevent such scams.
That means:
- only ship to confirmed addresses
- always ship with delivery confirmation
- for expensive items (over $200 or $300), ship with signature confirmation and insurance
If someone’s PayPal account has been hacked, buyers might purchase an item and then send you an email saying “we moved, can you ship to this new address?” Your answer is no. Not just NO but HELL NO. You are completely unprotected if you ship to a different address. If you manually address your envelopes, make sure you check the PayPal transaction first. If you print out postage online, you’ll go through PayPal and it will tell you what the confirmed address is. eBay and PayPal are owned by the same company so theoretically the information should be consistent, but I’ve found sometimes it’s not, and communication between the two sites can be spotty. So just spend the extra 30 seconds, log into PayPal, and look for the words “OK to Ship”, “Covered under Seller Protection”, and “Confirmed Address.”
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Adding delivery confirmation to first-class USPS packages is only 80c, and cheaper (or free) with the express services. This gives you tracking for domestic USPS packages and confirmation that the item was delivered. If the buyer wants to claim the item was never delivered, you’re protected – delivery confirmation means that it’s the buyer’s problem at that point! Note that having delivery confirmation does not mean that your item won’t get lost or damaged. To handle that problem, you need insurance. Delivery confirmation just means that buyers can’t claim it wasn’t delivered when it actually was!
Insurance, by the way, is something that protects the seller when things go wrong. According to eBay policy, you can’t charge buyers for insurance. Insurance protects you in case the item was lost or damaged during shipping. Think of it from the buyer’s point of view: you buy something, the seller says he shipped it, but it never shows up. Is that the buyer’s fault or the seller’s? According to eBay policy, it’s the seller. Until the item arrives in the buyer’s hands, it’s the seller’s responsibility.
What you can do is pass that charge along, usually by padding the shipping & handling fee or by increasing the cost of your item. Be careful though – if your shipping fees are too high, buyers might ding you for it (see Seller Ratings, below).
So the process is fairly simple. Before you ship an item, make sure that the PayPal transaction says the buyer’s address is confirmed, only ship to that address (not to some other address that the buyer asks you to send to), and ship with delivery confirmation.
Seller Ratings
Sellers are rated not just with the normal positive/negative feedback mechanism, but also through detailed seller ratings. There are four such ratings: accuracy of the item description, communication, shipping costs, and shipping time. I won’t describe the first two here, just the last two related to shipping.
According to eBay policy, the delay taken by the delivery service should not reflect on the seller. If you inform your buyers up front of the service you’re using, buyers should understand the delay. It doesn’t hurt to remind buyers – something I generally only do when I expect the package to take a long time to arrive. If you’re shipping a bulky or heavy item cheaply, that generally means a slow delivery method. That’s the time to tell your buyers in the item description itself about the slow delivery.
I generally ship via USPS first class. This is cheap, and when shipping domestically, shipping time tends to be on the order of days. If I get items to the PO quickly, buyers often receive their item three days after they buy it, sometimes four days. That’s generally not long enough for them to start getting antsy about whether you really shipped the item, if it got lost, if they got scammed, etc. But if you’re shipping parcel post or some other slow ground-delivery method, be upfront with your buyer. Manage their expectations ahead of time. Every time I ship an international item (which tends to be very slow due to customs), I send a personal note to help manage buyer expectations. If you ship a few items the slow way, personal messages might be the way to go. But if most of the items you sell will go out through parcel post or the like, then you should include a shipping-time disclaimer in your listing description.
Back to the seller ratings.
The only thing time-wise under your control is how long you take to get the item to the delivery company (e.g. USPS, FedEx, etc). That’s what the “shipping time” option is. Managing expectations help. If you can get items shipped quickly, then mentioning that in the item description will help frame the buyer’s expectation of the transaction. Once a buyer pays for an item, communicating with them and/or marking the item as shipped will tell them you’re on the job. When I ship with tracking, I add that tracking number to both eBay and PayPal right away – generally this generates an email to the buyer that says something like “your item has shipped.” Even if you just drop the item off in a mailbox, marking the item as shipped that day can impress the buyer. If you buy postage online and print out the shipping label, that can also help tell the buyer that you’re on the ball.
Buyers will know if you mark an item shipped but then wait three days to actually ship it. Making a habit of that might come back to bite you, and that will mean bad ratings, which will eat into your profits.
Which is the point here: having good ratings (and a minimum sales level) will earn you a discount through eBay. Since you’ve got to pay up to 12% to eBay in seller fees, plus the listing fee, plus the PayPal transaction fee, discounts can make a big difference in your bottom line. The biggest chunk of those fees is the Final Value Fee, and maintaining a high seller rating ears you a discount on that.
The second shipping-related detailed seller rating (DSR) is shipping cost. If you offer free shipping, buyers have no choice but to give you five stars. Since you need to maintain a 4.6 rating (out of 5) to maintain top seller status, a few 3s can seriously risk losing that status. In other words, you can’t get away with exorbitant shipping costs. It might be worth it to you, depending on how much you sell, to give up top seller status, or to not pursue it. I used to throw in a couple extra bucks for shipping on my items, because that’s how much it cost and because shipping costs aren’t included in the final value fee. But the amount I was saving was tiny compared to the discount, so I offer free shipping on most of the items I ship.
If the items you sell are expensive to ship, especially if that’s high relative to their sale price, then you’re kinda stuck here. The best thing to do is to be up-front with your buyers about the shipping costs, mentioning it in the item description.
Domestic Shipping Options
My favorite way to ship is through the US Postal Service. Counter service tends to be slow, but usually friendly and helpful. The main reason I choose them is because they’re cheap. If you print out postage at home, then you don’t even need to bother with the counter and you can just drop off the package in your mailbox. USPS offers slow service for packages (Parcel Post), fairly quick First Class service, Priority shipping, and Express shipping (typically overnight). There’s not much difference between Priority and First Class. Yes, Priority should be faster, but unless you’re shipping from New England to the Pacific Coast, most of the time it takes a package to get from seller to buyer is the first and last day – getting the package into the mail, and that last day of delivery. I almost exclusively use First Class – it’s cheap, fairly quick, and if I get items mailed quickly, it’s often just 3-4 days from sale to receipt.
Large, bulky items are a bit trickier to send. USPS Parcel Post can be very slow, while sending heavy boxes through FedEx and UPS can be very expensive. Feel free to look around, but I’ve found that FedEx and UPS are just too grossly expensive for what I’ve shipped. Buyers spend a week waiting for your auction to end – waiting another couple days for the package to arrive is usually worth saving the extra shipping time.
But that depends on the cost of the item. If you’re only selling a few, expensive items, fast & expensive shipping might make sense.
Generally, the best thing to do is to offer more than one shipping service. Pick the cheapest rate you can find, then find a faster service and offer that as an option.
Summary
A big part of making a profit on eBay is not spending too much for “friction” – buyer & seller fees, PayPal payment-processing transaction charges, and shipping. Finding a cheap shipping option is critical, especially when you decide to offer “Free Shipping” to attract buyers. Also, cheaper shipping means buyers can spend more on the item itself. Those Pak-n-Ship places can be convenient, but beware of what you might be paying to use them. Your best option is to go straight to the shipper – a UPS or FedEx store, or a post office itself. Print your own postage when you can and you can save even more.
Avoiding scams also protects you from losing out on a transaction. If you’re only making 10-15% profit on an item, losing the entire item to a scam can be crippling. Protect yourself with delivery confirmation and using confirmed addresses, and buying insurance for expensive items.