In this post, I would like to discuss the topic of free shipping on eBay. Personally, I prefer to use calculated shipping rather than offering free shipping, but I want to share with you some tips on how to ensure you don’t incur losses on shipping if you choose to offer free shipping.
Shipping costs are often one of the biggest expenses for online sellers. Sometimes, the cost of shipping can be higher than the actual cost of the product itself. This can make it challenging for online sellers to remain competitive, especially when compared to companies like Amazon that offer free shipping to Prime members, or when advised by “gurus” to offer free shipping to customers.
If you decide to offer free shipping, it is crucial to accurately estimate the shipping costs, considering the worst case scenario. For instance, I am located in Indiana and the farthest shipping zone for me is the coast of California up to Washington State, then I would include the shipping cost for that zone in my product price. It’s important to note that eBay charges a fee of about 15% on the total purchase amount so you may to adjust your product price to cover this fee. For example, if you sell a $20 item with $10 in item cost and $10 in shipping cost, you will pay a $1.50 fee on the $10 shipping cost, which means you may need to charge around $21.50 to cover the 15% fee on the free shipping part.
It’s also recommended to pre-package your items to accurately determine the size and weight of the package for calculating shipping costs. Although this may require extra effort, it can help you avoid surprises and accurately estimate the shipping costs. If you are unsure about the size or weight, it’s better to overestimate rather than underestimate. For example, if you think the box will be 8x8x8 inches and 10 pounds, you could calculate it as 10x10x10 inches and 12 pounds to avoid any potential discrepancies.
It’s important to understand that offering free shipping requires careful planning and consideration of worst case scenarios to avoid losing profits due to underestimated shipping costs. While some sellers claim that offering free shipping doesn’t significantly impact sales, it’s likely to depend on various factors such as the type of product being sold and the preferences of the buyer. In summary, if you choose to offer free shipping on eBay, ensure that you accurately estimate the shipping costs and account for the eBay fees to protect your profits, and be prepared to prepackage your items to determine accurate size and weight for shipping calculations.
In this post, I want to share one of the mistakes I made when I first started selling, specifically for new sellers or those who have been selling for a while but haven’t taken advantage of this strategy.
When I first started selling on Amazon, I sourced most of my items from Walmart or Big Lots. I would buy items from their shelves and send them to Amazon FBA. However, one day I realized that I was spending more on sales tax each month than I would on a car payment. I had heard of people getting tax exemptions, but I was initially scared to do it. Eventually, I mustered up the courage and went to Walmart to sign up for a sales tax exempt card. It was surprisingly easy to do – all I needed was my state tax ID number for my business, and the service desk took care of it. Soon after, I obtained tax exemptions from other stores like Big Lots, Menards, and Rural King.
I don’t know why I didn’t start using sales tax exemptions sooner, but over time, I realized that it made a significant difference in my bottom line. In Indiana, the tax rate was 7%, so if I paid taxes on items and my competitors didn’t, they had a 7% advantage over me. This could explain why sometimes I couldn’t figure out why my competitors were able to sell items at such low prices.
If you’re new to reselling and have the proper business license and tax ID numbers for your state, don’t be afraid to go to stores and sign up for sales tax exemptions. It can be a bit of a hassle at the checkout, as some cashiers may not be familiar with the process and may need to call customer service for assistance. However, when you’re making a large purchase, the savings can be substantial.
It’s important to note that using sales tax exemptions for your online business is not illegal. You are running a legitimate business, and you are allowed to take advantage of this strategy. Chances are, many of your competitors are already doing it, so don’t miss out on the potential savings.
Have you ever gone to the post office with a bunch of packages to drop off, only to be asked for a scan sheet?
Let me tell you a funny story about what happened to me. I used to ship a lot of packages from my house, around 300 items in one day, and I had a note in my mailbox for the post office lady to pick them up. But it took her over an hour to individually scan all the packages and it filled up her little mail truck. That got me a visit from the local postmaster who told me I couldn’t do that anymore because they didn’t have enough manpower for it. So I started taking my packages to the post office myself, but then they didn’t want to scan them by hand either. They told me I needed a scan sheet, but I had never used one before, so I had to look it up and figure out how to do it.
It turns out that if you ship on Amazon, you can create a scan sheet which is basically a sheet with one master number. When they scan that number, it checks in all the individual packages, so they only have to do one scan. You can also do this with other services like Pirate Ship, eBay, and Etsy, but I found that it doesn’t work with Facebook Marketplace or Mercari. However, a workaround for Mercari is that you can ship on your own and include that number on your scan sheet if you’re using Pirate Ship.
