AuctionBytes interviewed shipping expert Mark Taylor to get some practical advice for online merchants and to get his take on eBay's new controversial policy around shipping costs.
Taylor writes the ShippingCoach.com Blog and is Chief Logistics Officer of RedRoller.com, which provides access to real-time prices from shipping carriers and allows merchants to compare results, generate and print shipping labels, and arrange for package pick-up. Concurrently, Taylor runs a company founded in 1989 that designs and installs complex shipping systems for clients such as Ford Motor Company, Michelin Tire, Scherring Labs, Standard Register and Unisys.
Taylor said eBay bought Skype to eliminate a friction point in communications, and it bought PayPal to eliminate a friction point in payment processing. But shipping is still a friction point for buyers and sellers on the auction site. He called eBay's latest policy that requires sellers to specify shipping costs in listings unfair because the auction site's shipping calculator excludes some carriers. "It is unfair to sellers who found a better way to save on shipping," he said.
For example, if DHL@Home is less expensive than USPS, sellers would be able to save their customers money or increase their profitability. But because the eBay shipping calculator does not support DHL (or FedEx), sellers would be forced to enter a flat-rate into the shipping field of eBay listings (http://www.auctionbytes.com/cab/abn/y08/m03/i25/s03).
There is no way to ensure you'll even break even when you specify a flat rate but are using shipping services with distance-based rates, Taylor said.
He went on to say that six out of every ten people that ship on eBay are paying too much for shipping, and he offered four tips that all online merchants should consider.
Tip #1: Don't Pay Retail
A little known secret is that the parcel carriers have two sets rates; one for retail customers and one for commercial customers. The rates for commercial customers are as much as 30% less. You can qualify for a commercial rate with most carriers by signing up for an account or shipping online.
Tip #2: Compare Rates
According to Pitney Bowes, "Studies show that you could save 33% or more on shipping by using a rate comparison service." You don't just fly on one airline; why would you ship with a single carrier?
Tip #3: Leverage the Unique Advantages of the U.S. Postal Service
When you compare carriers, remember to include the U.S. Postal Service; it has some niches where the national carriers can't compete on price. Examples include the Priority Mail Flat Rate Box, First Class Packages and Media Mail.
Tip #4: "Use an Accurate Shipping Scale with a Digital Display
The rates for shipping are determined by the weight of the package. Even one ounce can make a difference. For example, an 8-ounce First Class Mail Parcel costs only $2.32 to ship compared to the Priority Mail rate of $4.60 - a 50% savings.
You can read Mark Taylor's blog at http://www.shippingcoach.com and visit RedRoller.com at http://www.redroller.com.
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