Who pays for free shipping?

[juspreet]

Recently ebay launched its policy to prevent excessive shipping. While the spirit behind this initiative is laudable but the policy did not have desired effects.
What happens is:
A person registers as a seller, sells some items with low price and high shipping, get caught, is removed from site; some buyers get stuck because they have paid but still to receive the item and they don't know ebay procedures on how to get the money back or the item.
Anyway the seller is well versed with ebay policies so he's back with a new ebay id and keep on his good work.

Now lets see the other side of the coin. Due to this process the items of genuine sellers who are charging reasonable shipping charges but due to this their selling price is higher compared to our good friend above so the buyer feels that he is selling at a higher price.
Personally also if I am buying something after initial search I'll click lowest price first, so the buyer gets the wrong notion of actual price of the item.
This also results in sellers getting lower bids for their items as the buyers will check the buy it now price for the item before bidding.

Who looses?

But their is another angle to this. Now as a seller if I am selling at a genuine price and charging genuine shipping charges, my item will not appear at least the first five pages of search result assuming buyers clicks lowest price first, so I am left with no option but to do what others are doing, lower the item price and increase the shipping price.

How about free shipping?
From the beginning ebay is encouraging sellers to offer items with free shipping. All the major promotions by ebay had a clause that you offer free shipping all over India.
Now my fellow sellers are here for business and not for charity. Do you think they will offer free shipping and pay for it from their own pockets just to please the site visitors. For charity we can do something better.
So, the outcome is that when it is clear sellers will not pay shipping charges from their pockets so why is ebay encouraging promotions every time with free shipping.
Are we not fooling the buyers?

So, what's the solution.
On last few occasions of interaction with ebay team I suggested a formula to control this.
ebay ties up with at least two leading couriers. one economy and one premium.
Why two? Because I feel that some high value items cannot be risked to be sent by low cost courier as in case of loss in shipment they may wash away their hands and may not offer compensation.
And third, Indian post should be included as they have a wide reach and cover remote areas also.
How will it work is this?
When listing the item the seller is asked to enter the weight of the item viz 0-250 grams, 250-500 grams, 500gms - 1kg and so on. When done site automatically calculates shipping charges, ie local and outside seller's city. Then the sellers clicks on the courier he wishes to use ie economy, premium or India post. After this the site fills the shipping and handling charges and those should be fixed.
One more thing after the seller has shipped the item and marks item shipped he is asked to enter the airway bill no.
The benefits of this:

1) Shipping charges will be uniform and it will enhance buyer experience.
2) All the sellers will have a fair battle ground so genuine sellers will get more exposure.
3) It will save buyer's time to compare prices and make an informed decision.
4) Will result in more sales as buyers will not be confused about price and shipping charges variations .
5) When seller enters airway bill no on site after shipping, it will help ebay avoid buyer/ seller disputes when buyer claims item not received, so instead of asking seller ebay can track with the airway bill no whether the item was shipped or not and whether buyer has received it or not.
6) Will help reduce fake sellers as they will have to enter airway bill no. when shipped.
7) It will also result in sellers getting better prices from courier companies thus reducing shipping costs.
8) ebay will be able to compete with other online sites where shipping charges are lower and controlled by site owners.

That was a large write up but I guess if I had used less words I would not have been able to put my point across.

I would call upon all sellers and buyers to put up their views & suggestions on this so that we can tell eBay what needs to be improved on the site.

[sapana@ebay.com]

Hi juspreet,

I understand your anxiety that if a seller tries to cover his cost via exorbitant shipping charges, it puts you and other genuine sellers to a disadvantage. This is precisely the reason why eBay has the policy to take action against the members who try to un-level the playing field.

I understand your concern that a listing that has low price will come on top. One way to counter this is to ensure that shipping charges are also displayed besides the item price. Also, after listing fee, many sellers have started charging reasonable shipping charges because they are aware that the chance of an item with high shipping charge getting sold is limited. Another step towards this is to see if we can provide a total column on the search page itself. It has its own challenges given the various shipping modes offered by a seller. However, the same is being tested by some other countries and if they see reasonable success in the same, we shall consider rolling it out for India as well. We shall keep you informed in case we plan to go ahead with this change.

Also, free shipping is not charity; on the contrary it makes lot of business sense. Data says that the more you make a buyer calculate the price of a product, lesser is his chance to buy the product. If you are offering a product with price x, shipping y, insurance z vs a product with price a (x+y+z); the chance of the buyer buying the second product is higher. Most sellers, who have listed in the free shipping promotion, continue to offer free shipping, which probably indicates that they are benefiting from the same. (Keeping it simple really helps. Any extra click or extra work for the buyer might turn him off.)

I also agree with you that a negotiated shipping rate with a courier company is a great idea. While the team here is working towards the same, we are facing some challenge towards the same. Most courier companies give bulk rates to one client and the client normally makes a bulk payment for all the parcels that have been shipped. In our case, the courier company will have to have individual account with each seller and provide a discounted rate to each seller. The volume from the sellers could vary from 100 parcels a day to 1 parcel in a week. This increases their service cost and thus their willingness to provide good rates. Having said that it is an issue that we shall certainly find a solution to, but which will take a while and might not happen as soon as we want it to.

As usual, thanks for being expressive on the forum and brining your point across. It is a pleasure to hear from you and other community members. I hope I was able to provide some perspective on the topic raised by you.

Warm Regards,
Sapana

[juspreet]

Hi Sapana,

Further to my earlier post if you are facing problems in tie up with a courier company as you don't know the volumes than we can work this out.
Extend this facility to powersellers first on a trial basis. From data available to you, you can check the volumes they generate.
Then you sit and negotiate with courier companies about rates. Assign each powerseller a courier account no and they could use the nearest courier office for their deliveries and they could pay directly to their courier branch.
Only thing ebay does is to get subsidized rates from courier companies by telling them the projected volume and each seller settles his individual account.
However if you feel that they will be looking for payment from one place, then you can bill courier charges directly to the seller's ebay account and pay courier companies directly.

[juspreet]

Secondly I am not against free shipping but sellers loose money sometimes if they opt for auction sale and don't get enough bids. So free shipping is good for calculations but if it is offered on buy it now items only