#43 Top Rated Seller Tip-Make Money With FREE Shipping
First, let me be clear about something. I hate the term Free Shipping. It is a misnomer. There is NO Free Shipping. The correct term should be Shipping Charges Included.
I have been selling online long enough to remember when you made a profit on the shipping on almost every item you sold. When I started selling online in 2000 I could actually sell books for a penny and make over $ 1 off each sale. Over the years postal rates have steadily risen and the pressure has been applied to offer actual cost shipping or "Free Shipping"
I have bowed to the pressure to offer free shipping on some of my products. To my surprise I am now making money on Free Shipping in some cases. In an earlier post entitled, #23 Top Rated Seller Tip-Use Loss Leaders I advocated using loss leaders to help bring in sales and to increase your number of transactions to help you qualify for Top-rated Seller status easier.
Following my own advice I lisited some items I had bought in quantity at 40¢ each as a FP30 listing at $1.99 with Free Shipping. The listing costs me 35¢ and I average about 10 sales a month so this increased my cost to 43.5¢ per item. The FVF on this sale is 24¢. The PayPal fee on $1.99 is 36¢ bringing my costs so far to $1.13. Postage and cost of envelope, etc is 50¢ bringing my cost of this item to 1.63. So, before getting any FVF discounts I make 36¢ on each sale. If my time is worth anything this should be considered a loss.
I increase my profit quite a bit when a buyer buys 2, which happens quite often. When this happens my costs are as follows: Cost of items 80¢. Listing fee 7¢. FVF, before any discount is 48¢. PayPal fee is 42¢. Postage & cost of envelope stays the same at 50¢. This brings my profit on each item up to 81¢.
Last night a buyer purchased 4 of these. My costs on this sale were as follows. Cost of merchandise $1.60. Listing fee 14¢. FVF before any discount is 96¢. PayPal fee is 53¢. Postage and cost of envelope increased to 85¢. This brought my profit on each item up to $1.02.
If the shipping price was not included in the price I woud still be making more when sold in quantity due to the difference in PayPal fee but the big jump in profit comes with the reduced cost of shipping per item.
I know a lot of you will say I should rebate some of the shipping. I don't think so. Since the shipping is FREE there is nothing to rebate, is there?
I have been selling online long enough to remember when you made a profit on the shipping on almost every item you sold. When I started selling online in 2000 I could actually sell books for a penny and make over $ 1 off each sale. Over the years postal rates have steadily risen and the pressure has been applied to offer actual cost shipping or "Free Shipping"
I have bowed to the pressure to offer free shipping on some of my products. To my surprise I am now making money on Free Shipping in some cases. In an earlier post entitled, #23 Top Rated Seller Tip-Use Loss Leaders I advocated using loss leaders to help bring in sales and to increase your number of transactions to help you qualify for Top-rated Seller status easier.
Following my own advice I lisited some items I had bought in quantity at 40¢ each as a FP30 listing at $1.99 with Free Shipping. The listing costs me 35¢ and I average about 10 sales a month so this increased my cost to 43.5¢ per item. The FVF on this sale is 24¢. The PayPal fee on $1.99 is 36¢ bringing my costs so far to $1.13. Postage and cost of envelope, etc is 50¢ bringing my cost of this item to 1.63. So, before getting any FVF discounts I make 36¢ on each sale. If my time is worth anything this should be considered a loss.
I increase my profit quite a bit when a buyer buys 2, which happens quite often. When this happens my costs are as follows: Cost of items 80¢. Listing fee 7¢. FVF, before any discount is 48¢. PayPal fee is 42¢. Postage & cost of envelope stays the same at 50¢. This brings my profit on each item up to 81¢.
Last night a buyer purchased 4 of these. My costs on this sale were as follows. Cost of merchandise $1.60. Listing fee 14¢. FVF before any discount is 96¢. PayPal fee is 53¢. Postage and cost of envelope increased to 85¢. This brought my profit on each item up to $1.02.
If the shipping price was not included in the price I woud still be making more when sold in quantity due to the difference in PayPal fee but the big jump in profit comes with the reduced cost of shipping per item.
I know a lot of you will say I should rebate some of the shipping. I don't think so. Since the shipping is FREE there is nothing to rebate, is there?
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