The Ultimate Guide to Shipping for eBay Sellers!

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[ebay-shipping-guide] By now everyone should be aware of just how important shipping is when selling online, especially on eBay. Delivery is one of the most important aspects in buyers’ eyes and this is shown by the fact that two out the four detailed seller ratings are shipping related (dispatch time plus postage & packaging cost)!

And as well as being so important to your buyer’s experience, shipping can also have a huge effect on your margins and profit. I see so many eBay sellers charging stupidly high prices for shipping and it’s just so inefficient and wasteful – they’re losing countless customers and leaving money on the table all because they’re unaware of the best ways to ship their items.

Well not anymore, in this guide – I will go through all aspects of shipping on eBay and will reveal all the best tips and tricks I’ve learnt through my years of experience that will allow you to ship your items cheaper and faster – leaving your customers ecstatic and more money in your pocket!

So let’s get started.

eBay’s Selling Policy on Postage and Related Charges

The first thing we need to cover is eBay’s rules regarding shipping and what exactly you’re actually allowed to charge for as eBay are very strict on shipping charges and want everything to be completely transparent for buyers.

It is against eBay’s rules to provide unclear or misleading delivery information or to charge unreasonable fees for postage and related services.

This means you have to clearly specify the actual postage cost (i.e. the final P&P charged) plus the cost of packaging materials. If you offer any additional services to a buyer, such as proof of postage, recorded delivery, signature confirmation etc., you can only charge what they actually cost.

So if for example your base postage method is Royal Mail 2nd Class but you offer the choice to upgrade to 1st Class – you can only charge the additional cost to you and NOT anything extra.

FREE Delivery

While we’re on the subject of postage charges, let me quickly say that as I’ve mentioned before on this blog – I always recommend offering FREE delivery unless you have a very good reason not to.

There are many advantages to offering free delivery to your eBay customers, including:

Automatic 5-star DSR for postage and packaging charges!
Higher visibility in best match search results
Higher conversion rates (buyers LOVE free delivery)
The ability to receive the Premium Service badge on your listings

It’s worth offering free delivery for this last point alone as having listings with Premium Service badge again means higher conversion rates (more sales and more profit) as well as a 15% discount on your final value fees, being a Top Rated Seller.

Now I know what you’re thinking; “but how can I charge nothing for shipping without losing money when Royal Mail increase their prices every year”!?

Well of course it goes without saying that you can’t really offer free shipping, but instead you just have to build the cost into your product’s selling price.

[free-shipping] In theory it shouldn’t really matter whether you charge £15 + £4 shipping or £19 and free shipping as the result is the same – the buyer pays £19 in total. BUT the reality is very different! It has been proven countless times that FREE sells and shipping is no different… there’s a reason Amazon, eBay and other big companies are pushing free shipping so strongly, as they know that’s what buyers want and they know it increases sales!

And that’s without even considering the added benefits given by eBay when you offer a free delivery option in your listings.

So, if you can, always try to provide that magic free shipping option to your buyers, and one way to help you do this is to always use the cheapest shipping option available for the particular item you’re selling.

One thing I always advocate is being a “smart seller” and making the most of the options and resources available to you; and running down to your local post office and blindly paying whatever Royal Mail charge for every package you send when there are often far better (both faster and cheaper) options available is NOT smart, not at all!

Royal Mail Price Increases

As any eBay seller will know, Royal Mail have increased their prices fairly constantly for the last few years, with the most recent increase taking effect on 31st March 2014.

[royal-mail-price-increase] These price increases will obviously have had a negative effect on any online sellers, who will either have had to absorb the extra costs (thereby lowering their margins and profit) or pass it onto consumers in the form of higher prices.

There’s not much we can do about price increases and at least everyone is in the same boat… but one thing it does mean is it’s now often a better option to go with a courier service rather than Royal Mail.

Generally speaking, Royal Mail is still the cheapest/best option for small and lightweight items (especially anything that can be sent as a large letter or small parcel) but for anything above the weight and dimension limits a courier will often work out cheaper.

The current size and weight limits for a large letter is: 353mm x 250mm x 25mm, 750g

And for a Small Parcel: 450mm x 350mm x 80mm, 2kg.

We’ll go through some real life examples so you can see how it works for a few different products but before that, let me quickly mention something about couriers and how to get the best prices from them, without having an account and without sending large volumes of parcels…

3rd Party Courier Companies/Middlemen

[parcel-monkey] The best way for you to access the services of large courier companies such as Hermes, City Link, UPS, Yodel etc. at a discount to the prices on their own website, is through 3rd party sites/middlemen such as Parcel2Go or ParcelMonkey.

