A number of buyers have been concerned with the pricing policy of this store. Please read the following document as this should explain this in greater detail.

Thank you.

August 2008

Costs Included In Shipping And Handling Charges

Direct Costs

• Common Carrier Costs
• Determined by USPS, FedEx, UPS
• Depends upon certain criteria
• Mode of shipping, size, weight.
• Land Delivery Costs
• Determined by USPS, FedEx, UPS
• Depends upon certain criteria
• Mode of shipping, size, weight.
• Express Delivery Costs
• Determined by USPS, FedEx, UPS
• Depends upon certain criteria
• Mode of shipping, size, weight.
• Extra Heavy Package Costs
• Determined by USPS, FedEx, UPS
• Depends upon certain criteria
• Mode of shipping, size, weight.
• Packaging Materials
• Cost of bulk material divided by the number of uses.
• Includes envelopes, packaging, boxes, bubble wrap, tape, labels, invoice/receipt paper.
• Direct labor cost
• The amount of time physically preparing inventory.
• Processing sales and shipping.
• Other Special Handling
• Preparation for shipping other than normal costs.
• Including but not limited to; musical instruments, bulky and heavy shipments.
• Intermediate Transportation Cost
• The normal use of local vehicle
• Including but not limited to gasoline, maintenance, insurance.

Semi-Direct Costs

• Warehousing
• Cost of storage and shelving inventory in queue for shipping or waiting for customer purchase.
• Insurance or self insure cost for assured delivery
• Loss, damage, pilferage, shrinkage, spoilage.
• Self insurance is based upon an aggregated consumer savings at point of sales vs cost of refund and/or right-offs.
• Rent
• Including but not limited to, building, out buildings, utilities, water, and electricity.
• Returns Processing
• Write-offs, refunds.
• Outsourcing
• Sales, referrals and marketing
• eBay
• Flooring, marketing, referrals, logistics and inventory control.
• PayPal
• Accounting, accounts receivable, accounts payable and eBay business transaction banking.
• Overhead Costs, Conservatively Allocated
• Replacement of equipment
• Useful life of hard drives, computers, printers, printer cartridges, other office equipment.

Indirect Costs

• General & Administrative Expenses
• Inventory Carrying Costs
• Item Replacement Costs
• Aggressive Fixed Overhead Allocation

Fair Handling Costs

What is noticeable is the fair cost of handling; the higher the item is priced for like items the handling cost remains the same. You can see where an item may sell for $1.00 will appear to have a higher handling cost than a like item selling for $20.00. Like items will more than likely have the same shipping and handling costs associated with it.

Like items may have different weights and the shipping cost will vary and the handling cost will remain compatible with the lower weight items.

Disclosing handling costs at point of sale in an eBay environment are more helpful in disclosing the actual cost of an item than incorporating the cost of handling in the market price.

As a consumer, you have the right to know what you are receiving for your money. As a seller, I have an obligation to treat you fairly.

Fair Market Costs Value and Hidden

Take an item such as a widget that has a market price of $29.95 and the seller offers free shipping with no handling cost. Let’s say the widget weighs three pounds and will be shipped Priority Mail to Los Angeles California. The cost of that postage is approximately $9.55. Let’s say that the widget was purchased by the seller for $5.00 and has marked it up to $10.00. It is likely that the hidden handling cost for this widget is $10.40.

Take that same widget and offer it for $9.95 customer pays shipping of $9.55 and handling $3.50, the total cost to the customer is $23.00. I still made my $5.00 mark-up and recuperated my handling costs of $3.50 and you the customer saved $6.95 by knowing the actual costs of the widget, shipping and handling.

Is there deception?

When you have unscrupulous people using unethical business practices; yes. Charging a customer an unreasonable handling cost unfortunately does happen. That being said; if I was to sell you that same widget for $29.95 as mentioned above, and did not disclose I was charging you $10.45 handling – where is the deception? You will assume I bought the item at a fair market wholesale price to resell to you at a fair market retail price.

Different widgets have different prices and they more than likely will sell from a couple of cents to hundreds of dollars and they will test the market. The market is a level playing field and a person that is ethical and using honest business practices will eventually fair out. Within that market, deceptive sellers only deceives themselves and will also be judged by that same market.

So; before you criticize a seller for asking too much in handling costs, look at the figures and let the market decide.

Fluctuating Costs

Costs may fluctuate from time to time depending upon the influences of volatile markets, costs of transportation, insurance, real-estate, and cost of living increases to name a few. These fluctuations will normally be reflected in minor changes either up or down in the cost of handling.

Retail Outlet Comparison:

More than likely, the retail store had to consider the same costs you have to consider when purchasing product from a wholesaler. These costs; in order to stay in business, need to be passed onto the consumer. In other words; the retailer can not be expected to buy a product from a wholesaler for let’s say $10.00 not including freight costs, and resell it for $10.00 and absorb the cost of freight and remain in business.

The cost of an item at point of sale takes into account all the same handling expenditures with the exception of shipping freight and/or mailing costs. However; these costs may be included if the retail store offers the customer free delivery – if not, the retail store will/may charge an additional cost for the delivery.

To realize a return on inventory, a retail outlet may carry an inventory worth hundreds of thousands of dollars, and therefore would most likely extend to the consumer a reduction of cost or a greater savings at the point of sale based upon bulk purchases and volume sales.

An eBay Seller Perspective

There is some frustration when a buyer is offended when a cost is expected to be passed on to them. I will take the example of this widget: I might have a price of let’s say $5.95 and the buyer is willing to buy it for the asking price or wants the price discounted. Let’s say the widget can be shipped Media Mail for $2.23, however, this buyer does not expect to pay my $3.50 costs in listing, selling and shipping the widget to them. This means I am actually selling the widget for $2.45. It so happens I purchased this widget for $3.95 and because of this I am actually compensating the buyer $1.50 for the privilege of taking it off my hands. This is up-side-down marketing; I would be further ahead running an ad in a local newspaper telling people I will give them $1.50 plus the widget if they will pay shipping.

Summary

Thank you for taking the time to read this document. I hope this give you a better understanding about what goes on behind the scenes of my store. I also hope this somewhat explains this mysterious charge called “Shipping and Handling”.

Thank you for your time.

July 2007

Message to the Ebay Community

Someone has used my Ebay Account to send unauthorized communications to a number of Ebay Subscribers. As of todate: these communications were in the month of July 2007.

Please accept my oppology for any inconvenience this has created.

Upon discovery, I brought this to the attention to the Ebay Security Team. I hope this problem has been resolved.