Wednesday, April 15, 2009

Do you know what a buyer's premium is?

A recent post and dialogue by Gellman at SCU got me to thinking about how spoiled eBay buyers have become. (Myself included, admittedly.)

Auction houses like Robert Edwards, Legends, Hunt, etc. routinely charge buyer's of sports memorabilia an often exorbitant buyer's premium. This goes to cover grading, marketing and promotion, authentication, shipping and handling, money transaction fee's and more.

A retail owner of a sports card shop has overhead costs such as rent, utilities, marketing, etc built into their product prices.

So can somebody tell me why eBay buyers, and it seems collectors in general, FREAK OUT when a seller's shipping AND handling charge is enough to cover their overhead?

What overhead you ask?

Listing Fee
Final Value Fee
PayPal Transaction Fee
Card Storage Materials
Shipping Materials

On a $10 card that equates to over $6.00. Don't believe me? See for yourself.

Listing Fee- $.35c, Buy It Now, Good Til Cancelled
Final Value Fee- $3.00
PayPal Transaction Fee -about $.65c
Card Storage Materials- (One penny sleeve, top-loader and team bag) $.25c
Shipping Materials- (Bubble mailer, packing peanut to meet thickness requirement, label, printer ink) $.50c
Postage- $1.52

Do most sellers charge the their full overhead cost? Not even close. So why bitch about $3-$4 shipping and handling.

If a retailer is trying to make a specific % NET profit AFTER overhead costs why shouldn't an eBay seller not be allowed to do the same thing without suffering the wrath of the blogsphere and message boards.

As a collector, all we are doing when we gripe about an eBay seller's S/H charge is prohibit the listing of commons for set completion, low-end game used cards for player collectors, and hard to find inserts from years gone by.

I know both sides of the argument but I think it's time we realize that an eBay seller's fees are NO different than a buyer's premium or retail mark-up.

So what's all the fuss about . . . . ?


deal said...

The S&H charges are usually pretty easily marked and easy to figure out. Only once was a "bilked" into an extra charge - and it was nominal, because I didn't realize the package was from Canada.

One thing I would like bloggers to do is to include the total costs of items they have bought when reviewing. Many times I am pretty sure they are mentioning a card goes for X$ on Ebay when it is really X$ plus S&H.

Voluntarheel said...

I don't mind the shipping and handling within reason. At least it is obvious when you read the auction what the seller wants.

But I balk at taking it far enough to say that you should use it as a way to cover fees.

Those fees are built in to the cost of buying the card. If you need $20 out-the-door for your card, then list it at $23 with actual shipping cost. Then the buyer has the option of buying it.

I guarantee you will have better success selling doing that than you would putting shipping at $5. People hate feeling like they are getting jobbed on shipping.

That being said, check out what a recent seller said to me when declining an offer I made. I posted on my blog this morning.

stusigpi said...

Not my job to pay for the costs to sell an item because ebay is not structured in that way. If it was, different story. The seller,in most businesses, takes the risk to sell. Some businesses carry a risk of loss and selling on ebay is one of them

If the seller doesn't want to take the risk and incur the costs, then don't try to sell.

Rob- AKA "VOTC" said...

Whose to say it isn't structured that way. That sounds more like an opinion than a fact and that's my whole point

stusigpi said...

The fact, as you call it, is that eBay is not structured with a buyer's premium model. It is available on some types of auctions but the vast majority are not set up in that fashion. In addition I have been to many live auctions where buyer premiums are not added. The cost of the sale is paid by the seller. Its called commission. Try and justify it any way you like but trying to couch an extra fee into the shipping and handling cost is shady.

Doesn't eBay have a policy against charging excessive s and h? What's funny is when a crap seller tries to job a prospective buyer on shipping and then his item sells for less total than it would have if he would have had reasonable s and h charges.

I also like it when a-hole sellers attempt to hide their greed by labeling buyers as a-hole buyers.

Rob- AKA "VOTC" said...

Like I said, I just think we as buyers (MYSELF included) have become spoiled. You sound as if you are taking this whole argument personally and I certainly don't mind an honest debate but the last part of your comment seems uncalled for.