There are many such sites on the internet but I’m going to stick with these two for the purposes of this article as I’ve found them to generally be the cheapest or at least close to the cheapest for a variety of parcel sizes. Parcel2Go works out best for medium sized parcels and Parcel Monkey for very large and heavy parcels.

Of course it will always be worthwhile checking a few of these such sites to see what sort of prices you get for your packages as it will always be slightly different depending on the size and weight.

These companies book huge volumes of deliveries directly with the courier companiesand therefore get the best pricing, which you can then take advantage of.

In essence, booking through these companies is like having your own account with the couriers – so it’s a great option for small time sellers or those new to eBay who aren’t doing the volume needed to go directly to the couriers.

Royal Mail vs Couriers

[royal-mail-versus-couriers] So let’s now take a look at a few different products of varying weight and size to see whether it would be best to go with RM or a courier company:

1) Video Game

As mentioned above, for an item like a video game which can be sent as a large letter, Royal Mail will almost always be the best option but let’s take a look anyway –

A video game will fit in a D/1 size jiffy bag (170mm x 245mm) and including packaging will weigh around 160 grams.

The cost for sending this via RM would be:

£1.17 2nd Class
£1.24 1st Class
£2.34 1st Class Recorded.

And the cheapest option via courier is £2.98 for Hermes 2-3 day delivery.

So overall not much more expensive considering the courier will collect from you and the higher level of compensation offered if not paying for recorded delivery, but overall still not worth it over Royal Mail.

Winner = Royal Mail!

Next, let’s take a look at a medium sized item:

2) Pair of Jeans

This would weigh around 700g fully packaged with dimensions of 30cm x 40cm x 3cm.

With Royal Mail this would go as a small parcel and would cost:

£2.80 2nd Class
£3.20 1st Class
£4.30 1st Class Recorded

The cheapest courier would again be Hermes on their 2-3 day service at only £2.98 collected. A signature on delivery would cost an extra £1.

So in this instance both options are fairly similar with the courier being slightly cheaper, it would mainly depend whether you wanted the faster service (RM 1st class) or wanted to avoid a trip to the post office.

Winner = DRAW!

3) DVD Box set

So now a slightly heavier item… I’ll be using a box set weighing 1.5kg with packaged dimensions of 25cm x 15cm x 15cm.

With Royal Mail this would again be classified as a small parcel under the new size rules. The cost to post this item anywhere in the UK would be:

£3.80 2nd Class
£5.45 1st Class
£6.55 1st Class Recorded.

Once again Hermes is the cheapest courier, costing only £3.32 via parcel2go.

As mentioned earlier in this article, now that we’re reaching bigger items that can’t be sent as a large letter with Royal Mail, the couriers are starting to beat it on price by a small margin, in this instance costing about 30% less.

Winner = Courier!

Next we’ll give Royal Mail a real test with an overly large and heavy item:

4) Large Box of Toys

Let’s say you have a large box (40cm x 40cm x 30cm) filled with children’s toys and weighing 8kg in total; to post such an item with Royal Mail would cost a minimum of £20.25 via their 2nd Class service! Using Parcelforce would be slightly cheaper at £16.40.

Compared this to a courier, Yodel, who will collect and deliver the very same parcel for £7.19 – a huge difference!

This really shows the usefulness of couriers for larger items. Just think about what a positive affect it will have on your sales to be able to offer a delivery option that costs about 65% less than Royal Mail.

Winner = Courier!

And for our last example, let’s compare the price of posting an even bigger box.

5) Pewter Chess Set / Chess Table

The dimensions are 60cm x 50cm x 50cm and the weight is 15kg.

The cheapest option if using your local post office would be £23.14 via Parcelforce express48compared to just £7.20 via Yodel 48 or only £8.10 for Yodel next day delivery.

Once again a courier would be significantly cheaper – sending 3 boxes via Yodel costs less than 1 via Parcelforce (RM)!

Winner = Courier!

So as I’ve hopefully illustrated with my examples, the general rule of thumb that I mentioned earlier holds true – for small/lightweight items that can be sent as a large letter or small parcel, Royal Mail is the best option but for large or heavy items, a courier will almost always offer you significant savings.

And again, for couriers it’s always best to check a third party site like parcel2go as well as the courier’s own website, as the prices they offer vary slightly – so it’s worth shopping around to get the best deal possible.

