Rob & Melissa Stephenson from Flea Market Flipper talk about who pays for shipping on eBay - the buyer or the seller?
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Reseller Hangout Podcast - Who Pays For Shipping On eBay?
Rob: What's up, pro flippers? On today's episode, we are talking about shipping, but even more specifically, who pays for shipping when you sell something on eBay?
All right guys, so today a question that we get often is shipping. What happens in the shipping process? Who pays for it? Does a buyer pay for shipping?
Does the seller pay for shipping? How does the whole process work? We wanna break that down today and give you guys some answers about this topic.
Melissa: Because you will see that the, when things are offered, there's things that are flat rate shipping, there's things that are a certain price. There's things that are free shipping, so who is paying for the shipping?
And we're gonna break that down a little bit.
Rob: So that's it. To kick things off, guys, there's really three options for shipping. When you're selling an item on eBay, you have three options. The first one is calculated shipping. The second one, and we'll go into these in just a second. The first one's calculated shipping.
The second one is flat rate shipping, and the third one is free shipping. Those are your three options to pick, pick from when you're selling an item on eBay.
Melissa: And if you're just getting started, we usually recommend starting with calculated shipping because that is where you will have less likely to make a mistake.
Yeah, so calculated shipping. Basically you need to take the measurements before you list your item. And before we dive into all this, I wanna say too, like, the shipping part is really what gets people a lot really flustered, like when they're starting on eBay. If you're just getting on eBay, you kind of, you're doing your listing, you get to the shipping and it can feel a little overwhelming, like, well, what am I supposed to choose?
What am I supposed to do? So that's kinda what we wanted to walk through today. Absolutely. So the calculated is if you're just starting, like that's the best place to start because eBay's gonna calculate those rates for you.
Rob: And the name really describes what it is. eBay's gonna take your zip code and gonna take your potential buyer zip code, and they're gonna give your potential buyer a shipping quote, depending on your zip code and their zip code to give them the exact rate that it's gonna cost to ship from you to them. The thing that you have to do, like Melissa said, is that item that you're selling, you have to know what size box it will fit in, and you have to give eBay when you're listing the item. You have to give eBay the actual dimensions of that box and the weight of the box so they can get a good detailed quote on the shipping from you to them.
Like Melissa said, also, this is the best way when you're starting off selling on. This is the really, the foolproof way of making sure that you're not making a mistake. Another thing when you're doing calculated shipping is you can also add in handling fees. So if you have to buy a box, if you have to buy, a bubble wrap and packaging peanuts and all that, you can add an extra, you know, $5 or $3 or $10, whatever it is there.
Add that into handling. And eBay will add that on top of the shipping quote, which is cool. When you start off, you'll really, you'll start to see how much it costs to ship things from you to different sides of the country. And you'll just get a feel for it. So like we said, that's the best place to start.
If you're new to eBay, you can start with a calculated shipping. Yeah. And it's a little bit more foolproof.
Melissa: I will say adding a handling fee does probably pull your buyer away a little bit. Like they don't really love to see a shipping cost and a handling fee, so you might not get the sale because of that. So you just have to be a little bit careful, but you also want to cover yourself too.
So calculated shipping too goes in a, a, you can put it in the box and get it ready to go. Just make sure you mark it that I wouldn't seal the box because you still need to double check and make sure when you sell that item that is the right item. Absolutely. Because that could be the hard thing when you already pre-package it, you know, you could put it on a shelf and like, you know, kind of where your inventory is.
And it's already pre-packaged, which is nice cause you don't have to sh package it up. Once it's, it sells, it's ready to go. Slap a label on it, seal it up and you're good to go. Just make sure you either mark on the box what it is, the model number and whatnot.
Rob: So one note that I will make about shipping in general, for everything that you're doing, don't underestimate, don't. If your box is 12 and a half inches on one of the dimensions, don't say it's 12 inches. You'll come back and you'll get charged extra money. So make sure if it's 12 and a half inches, you're going to 13. If it's 12 and a quarter inches, make sure you're going to 13. You want to put the dimensions in so you're overestimating on the box.
You never wanna get chargebacks or not a chargeback, but you never wanna get double charged for shipping. And if you miscalculate or you have.
Melissa: They will charge you.
Rob: That's it. If you have the wrong numbers in there, they're gonna charge you more when they have to come back and bill you versus if you just pay it up upfront with the, the proper or overestimating the, the size of the box.
Melissa: Yeah, definitely. Yeah. Or weight too. Yeah. Calculations or weight. Like if you say, oh, I'm doing my label and it's less if I do it this, take it off a pound or two off. Don't do it.
Rob: Don't do it. , I, I learned this years and years and years ago. You know, I would work until I could get the price down as low as I possibly could.
And yeah, if I took an inch off or I took a couple pounds off, trust me, it comes back. They audit every single package and you will totally get charged back or, an extra fee on top of whatever you already paid. And you'll have to pay that. So, but let's go into that next type of shipping, which is flat rate, flat rate shipping.
