Calculated, Flat Rate, Or Free Shipping? Which Should You Be Using On Ebay?

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Transcription:

Rob: What’s up, guys? On today’s episode, we are talking about shipping and more specifically how to make sure your eBay listing is filled out properly in the shipping department. 

Melissa: Yeah. This is a big obstacle for a lot of people, especially just getting started, knowing what you’re supposed to put for the shipping and what carrier you’re supposed to put for the shipping.

So that whole section we’re going to go through on what, when, and where you should use, the different carriers or the different [00:01:00] types of shipping. 

Rob: That’s right. And there are three types of shipping that you guys can choose from. You can do flat rate, you can do free shipping, or you can do calculated shipping.

We want to dive into each one of those and tell you, kind of the ins and the outs of each one of those and which one you should use in your eBay listing. 

Melissa: Yes. So let’s start with calculated shipping. What is calculated shipping? 

Rob: Calculating shipping is cool. This is where eBay came up with this years ago, where they will take the size of the box that you’re going to be shipping.

You have to know the dimension. So the box — either your item either has to be packaged in the size of the box that you can ship it in, or you have to know that your item will fit into that box so you have those dimensions. So you need the dimensions and the weight of the box to do calculated shipping.

Now when you have those eBay will take your zip code and they will give the buyer who’s interested in your item — before they even buy it, eBay will give them a quote on shipping from your zip code to their zip code. That’s why it’s called calculated shipping. So, but like I said, you have to have the proper sized box, not the size of the item, but the actual [00:02:00] size of the box that it will be shipped in. You have to have those three dimensions: length, width, and height of that, and the weight of that so eBay can calculate what it’s going to cost to ship from your zip code to the buyer’s zip code. 

Melissa: And one thing to know also on calculated shipping is that you can pass along your eBay discount to the buyer, which we’re going to get into the carriers in a little bit, but you can pass that on so that they see that you’re getting, they’re getting a good rate.

It’s not just the quoted rate, so.

Rob: If you do not know that much about what Melissa is talking about, the discount, eBay is a large company. So they get discounts from the different carriers UPS, FedEx and USPS. USPS, not as much, the postal service doesn’t give 

Melissa: Priority they do. 

Rob: Okay, on priority, they will. But for UPS and FedEx, they give big discounts for using their account to create your label.

So, and like Melissa said, you can pass on that discount to your buyer, so it is a lot cheaper for them to buy from you and then be able to get your shipping discount through eBay, to ship it to them. So they’re paying less on shipping. 

Melissa: And we’ll [00:03:00] dive into that a little more and just a little bit. So what exactly is free shipping free shipping?

Rob: Free shipping, just like it says, it’s where you are going to take the cost of the shipping and you’re going to pay for it, whether that’s in, implemented in through the item, you’re getting the item cheap. You have extra money on your profit that you can actually pay for free shipping, and you’re going to pay for the shipping for the buyer. EBay pushes people towards the free shipping. They want people to offer or sellers to offer free shipping because it is a lot more appealing to buyers when they do see the free shipping. So, but you have to know what it’s going to cost you on the shipping portion of that so you do not lose money.

So that’s one of those things that we don’t recommend people doing free shipping, unless you have a good understanding of shipping and how much something is going to cost you to ship somewhere in the country or even in the world. 

Melissa: Because you still have to have enough profit there to make it worth your time.

Rob: Exactly. 

Melissa: Yeah. And then what is flat rate shipping? 

Rob: Flat rate shipping is where you are just going to say, hey, this item that I’m selling, I know, or I have an idea that it’s going to cost me roughly [00:04:00] $25 to ship this, the furthest away from me. So for us, we’re down here in Florida, the furthest away up in Washington, California, somewhere up there, I know that I can get this box shipped from me all the way up to them for $25. Now, if it, if it is in a closer proximity, if it’s only going to go to Georgia or South Carolina from us, I know that I can still cover that in that $25, it’s going to cost me less, but I’m listing that out in the listing. Hey, this is a flat rate shipping. I’m going to charge $25.

