I bought something on eBay yesterday. Not exactly an unusual occurrence, I buy lots on eBay, but this time I chose to make the purchase from a seller in Hong Kong.
The item wasn’t particularly expensive, but it’s light in weight. eBay’s Best Match search algorithm did it’s normal trick of surfacing the cheapest deals to the top but the top result had a postage cost of £2.50. I’m not particularly surprised at that bearing in mind Royal Mail’s recent postage increases. Business postage rates kicked in earlier this month and the consumer price tariff increases as of tomorrow.
The second search result gave me a slightly cheaper buy it now price but the postage was only 99p. That’s the one I purchased but (and it’s a big but) it’s shipping from Hong Kong!
How can it be cheaper to ship an item half way around the world than it is to ship it from the UK? If a realistic UK cost to deliver is 250% times the cost to deliver from within the UK something has to be wrong. The seller isn’t loading the item price either – it was a £1.99 item cost with 99p delivery charge so the total was only £2.98.
Shipping costs are going to start hurting UK sellers. It doesn’t matter if you offer free postage, incorporate some of the postage cost into the item price or simply charge the full amount of postage plus VAT that it actually costs you to deliver if your competitor in Hong Kong can ship at 20% of what the delivery will cost you.
Quite honestly I don’t know how it’s possible to pay for a jiffy bag, processing and delivering anything from Hong Kong for £2.98 and still make money but as a buyer that doesn’t bother me. What does worry me is how I’m going to be able to compete with those sorts of prices unless I myself relocate to Hong Kong.