Why do lots of sellers undercharge shipping?

[Jonas]

I've noticed a horrible trend. Sellers will go and they'll be sending something priority mail with free insurance and tracking, and then they charge $1 or $2 shipping. Basically, things like that. That just makes people who charge actual shipping look like they're overcharging.

Why do lots of sellers undercharge shipping?

[Chris Hanson]

You answered your own question.. It only looks that way because others is overcharging

[Jonas]

No, I didn't. By undercharge I mean they'll send priorty mail which costs $4.60 minimum and they'll charge $1 for it. $1 is less than first class.

[Chris Hanson]

Actually do you care????

[aspkin]

It'll make their item more enticing then others. It's a way to get more sales. And yes most of the time they jack up the price somewhere else.

Seems like you have some competition Jones.

[imjustme]

I found it the other way around. When I charge $10 for shipping and $25 for the item, nobody will buy it. But when I charge $16 for the shipping and $19 for the item, they sell like crazy.

[vers0]

I offer free shipping to entice more bidders to my auctions. I find that some auction will generate more income even with the free shipping. People love the word FREE!!!

[koalawash]

Originally Posted by imjustme

I found it the other way around. When I charge $10 for shipping and $25 for the item, nobody will buy it. But when I charge $16 for the shipping and $19 for the item, they sell like crazy.

Yeah I've found the same thing. You'd be surprised how many buyers are apparently too naive to look at the shipping cost BEFORE they bid.

[Jonas]

Originally Posted by imjustme

I found it the other way around. When I charge $10 for shipping and $25 for the item, nobody will buy it. But when I charge $16 for the shipping and $19 for the item, they sell like crazy.

This used to work before ebay redid their search as "price + shipping".

[prosniper]

I think I've seen studies done where people feel like they are getting more of a value for something when they pay a very small fee, even opposed to free. Maybe that has to do with it.

[Jonas]

On ebay's forums people said they tried free shipping and it almost killed their business.

[aspkin]

That's not a good business then. If your only profit is your shipping cost...

[vers0]

Overcharging is a good way to get the boot from ebay

[LoveEbayNHateEbay]

Originally Posted by vers0

Overcharging is a good way to get the boot from ebay

My competitors do it all the time. And no one seems to balk at it. $.99 to buy with $12.99 shipping and no combined shipping. And the supplier doesn't charge shipping. I saw one just made Power Seller.

[Jonas]

If I have an item that normally should sell for under $5, then I will up shipping and sell at 99 cents starting price. In all other instances, I won't gouge shipping.

[koalawash]

Originally Posted by aspkin

That's not a good business then. If your only profit is your shipping cost...

That's kind of jumping to conclusions, isn't it? It's not necessarily hurting them because they were making a PROFIT from overcharging on shipping before.. it's just that they are losing money outright from giving away a paid service for free.

[Jonas]

eBay overcharges fees so much they aren't losing money.

[koalawash]

LOL.. ebay doesn't have to worry about shipping stuff either