International Delivery

[international-delivery] But what about deliveries outside of the UK?

Many eBay sellers nowadays are looking to Europe, America, Australia and many other countries around the world to expand their market so if you can offer competitively priced shipping options to customers from these countries, you’ll be one step ahead of the competition!

So who should you use for international deliveries? Well again similar principles apply but with shipping outside of the UK, the differences in price can be even greater!

Let’s go back to our first example, a video game, and see how the couriers stack up against Royal Mail:

1) Single Video Game

With Royal Mail postage for one game would be £3.70 and if you needed delivery confirmation, £8.70.

The cheapest courier option, using the same Parcel2Go and Parcel Monkey, would be £14.27 (using either Trakpak or Parcelforce).

Winner = Royal Mail!

But as you can see, neither option is really affordable if you need delivery confirmation, but generally international buyers won’t get just a single, very small item such as a video game (as the price difference is not worth the shipping cost) so let’s look at a more realistic scenario:

2) Small Box of 7x Video Games

This would weigh around a kilo, with dimensions of 20cm x 15cm x 13cm.

International Standard with RM would cost £9.50 and International Tracked and Signed £14.50

For both courier sites, their prices stay exactly the same, so £14.27 via either of the 2 options.

Winner = Draw!

It may seem surprising that the couriers charge the same price for sending one game as they do for sending seven but it’s just how I mentioned earlier; it’s when sending bigger parcels that the couriers start to offer much better value in comparison to Royal Mail.

To save us going through all the individual examples again, I’ve compiled a table for you to see the best shipping option for a variety of parcel sizes to a few different countries around the world:

*But I will not include Royal Mail’s standard international delivery option in this comparison as it doesn’t include any form of tracking and only offers compensation up to £20 – which is not really a viable option for international eBay orders.

[international-fees] So as you can see, it’s a similar story again – with Royal Mail offering competitive pricing on smaller items but couriers offering much better value for heavier or oversized items (sending the large box of toys to France would cost over £60 using your local post office – over 3 times more expensive than having a courier collect!).

I think by now you’ve realised that the key to getting the best postage price possible is to comparison shop! It’s not a simple case of “always use company A – they’re the best!”… it really does depend on many different factors including:

The item’s size and weight.
The item’s value (some options may seem great at first before you realise no cover is included and you have to pay for insurance on top).
Whether you need tracking and delivery confirmation (more on that later).
How fast you need the item to arrive.
How easy it is for you to get to the post office – for some people that will be a big consideration if they have to drive and queue up for ages.

I think you get the point! There is no one right answer for everyone. The key is finding the solution for your business and products so you can offer the best shipping option possible to your buyers.

Just please don’t be one of those eBay sellers who puts £40 for postage because that’s how much his local post office charges – you’re simply driving away customers and leaving money on the table.

And for anyone with a specific niche or anyone selling the same type of products, this will be a one-time job. Just one day, spend some time researching your various options and you’ll reap the rewards for years to come!

Now I want to talk a little bit about other services/accounts offered by Royal Mail and Post Office for businesses as obviously in the above examples, I’ve assumed you’re just sending mail as a regular customer.

Drop & Go

[drop-and-go] The first thing I want to mention is the new fast-track service for online sellers and small businesses, called Drop & Go.

It’s basically a free service that allows you to beat the queues and just drop your mail off at the post office when needed.

All you need to do is complete a very simple, one-page registration form and you’ll be given a Drop & Go card. There are no minimum spend or any other requirements so it’s perfect for new or part-time eBay sellers.

Once you’ve set up an account and are given a card, you need to top it up so there’s a pre-paid balance. Then the next time you need to use the post office, simply go straight to the fast-track counter, drop your mail off along with a Drop & Go Manifest and after a few quick checks (basically making sure you have enough balance on your card) you can leave! No need to wait around for tedious paper work to be completed or for your mail to be processed – that will all be taken care of later on, with you card charged as they go.

So no queuing and no waiting – what could be better! Especially considering that’s it’s a completely free service, eligible to anyone.

And don’t worry if you need proof of postage or tracking receipts – they can all be kept for you to pick up whenever you want!

Overall I think this is a great new service for small sellers and I can’t see any reason for you to not sign up for it.

Franking

[franking-machine] You may have come across this term before but were unsure of what exactly it meant? Well basically franking is a quick and easy way to manage your mail, while saving time and money.