So anywhere in the country that it goes, I’m covered. I’m able to do that. And I can put more money towards my packaging materials if I have to, or I’m going to end up paying $25 to get it shipped the furthest distance away. So flat rate is just where you’re giving the buyer: It says on listing, this is the price of, the price of the item is $99, right underneath that it says and you’re going to pay $25, a flat rate fee for shipping. So they know right ahead how much it’s going to cost. Exactly right off the bat, they’re going to pay $125 for that item to get it delivered to them. 

Melissa: Yeah. And if it is like a [00:05:00] larger amount and they’re really close, they might even message you and say, hey, I’m just right here. You know, I’m pretty close to you, you know, can I get a better deal on shipping? And that might happen. And that’s fine. So it won’t turn off people from your item as a flat rate, if you have it competitively priced. So when would you use each one? 

Rob: Okay. So when you’re starting out, we recommend people using calculated shipping because you’re not going to lose money on shipping.

When you have all the steps done, the item is either in a box, you know what size box it will fit in, so you have your dimensions, whatever 

Melissa: Don’t just measure the item.

Rob: No, don’t do that. No, that’s the other thing you can measure the item and have an idea. But you might not find that exact size box it will fit in. So you really need to have a box in mind that you know, so you can have those three dimensions. Don’t just, you know, say, okay, this is the size. I know I can get it in a box that size, because you might not find that exact size box. So you definitely have to know the box that is going to be shipped and you have to know those dimensions and the [00:06:00] weight.

So that’s how we recommend people who are not experienced in shipping, that’s how we recommend you guys starting out is with the calculated shipping. 

Melissa: One thing that’s nice about doing that is you prepackage them. So then once it sells, you can just slap a label on it and tape it up and slap a label on it and it’s gone.

But make sure, you know, like if you do seal it all the way up or write on the box what it is is so, you know, for sure so you don’t have to open it up, undo all the packaging, cause that would be a pain in the butt. 

Rob: So yes, absolutely. And the other cool thing about that is your handling time can be cut down.

You also have the option in your listings to select how many days of handling time you want. If you have the item packaged and it’s ready to ship, you can put your handling down to either same day or one day, which eBay likes the shorter handling time that you have. They’re going to show your item to more people.

So you can definitely do that. If you have to package your item, for us on our larger items that go pallet, I’ll go freight shipping on pallets, I have a five day handling time on it because they’re bigger items. I want to go through a weekend so I can have time to pallet the item up. So, and when you’re [00:07:00] packaging the item up before you ship it, and it’s all ready, it’s sitting on your shelf in your closet, in your garage, whatever it is, it’s ready to go.

When that you get that ding from eBay that you sold that item you walk out in the garage, you print the label, you can put it in the mail that day or the next day. You definitely can bring down on your handling time. 

Melissa: Yeah. So that’s nice. Just make sure you mark what it is so you know where it’s at. So, that’s when you would use calculated, when would you use free shipping? 

Rob: So free shipping, like I said, eBay wants people to use free shipping and that’s where, you know, you have a good understanding of how much it’s going to cost you to ship something, to the other end of the United States or wherever it’s going.

For eBay, we only do international shipping through eBay’s global hub, eBay’s global shipping program. So we know when we ship something, I think their hub’s in Kentucky, it’s got to go from Florida to Kentucky. 

Melissa: So it’s cheaper than going to California. 

Rob: Exactly. If I’m covering that my free shipping, I have to know that I can get it from us to Kentucky and know that I, if I do free shipping, that’s what has to come off my bottom line in the item. So the [00:08:00] profit has to be there for me to do that. So free shipping is tricky though, because you can lose money. If you’re not confident, or you don’t know what it’s going to cost you to ship the item. So, but that’s what eBay pushes people to. They want you to offer free shipping. So the better and better you get at shipping, the more items you ship, the better idea, you know what it’s going to cost you.

That’s when you can actually start doing free shipping on your listings. 

Melissa: And then what about flat rate? When would you use flat rate? 

Rob: Flat rate. Now I use these back and forth with our listings. I do free listings on freight shipping as well, or free shipping on freight listings as well. But we’ll flip back and forth and do flat rate or free shipping just to get a difference.