Another thing to note about scan sheets is that if you’ve already printed one out for the day and you have more orders coming in, you can print another scan sheet and it will only include the packages you’ve added after the first one. So you can have multiple scan sheets, which is not a problem compared to individually scanning hundreds of packages. Also, if you ship after hours, you can change the shipping date on Amazon and Pirate Ship to the next day, and it will be included in that day’s scan sheet. However, you don’t want to toss any packages that are not on the scan sheet, as they won’t get scanned until further along in the system.
Using scan sheets can help keep you in good graces with your local postal workers if you’re a high volume shipper, and I personally like using Pirate Ship because I buy all my postage for eBay and Etsy through them and can print them all off on one scan sheet.
In this post, I want to share a little-known benefit of using Pirate Ship for scheduling UPS pickups. Let me give you some background first. I became an Amazon Seller during the heyday when it was easy to sell on Amazon and I used UPS shipping to send shipments to the Amazon warehouse multiple times a week.
During that time, UPS offered one year of free pickups if you opened an account with them. But what people didn’t talk about was that even after the free pickup year was up, you could still continue to get free pickups for several years. I learned this the hard way when I used the UPS service to buy a label, and it activated something in the back end that started charging me for weekly pickups. So, I closed that account and opened another one to continue getting free pickups for over a year, until UPS caught on and started charging me.
At that point, I slowed down my Amazon selling and didn’t need weekly pickups anymore. So, I switched to pay-per-pickup, which cost about $7.50 per pickup, and I believe the weekly fee was around $16. Since I was shipping less than twice a week, it was cheaper for me to schedule pickups and pay the one-time fee.
I am still using this method today, but here’s the secret hack: you can schedule UPS pickups through Pirate Ship for only $4. If you check the UPS website, it’s likely that their pickup cost is $8, so you get it at half the price with Pirate Ship. It’s simple to use, and you just need to schedule it by 1:00 PM on the day you want the pickup. In my case, even if the weekly price is $16, I come out ahead as long as I don’t ship more than 4 days a week. If I ship less than 5 days a week, it’s cheaper for me to use this method, which is why I continue to use it.
Even if you’re not shipping to Amazon warehouses like I do, you can use this feature when shipping with eBay or other platforms. And the best part is, Pirate Ship is free, so there’s no monthly service charge to access this option. You just pay $4 whenever you need to schedule a pickup, and you don’t even have to buy postage through Pirate Ship to use this feature. I personally pay for my UPS postage for Amazon through Amazon itself, and then I schedule my pickups through Pirate Ship.
Using credit cards with reward programs can be a great strategy for online sellers, but it’s important to evaluate if it makes sense for your specific situation. As an eBay and Etsy seller who also sells on Amazon, I use Pirateship for my shipping needs throughout the year, and I have it attached to my Southwest rewards card so I can earn miles for free travel. However, during the peak selling season in Q4, when I sell more merchant fulfilled products on Amazon, I wanted to see if it would be beneficial for me to switch to shipstation for my Amazon shipping.
One of the factors I considered was the monthly subscription cost of Shipstation. While Pirateship is free and works well for me throughout the year, I needed to determine if the rewards I would earn from my credit card would outweigh the subscription cost during the Q4 period. I also took into account that as a business expense, I could deduct the subscription cost from my profit, which would lower the overall cost.
To evaluate the numbers, I used Inventorylab to calculate my shipping expenses for Amazon merchant fulfilled products during November and December. I then multiplied the number of points I would earn from my credit card, using the value of a Southwest point at 1.5 cents, to see if it would be more than the subscription cost of Shipstation. I found that during the Q4 period, I would come out ahead by using Shipstation, but for the rest of the year, it would not be cost-effective for me, as most of my products are fulfilled by Amazon (FBA).
Another advantage of using Shipstation, especially if you’re low on funds or need more capital for sourcing, is that Amazon pays you the full payout while your shipping expenses may take time to be charged to your credit card. This can provide some extra cash flow for your business. However, it’s important to be mindful of paying off your credit card to avoid interest charges.
In conclusion, as a long-time seller with established numbers on shipping expenses, I found that using Shipstation with a credit card rewards program would only benefit me during the Q4 period when I sell more merchant fulfilled products. For the rest of the year, I will continue to use Pirateship for my eBay and Etsy stores, and add Shipstation only for the two months of November and December to earn extra rewards from Amazon shipping. It’s important to evaluate your own numbers and consider your specific business needs when deciding on the best shipping strategy and credit card rewards program for your online selling business.