With franking, you have to buy or rent a franking machine from one of Royal Mail’s authorised manufacturers/suppliers which you can then use to buy your mail at a discount to regular prices!

How much you save will obviously depend on the volume you send as you have to factor in the machine rental cost but here are some of the current franking discounts to give you an idea:

[franking-prices] So as you can see, the savings are sometimes quite significant, especially for regular 1st and 2nd class stamps.

For a full list of the 2014 franking prices, please take a look at this wallchart.

Then for the actual franking machine, which as I mentioned before you can either rent or buy, what you need will depend on your situation, the type of mail you send, what features you want etc.

The best thing to do is contact a few of the authorised manufacturers and get some quotes so you can assess what savings you’ll make based on the volume you send. Here is the full list of suppliers approved by Royal Mail.

There are also a few websites online that will send you quotes from a few different companies if you fill in your info so may also be worth trying a few of them, such as:

Easyfranking & Frankingmachines

Apart from renting fees, you’ll also need to purchase labels but all in all – if you send significant amount of parcels each month, franking will provide you decent savings.

Printed Postage Impressions (PPI)

[printed-postage-impressions] Another Royal Mail alternative to franking machines is Printed Postage Impressions, better known as PPI. PPI is basically when you pre-print your own postage (Royal Mail labels) onto your packages.

You then drop them off at your post-office (in one lot) or have it all collected (though this comes at an additional cost)– simple!

PPI is also marginally cheaper than franking but of course you don’t have to buy a franking machine or pay any rental fee.

You can find full details on current franking and PPI pricing from Royal Mail’s 2014 Business Price Guide here

And so you can also compare all the Royal Mail options, regular franking is generally one or two pence more expensive than the account price for anything being sent as a letter but for parcels they’re exactly the same. And MailMark franking is the same price as account.

How Do You Apply for PPI?

One of the benefits of PPI is you will be given a credit account with Royal Mail (usually up to 30 days) so you don’t have to pay for postage as and when you use it. This will of course help with your budgeting and cash flow.

But this also means that to be accepted for PPI and to be issued with a license, you first have to apply for a Credit Account with Royal Mail. To apply you should either speak to your account manager or call Royal Mail on 08457 950 950 – but bear in mind that as you are being given credit from Royal Mail they will carry out a standard credit check on you.

You also need to be a registered business, have been trading for over 3 months, and spend at least £100 a week on your postage.

Then once your application is approved, you’ll be issued a PPI number and set up onto Royal Mail’s Online Business Account.

There are some terms and conditions you have to adhere to when using PPI, for both the design of the labels as well as the actual packages, such as:

You must send an accurately completed confirmed sales order or posting cheque with every mailing;
All mail must be presented in a fit state for posting, and in containers that are clearly labelled;
Mail should be bundled and faced, separated by class, price band, format and service type;
A single PPI posting is one that we can clearly identify as one consignment;
If you wish Royal Mail to return undeliverable items, you must include a return address on the back of each item. This must be an address within the UK. Without this, undeliverable items could be destroyed.

All fairly obvious and nothing that should cause you any problems.

So overall PPI is a good alternative if you send a large volume of mail as you will save a lot of time in comparison to the more labour-intensive franking option. Plus of course there is no machine rental fee to pay!

Courier Surcharges for Rural Deliveries

[courier-sur-charges] One thing you have to be aware of when using a courier for your deliveries is the large surcharge they add on to deliver to the Highlands or Islands – which can be as much as 50% or even higher!

You can of course simply add on this extra cost or refuse to deliver to areas that are “too remote” but that is bound to annoy many potential customers and will either result in the loss of a sale or potentially low DSRs being left.

A survey by Citizens Advice Scotland had more than 3,000 messages received from Scots unhappy at the unfair delivery charges applied to people in rural areas… So if you can offer delivery to these places without a huge surcharge you’ll be one-step ahead of your competition.

But how do you do that without absorbing the cost yourself? Well the answer could be good-old Royal Mail! RM charge a flat rate for delivery anywhere in the UK so in some instances where they may have been more expensive than the courier, they’ll actually work out cheaper for deliveries to the Highlands and Islands.

But of course as I’ve mentioned a few times, you should always weigh up the options in your individual case and use what’s best! It’s not as simple as me saying always use Royal Mail for these deliveries as they may still be more expensive in some cases… but just be wary of these surcharges imposed by couriers and wherever possible; always offer alternate methods to your buyers.

That way you’ll keep them happy and get those few extra sales that your competitors are missing out on.

