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Why people hate to pay for shipping and handling


When I first started selling on eBay, I was surprised to find out how incredibly complicated shipping and handling is. And it turns out to be something that fascinates people, and they hate paying for it.

It really took me by surprise, but it's true, people hate paying for shipping and handling. It's a human nature kind of thing that's hard to explain. I know that the very same people who would generously pay for the next round, would feel themselves cheated if they paid a penny more than the price stamped on a box for handing. And the funny thing about it, is that I tend to agree. I love free shipping.

When you price something to be sold and shipped, you have to consider the fact that it will cost time and money to get it to your customer. It will cost you time in preparing it, putting it in a box, wrapping it carefully, maybe even going to the Post Office and standing in line. That's the vague "handling" of the term "shipping and handling". And really, if your time is worth more than minimum wage, it's a tough thing to price. Putting things in boxes and taking it to the Post Office may be a labor of love, but it takes time. Even if you get the boxes for free (and often you have to pay for boxes in order for the shipment to be safely shipped), the time it takes is something that very few people even think about. Certainly your customer doesn't care about that, and sees no reason to be charged for it. And they're right.

Most customers know exactly, to the penny, how much it costs to mail something, or ship it UPS, or FedEx. This is public information. So if the box says that the postage was $1.99, and they paid eight dollars shipping and handling, they will feel cheated. Even if it cost you two dollars for the box, and it took you an hour to prepare it, and stand in line at the Post Office. "Handling" is something that's better classified as "cost of business", like having electricity, or internet service, or your computer. Your customer doesn't expect to pay for your cost of business.

So I very quickly switched over to free shipping, which people love. Of course, you have to raise your prices to cover shipping and handling, and if you're selling something for 99 cents that costs three dollars to ship, you may find that most people will not purchase a 99 cent item for four dollars. Once you get to those small prices, it makes more sense to sell them at a garage sale, or a swap mart.

So, in order to keep people from feeling ripped off, you need to do some math. You need to calculate what it costs to manufacture your product, and about what it costs to ship it. You would be wise to only offer free shipping in the country where you live, and most people understand that.

Welcome to the world of selling things mail order! This isn't new, it's how Sears began, and made their fortune, with catalogs. People would look at pictures of things, order them, and wait for them to arrive. If you do it right, you can make a reasonable profit. If you do it wrong, you'll lose money, and probably customers.