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Sunday, July 20, 2008

SOUND OFF: SHIPPING MARK-UPS

Recently I was asked if I thought that sellers who add a 100-percent markup on actual shipping costs to items sold in online auctions on eBay or similar sites were being ethical. I've decided to pass the question along to you.

As long as the shipping cost is made known to the buyer, is it wrong for online-auction sellers to charge customers more than it actually costs to ship the items? If you don't think a markup is wrong, is there a limit to how much the markup can be before it crosses into unethical territory?

Post your thoughts here by clicking on "comments" or "post a comment" below. Please include your name, hometown, and state, province, or country. Readers' comments may appear in an upcoming column. Or e-mail your comments to me at rightthing@nytimes.com.

You can also respond to the poll about this question that will appear on the right-hand side of the blog until polling is closed.

Jeffrey L. Seglin, author of The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business (Smith Kerr, 2006), is an associate professor at Emerson College in Boston, where he teaches writing and ethics. He is also the administrator of The Right Thing, a Web log focused on ethical issues.

Do you have ethical questions that you need answered? Send them to rightthing@nytimes.com or to "The Right Thing," The New York Times Syndicate, 500 Seventh Avenue, 8th floor, New York, NY 10018. Please remember to tell me who you are, where you're from, as well as where you read the column.

c.2008 The New York Times Syndicate (Distributed by The New York Times Syndicate)

9 comments:

Eric McNulty said...

Shipping charges are a profit center for virtually every cataloger or retailer -- on-line or off. As long as the costs are clearly stated, there is no issue.

Also, many things can go into the shipping cost: packing, schlepping to the shipping office, etc. and the cost of freight alone doesn't capture those.

yawningdog said...

Many sellers start their stuff at a low price with the hopes of it going out and assure themselves of a profit, no matter what the selling price, by setting a high shipping cost. Personally, I try to start my price where I make my money back and only charge what the post office requires.

I alway check shipping prices before bidding. I don't care how the seller makes his money - in the bid price or in the shipping cost - as long as I know my final cost.

Anonymous said...

Regarding your question about "shipping costs," as long as the actual cost is revealed beforehand and the buyer knows the exact dollar amount, I don't see a problem. But when a buyer orders a $25 item using a credit card and discovers it has been debited for another $25 for "shipping & handling," my eyebrows go up.

Personally, I've never had a problem with outrageous shipping and handling costs in the past so don't know how much of a problem it really is. I know that when I send items to my son I have to go out and buy a box, pack whatever it is I'm sending, then make a trip to the Post Office or UPS to ship it off. Much more is involved than just the cost of postage.


Burl Estes
Mission Viejo, CA

Anonymous said...

I read your column in the O.C. Register, in Huntington Beach, CA. Your topic today is very important to me. I am 68 years old, and I sell on ebay to supplement my income. I sell needlework items, so most of my “customers” are older or on a fixed income. I firmly believe that “shipping” costs should reflect ONLY that – the cost of shipping. Not man-hours, not supplies, but postage rates only. I see where some people add “handling fee” to their listing and I will immediately delete that seller when I see that. The $ that it cost to package up an item is the cost of doing business. After all, when selling from home on ebay there is no extra-overhead. I have no additional rent – no employees – and so I MUST have some cost of doing business and the boxes/wrapping/tape/etc is all part of that expense. I have a rule that if I quote postage at one price and it is substantially lower, I will refund the postage to the customer. And I have done this several times. I have a feedback of almost 1200, with -0- complaints about shipping.

My son sells on ebay professionally and he has 5 employees working for him, rents a store to hold his merchandise, and yet he charges only actual shipping fees with less then $1.00 added for his cost. For him, that is a major expense and needs to be reflected. If the shipping on an item for me is $1.91, I will charge $2.00 shipping. For him, if it is $1.91 he will charge $2.50. I fully understand that, and I think that is reasonable. But those who charge $1.00 for a scarf and then $8.95 for shipping ought to be thrown off ebay! When I have inadvertently put in the wrong shipping amount on ebay and it is over what is expected, before listing the item ebay will put up a red-flag saying that postage looks too high for that item. I’m glad they do, because sometimes I mean to put $1.50 and it comes out $5.10.