So that is where you actually list an item on eBay. You have a good, so you've done calculated shipping for a while. You have a good idea of what it costs to ship some products from you across the country, halfway across the country, all those different places, so you have a good idea of what it's gonna cost you to ship an item.
This is where typically what we do is either flat rate or free shipping. But you put that in there. So you list the item and you click on the flat rate option and whatever it is, if you're selling something small, maybe you're gonna do a flat rate at $20. So the price of the item is this, the flat rate shipping is $20.
You are taking that risk on whoever buys it wherever they are in the country. They're giving you an extra $20 to make sure you get it delivered from you to them. So that is the flat rate shipping. You can name that price, whatever you want to, name it. And then the buyer pays that much on top of whatever they're buying the item for.
Melissa: Yeah, and it's not to be confused with flat rate, with priority either, because yes, there, there is a flat rate priority. So if you know like your item fits in a certain size box, you can charge that. You can charge whatever, but it's not, you're not selecting flat rate priority by selecting flat rate.
You're just charging a flat rate for that item to be shipped. That's it. So if that makes sense. Hopefully that's not confusing.
Rob: No, I mean that's it. The buyer's getting charged an extra fee and you just have to make sure with that extra fee, did they get charged for shipping, you can deliver the product of what you have to them.
Yeah. So that's the biggest thing. And you have really have to know how to ship. You have to have a good idea of what it costs to ship the size of the box that you're shipping. You have to know. So we do a lot of flat rate. Typically we'll do flat rate with freight shipping, so I know it's going on a pallet and I have a good idea of what it's gonna cost for me to ship something from here across the country.
And that's typically what I will do the flat rate at at $299. I'm pretty confident that I can ship a normal size pallet from us over to California, Washington, all those different places that are across the country. And I know that I can do that within that $300 range. Yeah. So that's when I will actually do flat rate shipping.
Melissa: I wanted to add too, whenever we're shipping, so like we do a lot of our shipping, according to going to like California, Washington, cuz we're in Florida, so we're gonna go all the way across the country. But it, so what if I do that for flat rate and now my items are not going that far and I charge them an extra $3?
Like, so what do you do? Like, do you refund the buyer? We've gotten this question before and for us in our business, like the person knows what the price is for shipping. Whether or not you just put that into your handling time, because we don't, we don't refund the customer if it was cheaper for shipping, because sometimes we're gonna be a little under and sometimes we're gonna be a little over.
So it ends up balancing out in our business. Like so if we go to send something across, it goes farther, or we just underestimate a little bit by a couple dollars. Now, like we, it just all evens out. It does. I'd have to, to say.
Rob: No, that's good because I, I mean, I'll take example. Just a couple days ago I shipped out, two pallets.
Two stretcher pallets. I charged the buyer $300 for shipping on each pallet. The first pallet was that I shipped, went to California up, it was $208 I believe. I charged them $300. So do I go back and give them the remainder of the. I don't do that. All I do is figure, hey, I got paid the money that it took me to pallet this item.
And materials too, exactly. Some people will even put in their listings, hey, this is the flat rate fee for, shipping, but this, you also gonna have to pay an extra $150 for materials and for time spent palleting in an item up. Some people do that. I don't, I just put a flat and if it would've cost me $350, I wouldn't go back to, back to the, the buyer and say, hey, it's an extra $50. I would pay the extra money because the other thing with what we do, we have huge profit margins on our items and I would just build it in and take it outta my profit. So that's one of those things that Melissa's saying, they ebb and flow. It's where you sometimes it works out in your favor and sometimes it won't.
But after through all the sales that you do, they really even each other out when you know what you're doing with shipping. Now you, you quote somebody $20 for something and it costs you a hundred dollars to ship it and your profit's not there. That's gonna be a problem. So you really have to know what you're doing if you're, if you're quoting people flat rate shipping quotes.
Melissa: So, yeah.
And well, I wanted to do another topic, but we'll talk about that on the next one. Cool. So on the next time is, or the next type of shipping. Free shipping. So we do a lot of free shipping on our items and we go back and forth between flat rate and free shipping. We don't really do calculated anymore.
Yeah, so it was just flat rate and free shipping, but we just build it into the price. Yeah. So it's either gonna be a little bit higher price with free shipping or a little bit lower price with flat rate shipping.
Rob: Yep. And so kind of to swing it full circle back, the buyer, no matter what, your buyer should be paying for your shipping, whether you're doing flat rate and you're making sure that you're, the buyer's paying that, and you have the profitability to be able to do that, whether you're doing free shipping and you're raising your price of the item.
So the, the buyer is still paying for shipping that is the ultimate goal in this business. You do not wanna lose money on shipping. Our goal is not to lose money on shipping. So ultimately the buyer should be paying for shipping no matter which item that you or which type you select to do, the buyer should be paying for shipping.