Most collectors are both buyers and sellers in some capacity and I just don't understand why ebay is the ONLY place in the free market where it is assumed that the cost of doing business isn't at least in part paid for by the buyer. (Much like retail markup, or buyers premium.)

All the MAJOR auction houses, including those outside of sports like Sothbys and Christy's charge a buyer's premium.

eBay policies actually state that it is acceptable to charge a reasonable "handling" fee and makes a clear distinction between handling and shipping. eBay does not expressly in any way define what can and can't be included in the handling fee. Kind of ambiguous don't you think, because what is obviously reasonable to one person (the seller) in most cases wouldn't be reasonable to another person (the buyer).

It's really not about greed at all it about getting NET for something above the cost of doing business like any other auction house or retail establishment.

The point you made earlier about simply upping the selling price to include the fees etc doesn't work because then your final value fee is higher.

What you call shady most people in the real business world would call good business.

However, so we are all on the same page here is the link to the Shipping and Handling Fees page

And we are both right to some degree LOL

Shipping and handling charges may include:

Actual Shipping cost: This is the actual cost paid to the carrier (i.e. postage) for shipping the item.

Handling Fee: Actual packaging material costs may be charged. A handling fee in addition to actual shipping cost may be charged if it is not excessive.

Fees related to Shipping & Handling: Gasoline, mileage, time spent at a carrier, time spent packaging the item, eBay and PayPal fees may not be added.

So the last part is pretty clear and at the same time is contrary to EVERY business model on the planet.

When you buy deadorant at Wal-Mart, all the equivelant fees (transportation, storage, acqusistion, financing) are all included in the RETAIL price we pay.

So the only entity doing business on eBay allowed to cover their operating costs is eBay.

CBoy said...

You guys may want to check out this new auction site dedicated to collectors.

They don't have any listing fees on their basic style auctions, and only 8% Final Value Fee on sold items Compared to ebays 15%.

Hopefully keeping sellers from boosting their prices just to cover the fees, hopefully allowing collectors to get what they want at the price they deserve!

stusigpi said...

I guess I don't get your point.

A seller can either choose to sell on ebay or not.

"All the MAJOR auction houses, including those outside of sports like Sothbys and Christy's charge a buyer's premium."

Ebay does or at least did have auctions where a buyers premium is charged on the winning bid. As I said Ebay just isn't structured that way for most of their auctions. I guess ebay feels that if you are going to sell your item then you should sell it or not. That's what reserve and minimum bids are all about. So many things just arent worth the opening bid, let alone the shipping and handling charge.

The Shipping and Handling charge is just that, shipping and handling not shippng, handling, ebay fees, paypal fees, etc.

The bottom line for a business is that they guess what products consumers want to buy and then what they will pay. Businesses get stuck with products they can't sell for retail all the time. Thus the seller takes a loss on the product.

My point is, the seller doesn't have a "right" to make a profit, but they have the right to sure as heck try. If the product they want to sell can't be sold for enough to cover all of the costs, that is the seller's fault, not the bidder. The bidder is is just trying to buy as cheap as they can.

The real issue here is that Ebay and Paypal fees are too dang high. I don't know how some sellers do it and is frankly not worth the hassel.

Again, it comes down to whether the seller wants to sell or not.

I wasn't taking this conversation personally, but I have been victimized by shill bidding and shenanigans way too many times. I have been hounded for positive feedback, charged outrageous shipping and handling fees, so I am bitter toward a couple of sellers.

Ebay may not be fair, but those are the rules.

Rob- AKA "VOTC" said...

Yeah but unfortunately like other eBay wanna be sites their just isn't a big enough audience and or selection.

That site currently has 16 baseball cards listed.

Rob- AKA "VOTC" said...

stusigpi we can definetly agree on one thing "The real issue here is that Ebay and Paypal fees are too dang high."

Ebay has successfully eliminated a means of getting rid of the ridiculous plethora of ho hum jersey and autograph cards from today's products that might sell for .99c to $3.00 if your lucky. After listing, final value and PayPal fees your NET isn't even worth the time.

Sorry about your eBay experiences.

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