And maybe I’ll adjust the price of the item for the larger items that we do. So, flat rate is just where I’m going to say, you know, I’m selling this washer machine or this oven, whatever it is. I know it’s going to cost me a roughly $200 to get it shipped from me, to California. I’m going to say, okay, this is a $200 flat rate.

Now that’s all you’re paying. The appeal to the buyer is the buyer doesn’t have to email you and ask you a quote on that. So you’re giving them [00:09:00] okay, if I’m selling it for a thousand dollars, I’m charging $200 for shipping. They can click buy, and then they can pay and they’re done with it. They know exactly what it’s going to cost.

Now, if I underestimated on it, it’s on my shoulders. I have to eat that I’m on the shipping or cancel the transaction, which normally if I — I don’t underestimate. I know that if I have to ship something freight, if I do flat rate shipping, I have a good idea of what it’s going to take for me to get it to the furthest distance away from us.

Melissa: So that is a good point that you can, if you get to where your ship, like you’re losing money and you’re going to be paying out a crazy amount on shipping, you can cancel the transaction and you can tell the person, “I’m so sorry. You know, I, it was, I underestimated what it would cost to ship to you. I can’t ship it to you at that price.”

And sometimes they might be like, okay, well, I can pay this much more to get it to me if they really want it. Or you can cancel the transaction. You don’t want to make a habit of doing that cause eBay doesn’t like if you cancel them all the time, you’ll get dinged. But every once in a while, if you make a mistake, it’s fine.

You’re going to, you can cancel the transaction and just be polite to the customer. 

Rob: For sure. So that is the cool thing to [00:10:00] note is you’re not stuck, you guys. We don’t want people to lose money on shipping. If you do make a mistake, you learn from the mistakes, you always do. So you’re not going to make that same mistake again.

You’re going to learn from that. And the next item that you list, if you do cancel it, you’re going to relist the item and you’re going to have it done properly. So you do not make the same mistakes. So it’s a learning process, but the cool thing is you can learn and you can make mistakes. There’s nothing, you know, you can’t come back from it or you can’t fix it.

There’s always a way out if something does, does go wrong, you do have a way out. 

Melissa: Yeah. So we recommend a calculated shipping in the beginning when you’re first getting started. And then once you have an understanding of what things are going to cost, you can go back and forth between flat rate and free shipping, because we do that.

We do play with the numbers a little bit. Sometimes you might think people want to see that price and then free shipping. And then sometimes they might, maybe they want to see a lower cost of the item, but then there’s shipping attached to it. So we don’t, we go back and forth and we’ve had success with both. So on the kids store, we tend to add shipping and do flat rate shipping.

You do a little more free shipping. So we go back and forth though. And one, another tool that you can use is eBay shipping calculator. [00:11:00] So you can go in, if you want to do a flat rate and you can go calculate what it will be to go across the country, for you, and then just make sure you put that number in there.

Rob: So, absolutely eBay does have a, their shipping calculator that will show you what you’re going to pay with their discount. So if I was going to try and figure out what it’s going to cost me to ship from Florida to Washington. I can jump on a Google. I can get a Washington zip code.I can put that into eBay’s calculator.

My zip code, Washington zip code, the size of the box, the weight of the box. eBay is going to show me what it would cost me if I went to a package store like a UPS package store and dropped the item off, they’re going to give me the retail rate. And then they’re going to give me their discount rate of what it would cost with eBay’s discount when I go to print the label.

So, which is a really, really cool tool. 

Melissa: And we’ll put that link in the show notes too, the link to the eBay shipping calculator. Cause it’s pretty cool that you can go and use that. So those are the three different ways to ship. So then the next part that you have to fill out is what carrier are you going to use? So you have again, three different options, unless you’re doing freight.

You have UPS [00:12:00] FedEx and USPS, or the carriers, but then you have a couple of different options with each carrier. So, well, what do you pick? How do you list your item? What’s the best thing to put for your items? 

Rob: Yeah. And for us, since we do flat rate and we do free, I always go in there and I put FedEx ground, for our items that are larger.