So, and I'll add on the last part, free shipping. We go back and forth, like Melissa said, between flat rate and free. And it is, the reason we do it is. Some buyers want to see a cheaper price on the item that they're buying, and they don't mind that price getting added cost afterwards for shipping. And some buyers, they wanna see that free shipping item, that, hey, I'm, I'm selling a big pallet or something on a pallet, and it's getting shipped to me for free.
And they get more excited about the free shipping. So individually, it depends on what type of, exactly what type of buyer, and that's why we switch back and forth. Sometimes we'll have the price at, you know, $5,000 with free shipping, and sometimes we'll lower it down to $4,500. With flat rate shipping of $499 and do it like that just to show the difference to the buyer. They have different options to do and which one will actually connect with that buyer who is looking for that item. Yeah.
Melissa: So if you're starting out and you're like, oh, a little overwhelmed with shipping, like you don't have to be overwhelmed because also know that if you do make a mistake and say you do a flat rate of, like you said before, $20 and it's gonna cost a hundred dollars to ship and you didn't realize it like you're oversized on your box and it just, the price is not gonna be worth it to ship it.
So you are not required to ship that item. You, I mean, the person paid, you're required to give them a refund if you're not gonna ship them the item, but you can talk to them and say, hey, it's not gonna be worth it for me to ship it. I'm sorry. So sorry. You know, be apologetic. Good customer service always, but you're not obligated to have to lose money on an item, so make sure you yeah.
Rob: No, absolutely.
And I was just gonna say, I'll give you an example of that as well. We sold a car carrier a hitch receiver. And this was just a couple months ago. It goes in the back of your hitch and then has a big box on the back, Thule, I don't know how to pronounce it.
Melissa: Somebody said it's Thul-e or? I don't know what it is.
Rob: Anyways, it's one of those car carriers that you goes in the back of your hitch. It's got a big box that's waterproof and you do it well. We put it on there, we sold it, and I did, I think I did free shipping on it. You did. So I did free shipping on it once. And somebody.
Melissa: Cause you thought it was gonna break apart and you could put it in a box.
Rob: Somebody in California bought it and by the time, and I even took an offer, I took less money on it, because they wanted it. I took less money. I worked to deal with them. They bought it, they paid for it. And when I went to actually ship it, I had assumed that it would come apart, and I didn't look at it that closely.
I assumed it would come apart and I could fit it into a box and it wouldn't be a big deal. Well, when it came down to it, everything was pop riveted, so it didn't have screws to unbolt anything, and it had to be shipped in, a box, which it wouldn't fit in a box. It was too big to ship FedEx or UPS. It had to go on a pallet, and I wasn't aware of that when I did it.
It's really my fault. But I wasn't gonna take the hit on shipping. It was gonna be like $300 some on it, which I was gonna lose money. I messaged the buyer immediately. I refunded his money once I found this out. And I refunded his money and I said, listen, I'm so sorry for the inconvenience, but it's gonna cost me over $300 to get this shipped to you.
I can't do that. I I'm gonna lose money on it and I can't do that. And he understood and he tried to actually come up and pay for the shipping, which I, I, I said I would do it. But then he found one closer, which I was glad he was gonna pay a lot more for it than it was really worth. But he found one closer and so he ended up buying that one instead.
But all that being said, I had the opportunity to either cancel the auction or cancel the listing and refund the buyer, or I could actually, do it and lose money on the item, which I'm not in business to lose money. So you have those options when you are selling. Don't be scared if you have to do a cancel and you have to refund a, just don't get in a habit of doing it every single time you sell something.
Melissa: It's not, it doesn't, eBay doesn't love that.
Rob: Don't, it's not a good practice, but, you know, once a year, twice a year and something like this comes up. Then absolutely. It's not the biggest deal in the world. Just do it. Just know you have to refund the money. You can't keep the money, refund the money, and then re-list the item with whatever you learned from the process.
Re-list it. And that's what I did as well. I knew that I was gonna have to pay a lot more for shipping. And I put a flat rate shipping charge on it so I would be able to cover it for freight shipping instead of shipping in a box.
Melissa: Yeah, so, so don't be afraid of making mistakes. They do happen every once in a while.
It's part of the business, part of learning. And you can always recover from them. That's it. So the biggest part of the answer to the question, who pays for shipping? The buyer does pay for the shipping, whether or not physically they're paying for it, in the listing, or they're paying for it on, on addition.
So, with either flat rate or calculated shipping. So they are paying for it. It's coming out of the profit, it's coming out of, yeah, the whole price of the thing, so.
Rob: Absolutely. So, all right guys, so if you're watching this and you wanna go or listening to this and you wanna know, hey, how can I learn more about this flipping game that you guys are always talking about and so jazz about, where can you go?
Melissa: FreeFlippingCourse.com.
Rob: You guys rock. We have so much fun doing this. Thank you for hanging around. Cannot wait to see you on the next episode.