Quote:
Originally Posted by pod
(Post 159961)
If I had to guess: With the volume they sell any chargebacks are just factored in. The extra sales they get for just letting the system do what it does is offset a few percent so in the long run, just the cost of doing business. Cheesy BS chargebacks are a pain and they suck. But its not like its at 20% or something so painful it can not be handled. [Yet]
I mean if the chargeback situation was so high it was crippling big sellers eBay would make buyers jump through more hoops just to buy. Again, it sucks when it happens, but its not the norm. |
Exactly. They have made a business decision that too many sales would be lost if they would only ship to a confirmed address.
The difference between them and you is that they are working on VOLUME. So a refund here and there is just a cost of doing business to them. To a small seller, one loss can be HUGE!
I would not recommend skimping on the shipping insurance or the signature confirmation on anything over $250. If you do, and the buyer files a claim with eBay/PayPal saying item not received or item is damaged, then you will lose out. They almost ALWAYS side with the buyer.
Here is what I see from a business perspective:
Small Seller: Sells $250 item to buyer that cost them $175. So, you have a $75 gross profit. Let's say shipping with insurance and signature confirmation costs $10. So now your profit is only $65. Not using the signature confirmation and insurance saves you $5, so your profit is now $70.
However, if the buyer returns the item, or it goes missing, then you are out $175 for the cost of the item plus $5 shipping w/o insurance/signature confirmation. So you have a $180 loss.
Is the risk of losing $180 to save $5 worth it to you? Probably not.
Lage Seller: Sells 100 per day of the same item for the same price. Since they work on volume, it only costs them $150. They know from experience that the loss rate is 1%. One loss costs them $155 (the $150 item cost plus the $5 shipping, also no signature confirmation or insurance).
To add the insurance and delivery confirmation would cost them $5 also. But, that adds up to $500 per day on 100 items.
So it is CHEAPER for them to eat the one loss than to insure all 100 at $5 each.
That is one of the advantages of working on volume. Of course, the above example assumes very high profit margins that are probably not very realistic. But the same principle applies.