Too much information, I’m sure – but I do feel strongly about it.

Thanks for letting me “vent”.

Nancy Ludt

Anonymous said...

Is there a spot on Ebay where the rules are clearly stated? Can all buyers and sellers print these off and keep them handy? Is there a suggestion box or complaint location where you can go to lodge your concerns? If no to any of these questions-why even log on to Ebay? Sounds to me like it is getting too big for its own good.

Tustin Guy said...

I'm a seller and buyer on ebay. I don't charge much more than what it costs me to ship (maybe 50 cents to $1) and I avoid the sellers with super-big shipping fees.

However, considering how much ebay takes in fees on sales (that's painful in itself), I can understand how a seller would want to create some sort of profit with extra shipping costs - or at least recover their packing and "gas" expenses. I've given up selling low-cost items because of the outrageous fees from ebay. I can't make any money worth my time.

But when a seller clearly gives me the shipping cost up front, they're not deceiving me. It's up to me to decide whether to buy or not. (And often I don't - unless the sales price is so cheap that I can include the shipping costs and still "get a deal.")

Guy


Tustin, CA. Orange County Register

Anonymous said...

Often people forget the “Handling” part of “Shipping and Handling.” Packing items for shipping can be time consuming and can require materials that cost money: boxes, padding, tape, labels, etc. Small businesses (or individuals selling on the internet) must often make trips to a stationery store and to the post office, fill out shipping forms, or perform other tasks. “Handling” is often more costly than the customer realizes and is usually justified.

On the other hand, I used to belong to a CD “club.” Many of the selections were offered at great discounts over the normal retail price. The club’s shipping and handling policy, however, was to charge approximately $4.50 for each CD. That included boxed CDs or other multiple CD packages. There are some 2 CD sets, for instance, that are packaged in a jewel box which is exactly the same size and only a fraction of an ounce heavier than a single CD, yet this company charges $9.00 to ship this item. It takes absolutely no more packaging material or effort and requires no additional shipping cost, yet they apply this extra charge. This is crossing the line and is an unfair and unethical practice. Imagine my surprise when I made a large order (thinking that the charge applied to each selection, not each disc) and received a much larger invoice than I had expected.

Tom Van Huss
Tustin, CA
Orange County Register

Anonymous said...

I do not buy from people who charge me for shipping and handling.

Shipping: a legitimate business gets tax breaks for shipping as part of the cost of doing business. Hence, charging a customer for shipping is not just unethical; it is crooked. I don't do business with crooks.

Handling charges: this is worse. How does anybody do business without handling the goods they sell? Would anyone pay if there were handling charges for over the counter trade at a drugstore/bank/post office/?

Again, handling charges are not just unethical; they are crooked. Again I say, I don't do business with crooks.

As for your "As long as the shipping cost is made known---", just because crooks let you know they are dealing with you crookedly, does not legitimize their crookedness. This is like that would-be rapist telling Edith Bunker that since she couldn't stop the rape, she should just lie back and let it happen. Most modern businesses are like that rapist-with-a-fake-conscience.

Unethical commercials like the Pizza Hut and Ikea ones are not isolated examples. As I said up there, most modern businesses are like that

Take care.

Azra Daniel Francis.
Windsor, Ontario, Canada.
The Windsor Star, Saturday 26 July 2008.

Anonymous said...

That last comment was totally over the top -- someone charging $4 postage when the actual cost of the stamps is $2.75 is like Edith Bunker's rapist? Wow -- talk about a leap in (il)logic.

I'm surprised by the passion in most of these letters, and I agree with the people who posted earlier. Let the seller charge what he/she wants for postage and let the marketplace do the rest. As a buyer, I weigh the cost of the postage with the price of the item. It's not complicated. As a seller, I pad the shipping charge 75 cents to $2 to cover the cost of the padded envelope, packing tape, and chance that I miscalculated the postage, since I'm making educated guesses half the time. It's not a big deal, and buyers who have bought from me have felt fairly dealt with.