If it is freight, I do flat rate freight. There’s an option at the bottom. And this is from the mobile device because mobile device is a little bit different than a laptop or computer. But the mobile device, I either select a flat rate or free shipping. And I use FedEx ground as the carrier that I choose that the buyer’s going to see, hey he’s gonna use this.

The cool thing about this is even if you do do FedEx ground, you do select that when you’re filling out the option, the buyer buys it, say it’s $10 cheaper to ship it with UPS ground. You can do that. You have the option when you create the label. After the item sells, you have the option to change it from a FedEx ground to UPS ground to USPS ground, whatever you want to do, USPS priority, [00:13:00] whatever you want to do, you have that option and you will get the different prices when you go to create those. So you’re not locked in. Even if you do fill it out with one of those options, you’re not locked into that.

The one thing you do want to remember though if you, do select, like parcel, select as your option of shipping for USPS parcel select it’s like a two to nine day handling time, to get from you to, to the buyer. If you do select that, a better option would be if you selected FedEx ground, and then when you went to print it, it was cheaper to go, which it usually isn’t, but you don’t want to go up in handling times.

FedEx ground typically is a one to five day. Parcel select is typically a two to nine day. You don’t want to change that because eBay is also giving them the price of the shipping and they’re giving them an expected date of the shipping. So if you have one to five days selected and then the buyer buys it and pays for it, and then you give them a two to nine day, it’s going to throw off what eBay’s telling them, how long they’re going to be.

They’re going to be upset about it, and you do not want to do that. So you do have the option to change it. [00:14:00] But if you’re going FedEx ground to UPS ground, typically it’s still a one to five day handling time so you’re perfectly okay. And if you can save the money on doing it, you can do that as well.

Melissa: Most buyers don’t care what carrier gets it to them, they care about the time. They don’t want it taking two weeks to get to them. They want it as quickly as possible, usually, but also cost-effective. So they care about the cost and the time they don’t really care about what carrier you’re using. So even if they select something, you can, you have that option.

You can put that in your description that it might not ship through the same carrier that is selected. You can like word it right in your description so that they can know that if they read it. 

Rob: But we, we reserve the right to change shipping carrier due to pricing and time-sensitive or something like that. You can definitely put that in your description. So they do know, hey, this is what it’s saying, but they could change it if they wanted to. Typically your buyer’s not going to be upset. On a lot of our stuff, for the right size box, I select FedEx ground. When I go to print the label a FedEx a [00:15:00] second day, which is in two day shipping versus a fivefive-day shipping, and a lot cheaper sometimes, well it’s cheaper, or it’s only like a dollar or two more it’s right in the same price range and they can get it so much quicker.

I change it to FedEx second day, which is an air shipping versus ground. They get it quicker, the buyer is super, super happy. So when you have money built into your profits, that you can do that. We definitely recommend doing that. And the only reason they’re doing that is because eBay on some of those second day, they’re giving you like 70% off of retail.

I don’t know why or how they do it, but they do do it occasionally. So you can do that. And multiple times I have shipped stuff instead of FedEx ground, I will ship it FedEx second day. So the buyer gets it and they get they’re super, super excited when they get it. Cause they get it quicker and way quicker than they expected.

And they’re happy about it. 

Melissa: Yeah, and one thing to note too, if you are doing calculated shipping, and you’re looking on your phone, I think you have to go into a different screen on the computer, but your listing on your phone, you do calculated shipping. You’re going to see the ranges of the different, the price ranges of what it’s going to cost.

Don’t let that determine what carrier you pick, because they’re not showing your discount at all to [00:16:00] your eBay discount. And the range is ridiculous. So it goes like it’s super low to super high, 

Rob: $15 to $95. 

Melissa: Pay attention to that as much, because you can switch it at the end too. But eBay does the biggest discount between, UPS, ground FedEx, ground, and a USBs priority. So that’s where you’re going to see the biggest discount if you list it with those. But like I said, you can change it after. 

Rob: Then that’s one thing you have to remember is you’re not locked in when you create that. And even if you did have a mistake, you can always cancel the transaction, communicate with your buyer.

