Will Increased Postal Rates Hurt eBay?

I know literally hundreds of people that earn their living, either part time or full time selling on eBay (EBAY), which trades on NASDAQ. The postal increase that went into effect on May 14 has been a nightmare for eBay sellers.

These are some of the comments I am hearing:

"I've held off for a couple weeks posting any eBay items until I can get a handle on the new postal rates so I can enter them in my listings."

"I went into the post office [prior to May 14] to get a copy of their rates and they said they didn't have any to give me."

"They have raised the limit on insured mail to $200 in order to have return receipt service."

"I do a lot of mailouts, and now the postage amount can change by the size and thickness of the envelope."

"For sending boxes, they're now charging by zone. I used to be able slap on the same postage on every package of the same product, since I knew the weight, now I have to look up the zone."

Regarding my own personal experience, a couple days prior to May 14, I scoured the USPS web site for the new rates, but could not find them. But, I did find the press release which gave out a limited amount of examples of what rates would be.

Today, I went to the post office to mail a DVD and I told the clerk that I wanted to send it the least expensive way. She narrowed it down to four choices: letter rate, large envelope, package, or media mail. Media was immediately ruled out because it is so expensive. It think it is only useful for heavy books that weigh over a pound. She then said it was too large for letter rate, and too thick [slightly over a quarter inch] for the large envelope rate, so I had to send it by the more expensive option - package rate. When I got back to my office, I checked the Post Office's website, and realized that I was probably overcharged. It seems to me that it would easily qualify for the large envelope rate, and maybe even the letter rate.

However, there are some quirks. If it doesn't bend easily, like a photograph with cardboard, it is charged a "non-machinable surcharge" [sorry autograph dealers]. If it has clasps, it is also subject to a surcharge. If is has an address parallel to the shorter dimension of the letter or it contains a pen, it is subject to a surcharge. If this seems confusing and feels like a hassle to you, then you can imagine how the eBay sellers feel.

I think there will be a short term revenue drop for several reasons:

1. Sellers have been holding off on listings until they get their new postal rates entered.
2. Buyers may be temporarily scarred off by the sticker shock of the higher postage rates that they have to pay for the stuff they buy.
3. Buyers may bid slightly less because they are factoring in the postal rates on their entire purchase.
4. Sellers may hold off selling until they get the size and shape of their boxes and/or envelopes optimized for their products.

In the next couple days, I will be publishing an article about several ways of dealing with the higher postage rates.

Disclosure: The author owns EBAY.

EBAY 1-yr chart

Comments

[suzieeads]

I am very ticked at the new postal rates. I am an ebay seller with over 10K feedback. This has really hurt my business. I hope the PM General shows up at eBay live this year! I'd love to tell him what I think of DIM shipping.

[stocker blog]

I hear the same thing from many other eBay sellers. But this may not be the worst thing; there may be an even bigger problem on the horizon, based on what the government is considering. I plan on writing an article about it in the next couple days.

[Fruity]

I'll tell you what's wrong. They weren't prepared with the paypal interface. Those bozos are too self-absorbed that they didn't even design the Paypal shipping interface to accept USPS provided packaging. First off when the rates when into effect, you couldn't ship anything priority unless it was a flat rate box. 11 damn hours & not one time did they put it up there on the system announcements. Everyone was asking for support. NOTHING. And then when they "fixed it" they know have it so you have to manually enter in the dimensional weight on every priority box you sent. Completely ignoring the fact that if they had a checkbox that says "I'm using USPS branded boxes" then you are not required to enter it in. Not even a pull down box with set measurements. Do you know how many boxes I ship in a week? Over a 100. The postal service doesn't require me to measure those packages but ignorants over at Ebays Shipping team were up against a deadline so they couldn't get it there. YUP THATS WHAT THEY SAID. So I switched to Endicia & the rest I show up at the post office & make them process it. I'm not getting carpal tunnel over this because they were too lazy to do anything. So now all the sellers using paypal are basically held hostage having to do this repetitious unnecessary task because the shipping team didn't think it was a big priority

And I can't list because of their new Sell your inventory form. Its designed for the clueless who will accept all those prefilled money sucking features that no one really uses. 7 years I've sold on that site fulltime. Nobody in the financial world believes ebay has a problem. That's because you're not in the front lines directly impacted by their retarded marketing driven brand-this managmeent team. Since May 1st they've done 12 major changes that impact finding items, selling items and most importantly shipping them. Do you want to know how many search changes they did last month? 15!!!

[stocker blog]

I know eBay may have partial blame but from what other ebayers have been telling me, the Post Office wouldn't even release postal rates to anyone prior to the date of the postal increase, other than nominal info on their news releeases. Prior to the rate change day, I gave up after 20 minutes on the USPS web site trying the find rate info, by I have a friend who spent a total of 20 hours on the phone to his local post office and Washington trying to find out what the exact rates were and to get clarification about packaging, but with no success.
There may be an even bigger problem looming for eBay, which won't be theis fault at all [unless they don't lobby against it.] I will be writing about it shortly.