eBay UK sets maximum P&P for media, phone categories

No primary category set

As promised at Small Business 2.0 on Saturday, eBay UK has announced that from January, some selected categories will have a maximum set for what sellers can charge for postage.

As of 27th January, all sellers listing on eBay UK will have to specify at least one UK shipping rate (previously, only new sellers had been made to do this). In addition, sellers in some categories – in essence, media categories and telephones – will have to set a UK shipping rate at or below a given maximum for their category.

The affected categories are Books, Comics and Magazines, DVD, Film & TV, Music, Video Games and Mobile and Home Phones. The actual maximum fees set vary from £1 for a SIM card up to £14 for a video games console. Listings in the DVD category must offer free shipping.

The maximums set relate only to the first domestic shipping rate: sellers will still be able to charge more for expedited or overseas shipping. However, overseas sellers listing on eBay UK will be subject to the same rules, and will need to set at least one UK shipping rate at or below the stated maximum.

Exemptions for bulky items

There are some exemptions to the policy. For pretty obvious reasons, postage costs are not required for listings in the Cars, Parts and Vehicles, Businesses for Sale, Residential Property, Containers& Pre-Fab Buildings and Local Services categories.

In the categories with maximum rates set, sellers of specially large items will be able to select the delivery option “Courier : Heavy and bulky items”, and input their own price. eBay say that they will be monitoring the use of this option: sellers shouldn’t expect that they can use it on items which are not obviously abnormally large for the category in which they’re listed.

Of course, some items are going to fall between these two stools: TameBay commenters have already come up with a range of different items that might cost more to post than the allowed maximums, and some categories – textbooks @ £2.75 and film and TV memorabilia @ £4.00 for example – seem to have been set extremely low. eBay’s advice in these circumstances is to include the cost of the shipping in your item price. This suggestion might have been more palatable if eBay’s FVFs had been reduced in the affected categories, but for now, sellers will have to take comfort in the fact that their competitors are in the same boat as them, and there’s likely to be a change in pricing in all the affected categories.

What about my category?

Sellers in other categories should expect this policy to be extended across the whole site in the not so distant future. eBay’s FAQs page says that our goal over time is to bring reasonable P&P cost limits to more categories; though they go on to say we currently do not have other categories scheduled, it seems a pretty safe bet that we’ll see this in many more categories before the end of 2009.

What’s in it for the seller?

There is no doubt that eBay are working towards free postage across the site. Many eBay sites have seen promotions for sellers offering free shipping in recent months, and we can expect more of this in the run up to the holidays. Brian Burke said last week that beginning this week, “buyers will be reminded that the seller offered Free Shipping on the transaction as they are leaving Feedback for the seller.” As the DSR rating for P&P is here to stay, I hope that this will be worded in such a way that sellers who do offer free shipping will be marked 5/5 by their buyers. Though I know every seller’s unique, certainly when I began offering free postage on two of my IDs, my P&P DSRs increased from 4.8 to 4.9 and more importantly, my sell-through rate increased about 30%; my buyers definitely like it. And a 2006 survey from Yahoo! Small Business agrees with me: 90% of those surveyed said that free shipping would encourage them to purchase. It’s always worth looking again at your pricing strategy to see if free P&P could be an option for you.

The danger is that sellers will see the set maximums as “what they should be charging”: rather than everyone trying to keep costs down for their buyers, this could even push everyone up to the same fixed P&P price. Buying a Parcelforce courier delivery through PayPal, for example, costs £10.99, but it’d be a fairly safe bet that the £14 limit on video console shipping will become the norm in that category.

And in categories where the maximum is at or below actual cost, we’ll surely see the end of combined shipping deals. Many of the affected categories – DVDs, music, books – are those where buying more than one item “to get a good deal on postage” has become an ingrained habit with buyers; it would be a shame to discourage such spendy behaviour.

The canny seller will, I think, still ensure they’re undercutting the competition on postage, and that job will be made so much easier by knowing the target P&P price for your category. The policy rolls out at the end of January 2009, but now is the time to stay one pace ahead of your competition and ensure you have the most competitive shipping pricing possible.

9 Responses

  1. Obvious reason why Ebay/PP are looking to stop postage is that certain, mostly low priced items that only have a small margin potential after Ebay/PP take their big slice set attractive, BIN’s and then look to recover a small margin by a higher postage charge that helps to minimise listing charges and PP take.
    They dress it up as though it is for the good of buyers-typical half truth as usual

  2. It rather depends how eBay decides to market the change to buyers. Is there going to be the same overboard emphasis on category maximums that we saw over the no negatives and neutrals for buyers change. If so we could have a situation where a seller is marked down on DSRs for charging the maximum, even though they are making a loss on it. Adding the extra to the item price isn’t so easy for auctions, and I think they could be the real losers.

    I have a box of military books that I hope to sell. I picked 3 out at random. They are almost all hardbacks but these were by no means the largest. Weighed without any packaging 2 would cost £2.51 each to post, leaving 24p for packaging which would need to be substantial. The third would cost £3.08 for postage alone. That’s for 1st class postage. I wouldn’t use 2nd class as being a very low volume seller I’m too vulnerable to sanctions if a buyer took exception to the extra delivery time. If I don’t get rid of them before Christmas I think they’ll be going to recycling,

  3. Chris #3 – my guess would be that shows that eBay have taken category averages into account, and that booksellers trim their P&P a lot closer to actual costs than memory sellers do.

    Or just maybe that £2.75 would be what you’d be charged on Amazon? 😯

  4. Sue – It is what you would get on Amazon. But, as I understand it, you get it for each book, regardless of weight. So there would at least be a chance, that over time, it would even itself out.

  5. I think it would have been less controversial if, like Amazon, eBay had introduced a set flat rate for certain categories.

    Thinking about books in particular, which vary in weight quite considerably, If I buy from Amazon marketplace, I don’t feel aggrieved if the seller’s postage shown on the envelope is dramatically lower than I have paid, I know that it is Amazon that set the price and that is that. In fact I don’t even think about it.
    However, eBay buyers are encouraged to think about how much they have paid for P&P when filling in the DSR ratings.

    IMHO the new eBay rulings could mean that if a seller wants to set the maximum allowed postage price on all his items, so that he can balance out his more expensive postage with cheaper items, the buyer of the cheaper item could feel cheated and could mark down on postage DSRs as being unreasonable.

    So eBay could still have the same problem they are so assiduously trying to remedy.

  6. I think eBay need to get away from the bogus misleading wording of FREE..it should be postage INCLUDED

  7. would it have been so difficult to actually weigh some items?

    some of the limits are ridiculous compared to others.

  8. Why does everybody not get announcements at the same time? Obviously I can see the details through the links on this site. On the eBay forums several people had also posted links. On some of them I could see the new announcements, but on some I couldn’t. Logging into my eBay the latest announcement was last week about the redundancies. This morning the titles are there for the announcements, but when I click on them I just go to the redundancy announcement. No doubt at some point today the full text will appear. Is there some way other than my eBay to get into announcements, or are they sent to powersellers first? It seems to happen every time there is an announcement.

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