Posted by Alex Jackson on 5th May 2017
Have you shipped a package to the east or west coast recently only to find out that the shipping is more than the sale price of the item? Yes it happens all the time now rates keep climbing year after year and in particular with the US postal service. We previously covered some of the many reasons in our article about the revenue assurance program it’s really not a single problem but a multitude of issues combining to drain revenue from the postal service. Loss of revenue from first class mail decline, the high cost of 6 day a week deliveries and imports from countries like China which ship for pennies on the dollar subsidized by you the US consumer. It’s no secret that marketplaces like eBay, Amazon, Etsy and others are well aware of the situation and how detrimental it is to their businesses. Both eBay and Amazon have been very vocal about how some of these factors are negatively affecting their marketplace sellers in fact just this week eBay is celebrating its 12th annual eBay advocacy day an event where eBay flies in 20 sellers to meet with their congressman and a representative from the executive branch to discuss some of the concerns of the eBay small business merchant. While this is commendable it really does amount to a dog and pony show 20 sellers griping to their congressman are not going to fix this and unfortunately this cannot be resolved without government intervention. Maybe there is a quick fix… If not a complete fix how about a life preserver? Believe it or not there is one but the bad news is it’s not happening and likely will never happen. Well what is it? Simple stop marking up our shipping costs! When you buy a label from sites like Amazon, eBay or Etsy do you really think that cost is what the site paid USPS for that shipment? Of course not they have a massive amount of leverage with USPS and the motto in online these days is make a profit on everything from warehousing to listing, selling and purchasing postage a nickel here and there adds up quickly. Well why wouldn’t they pass on these savings if not in full then partially to keep their volume up? Not happening because of wall street and shareholders again this is another revenue stream that they have gotten very used to no one knows except the post office just how good their rates are and they are quite content keeping those extra dollars to keep their profits up as well as the share price. Is it a bit hypocritical of these websites championing the little guy while squeezing him for a few extra dollars on shipping fees yes absolutely particularly galling is when they push you to offer free shipping are they giving you a better rate when offering free shipping? of course not, again that would be cutting into their bottom line. What’s the solution? Nothing is going to happen without the government getting involved and the only way this will happen is if sellers and marketplaces combine forces to push for change. Online retail is still relatively new, remember Amazon, eBay and internet retail in general are just over two decades old and if nothing is done to address these issues it could have serious detrimental effects on millions of small business owners as well as consumers.