Hey, I made a mistake. For some reason it came up is, you know, $20 for shipping. It’s gonna cost me $50 to ship it. I can’t do that. I’m going to lose money or, you know, I’m just going to have to refund you and cancel the transaction and relist it. So you can definitely do that. You have the option to get out of something if you get into a bind. 

Melissa: And other thing on shipping, we list in our description: also state that this price, the shipping price is for or free shipping or whatever it is for the [00:17:00] continental United States, the 48 states, because, it costs a lot more to ship to Hawaii and Alaska and yeah, and we, I shipped out pair of boots out just a couple of weeks ago and I was trying to figure out why I did not have the option for ground. It was, I thought it was going to Arkansas, but AK was not Arkansas. It was Alaska. So I had not put that in my description. And I still could, I could’ve canceled transaction, but I just did the extra. We still made a little bit of money and. I pay the extra for the air.

Rob: So we’ve done it both ways. So you can go in and do exclusions in your computer. You can do exclusions from Hawaii, or you can, Hawaii, Alaska, Puerto Rico, all those things. You can put those exclusions. So when buyers do see it in those territories or those places that they can not buy the item because you won’t ship it there, but even in your description, I mean, we always did a, this flat rate or free shipping is for the continental U.S.

That way, when they read the description, they see, okay, wait a minute. I’m not continental. And sometimes they’ll reach out and say, hey, can I pay extra, can you ship it to me? [00:18:00] I’ve had people in Puerto Rico do that to us as well. 

Melissa: And they know, they are expecting to pay more for shipping. They know where they live is not an easy access for shipping.

Rob: But a good note is we’ve done it both ways. So I’ve had people buy from Alaska and Hawaii and I’ve canceled the transaction and refunded their money because it’s too much to ship. And I’ve had people buy and then we’ve fulfilled it and charged them a little bit more money on it, telling them it’s going to cost a little bit more. Are you still interested in it?

Because we cannot ship ground. We have to ship air to you guys. So we’ve done it multiple ways. There’s not a wrong or right way to do it. But you do have options there too. You’re not just stuck with whatever happens. 

Melissa: Even one of our big shipments was going to be crazy, I remember, to ship, but then he was onan island, I don’t know if it was, he was off Hawaii, but he wanted it really bad.

He’s like, well, if you can ship it to California, I’ll get it picked up from California. 

Rob: Pick it up from California and ship it over on a boat. 

Melissa: Yeah. There’s ways around it. One thing I didn’t mention, or I didn’t go back and say, if you want your to pass your eBay discount on to the buyer, you can do that under your account and then under shipping [00:19:00] preferences.

So there’s a place to click which carriers you want. You can just click them all and pass on your, your eBay discount. You can also put in your own discount, but we don’t do that. We just pass on that eBay discount to them, cause then it will calculate for you, whether it goes, you know, you never know what the discount might be, so it could be higher or lower depending on the carrier and whatnot.

Rob: And you can also put the option for, handling fees. So if you’re buying boxes, if you had to buy a box to package your item and packaging, peanuts, bubbles, whatever it is. And you estimated it costing you three or $4 for that, packaging materials. You can always click on the button to add handling fees.

And then you can add whatever you want for that item. You can add $4, you can add $2, you can add $10, whatever you want. eBay will charge that on top of the shipping to the buyer. So the buyer is actually paying for that. 

Melissa: We don’t do that because we just build that into our price. Yeah. And then buyer could get to where they’re like, oh, it costs on top of it and they might not like them. They might just rather see the flat cost or built into the [00:20:00] price. So, yeah, but it is an option. You do have the option. 

Rob: Cool. 

Melissa: Alright, that’s it. Thank you guys. 

Rob: Alright, guys hopefully this has helped you. Hopefully guys, you have enjoyed this episode, so we will talk to you guyson the next one. 

Melissa: Get those items listed with your shipping. You got this.

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Robert Stephenson

I grew up in Central Florida and have lived here my whole life. I first got into buying and selling items when I was 16 years old, and have been hooked ever since. It has mostly been a hobby that makes some extra cash, but sometimes it serves as my main income as well. I don't plan on stopping any time soon. I find too many fun toys for my family (or myself), and just love the whole process.

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