When you set shipping and handling fees on eBay items that you sell, you must take into account every expense involved in your packing and shipping. You can’t make your shipping area a losing proposition.
However, too many eBay sellers have increased their shipping prices to outrageous amounts. Those sellers may think they’ve found a cute way to save a couple cents off their Final Value Fees (after all, Final Value Fees aren’t charged on shipping costs), but when the shipping fee equals a third of the item’s cost, a prospective bidder may think twice about placing a bid. Of course, if the item is big or the buyer wants it fast, he or she may feel better about paying higher shipping costs.
eBay penalizes sellers who charge high shipping fees and rewards sellers who offer Free Shipping by giving them better visibility in the Best Match search results. Try listing your item with the minimum shipping amount included in your selling price. Then offer buyers a second shipping option for Priority Mail (faster shipping) at a charge. Your item will still get the benefit of eBay’s Free Shipping search preference.
Remember that when calculating shipping costs, don’t assume that all you have to worry about is just the cost of your postage. You also have per-item costs for boxes, padded mailers, shipping tape, labels, and pickup or service fees from your carriers. Now and again, you may even pay the college kid across the street five bucks to schlep your boxes for you. Expenses show up in the strangest places.
In addition to adding up the packing and shipping supplies, you need to amortize the monthly fees from any online postage shipping services. When you occasionally pay for a pickup from the carrier, you need to add that expense to the shipping charges, too. The following list runs down some of the expenses involved:
Padded mailers: Select an average-size padded mailer that works for several types of items you sell. Selecting an average size for all your products works well because it’s cheaper to buy in quantity. Even if a few of your items could fit in the next-size-down mailers, buying the bigger size by the case gives you a considerable discount. Why keep five sizes of mailers in stock in quantities of 100 if you don’t have to? If you don’t use all the bigger ones, you can always sell them. And besides, padded envelopes don’t go bad.
Packing peanuts: Although storing all those packing peanuts is a real drag, when you buy in bulk, you can see some huge cost savings. BubbleFAST has a free-shipping offer on packing peanuts. eBay sellers, like BubbleFAST, sell packing peanuts for half what they cost when you purchase them from a brick-and-mortar retailer.
Packing tape: You need a stock of clear packing tape. The common size for a roll is 2 inches wide by 110 feet long.
Boxes: Hundreds of box sizes are available at different prices. Shop eBay, and also check out the Uline Web site for boxes at reasonable prices.
Online postage service: If you’re paying around $10 a month for the convenience of buying and printing online postage, that’s an expense, too. If you ship 100 packages a month, that amortizes to $.10 per package.
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Source:http://www.dummies.com/how-to/content/considerations-for-setting-shipping-costs-for-your.html
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