Printing Postage through eBay

[paypal-shipping] If you’re just starting out or are not using any of Royal Mail’s business services, then you can also pay for and print postage labels directly from eBay itself, though this only applies to delivery services from Royal Mail, Parcelforce Worldwide and Collect+.

Though the Royal Mail pricing is the same as you’d get at your post office, eBay has negotiated special postage discounts with Collect+ and Parcelforce Worldwide and they pass these savings on to you.

The discount for Collect+ is minimal (3%) but with Parcelforce it can be as much as 72% on larger items!

There are a number of other advantages to using eBay’s Pay and Print Label service if you’re just starting out or aren’t using any of Royal Mail’s business services, such as:

Quickly and easily pay for postage online using PayPal;
Print labels pre-filled with your buyer’s details (though you can change it if needed);
Automatically letting your buyer know that you’re getting ready to post the item and updating them with any tracking info;
Saving time at the post office.

The process for printing labels is very easy; you just go to the Sold section under My eBay and select Print postage label (which will be next to your item).
Then review the pre-filled data to make sure everything is okay.

Once you’ve done that, enter the weight of your packaged item and click Calculate. To compare pricing click Compare delivery services, then select the one you want and click Save.

Lastly, you can add a note to your buyer in the Add message to buyer email section (this will be included in the preparing for dispatch email eBay automatically sends to your buyer) and then all that’s left is to Pay for postage (via PayPal) and Print postage label. You don’t need a special printer or adhesive labels for this, simply print the label on normal A4 paper and attach it to the package.

And that’s it – simple and easy! A useful tool to save time and hassle for new sellers.

Lost Shipments/Delivery Confirmation

[signature-on-delivery] A big fear of many people looking to start an eBay business is the dreaded item not received claim, and it’s something I receive a lot of emails about.

Basically if you post an item without signed for delivery/delivery confirmation then if the buyer claims to have not received the item, you will have to refund them in full.

It DOESN’T matter if you have proof of postage, if you can’t prove delivery via a tracking number, eBay will always side with the buyer.

And because of this, you see many people recommending that you send all items recorded delivery so you have proof of delivery should you ever need it.

However I don’t agree with that 100%, as a smart seller would calculate whether the extra postage costs are worth it in the long run or is it better to simply refund the occasional claim?

This is something that will depend entirely on your individual circumstances – what is the cost of the item? What percentage go “missing”? How much extra is recorded delivery? These are all things you need to take into account before you make a decision on this.

Let me run you through a few examples to make sure you understand exactly what I mean:

If, let’s say, you are a video games seller and, for simplicity purposes, every game you sell costs you £10.

You send everything 1st class so your two postage options are:

Royal Mail 1st Class – £1.24 OR
Royal Mail 1st Class Signed For – £2.34

The second option of course includes delivery confirmation.

Let’s say on average, 1 from every 100 games you sell results in an item not received claim – what would be the best option?

Well if you didn’t send recorded – posting 100 games would cost you £124 plus replacing the game “not received” costs you another £10 so in total £134.

If however you send everything recorded, you won’t have to replace the lost game as you have proof of postage, so your total cost will be £234.

Exactly a hundred pounds more than if you just accepted the occasional loss in order to save on postage.

So not very smart to send recorded in this case!

Let’s take a look at another example; someone selling custom branded Chinese tablets that cost £75 each.

The two postage options are:

Royal Mail 1st Class – £5.45 &
Royal Mail 1st Class Signed For – £6.55

This time, 2 from every 100 tablets sold get an item not received claim.

Sending without delivery confirmation would cost £545 in postage plus another £150 to replace two tablets, meaning a total cost of £695.

Sending all items signed for on the other hand would mean no replacement costs and total postage of £655.

So in this instance, posting items signed for is the better option.

Of course these are simplified calculations as I haven’t considered legitimate INR claims or factored in any compensation you might receive from Royal Mail as that is heavily dependent on a cooperative buyer.

But I hope this illustrates that you shouldn’t just blindly listen to those people who say “send everything recorded” or “just send everything via regular post” as there is no one right answer and a smart seller would take the time to calculate the best option for their business. And this blog is all about making you a smart seller!

So I hope I’ve covered everything in this post and you’re now ready to tackle shipping on eBay armed with my years of experience and knowledge! If however I’ve missed anything out or there’s something else you’d like to ask me – don’t hesitate to post below in the comments section and I’ll do my best to help you out.

Until next time.
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