Re: Unreasonable eBay shipping? No! Here's why. Message #9 Posted by Howard Owen on 20 Sept 2005, 2:56 a.m., in response to message #8 by blurdybloop
I try to puzzle through ethical matters with a functional sense of right and wrong, instead of a strictly legalistic one. I try to figure out why something is unethical. I use other people's opinions of ethical matters as guideposts, not as holy writ. For me, it usually comes down to actual or potential harm coming to someone who is powerless to stop it from happening. So that's why sexual harrassment at work is immoral, for example. That's why "Thou Shalt Not Kill" as a practical matter is sensible ethics, and the "Shalt Not Covets" too. The latter lead to strain in unequal power arrangements. When those were read to me in my youth, (I'm using examples from my cultural tradition here, I hope it translates OK,) they left me cold, as did most of the proscriptions I was taught. It took some painful bumps and scrapes for me to realize that there was practical sense in all the shalts and shoulds.
For example, in this case, the customer would be harmed if the high shipping fee were imposed by surprise. The seller could reduce or eliminate that harm if adequate notice were given to the buyer. On the other hand, eBay could be harmed if the seller avoids the full auction ending fee. That seems simple, but there are complicating factors.
The balance of power between eBay and the seller is unequal. eBay has enormous power to shape the marketplace it provides. And that marketplace is hugely profitable, to judge by their quartely reports, stock valuation and the $3.5 Billion (plus possible $2 billion additional) they just laid on the barrelhead for Skype. The seller is a small retailer, or medium sized at best. He has limited choice for many of eBay's fees. eBay gets a cut coming, (insertion fees) going (auction closing price percentages and PayPal fees) and hanging around (various services like image hosting and listing aids.) The value proposition it offers in return is access to lots of buyers.
Fair enough, but in retail, margins are typically razor thin. Let's look at the fees a typical seller might pay to list and sell, what, a new HP-12C?
Wholesale price of calc -25.00
Auction Fees
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Bold Listing Fee -1.00
Buy It Now Listing Fee -0.25
Gallery Fee -0.35
Insertion Fee -1.20
Listing Designer Fee -0.10
Picture Fee -0.30
Scheduled Listing Fee -0.10
Final Value Fee -0.39
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Total Auction Fees -3.69
Income
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Final price: 12.00 (FV fee is 3.9%)
Shipping & Handling 40.00
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Total income 52.00
Post sale and prep
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PayPal Fee -1.56 (.03 * 52.00)
Actual Shipping -5.00
Labor to set up auction -7.50 (1/2 hr @ $13/hr)
Actual handling -3.25 (1/4/hr "" "" )
Shipping Materials -0.50 (Wrap and tape)
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Total pre and post sale -17.81
Total cost of goods sold -46.50
Total profit 5.50
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Now, if we reverse the auction price and shipping above, the final value fee becomes $1.31, an increase of $0.98 in the seller's fees. That represents a whopping 17.8% hit to the seller's bottom line. From eBay's perspective, the lost fee is 15.7% of the revenue they should have received.
Now, none of this directly speaks to the ethical issue. What it does do is to supply context to that issue. The seller, like most retailers, is struggling to make a profit. A 17.8% hit to his margin might well be the pebble that sends him underwater. If that happens, eBay loses, because it can't extract fees on a continuing basis from the bankrupt seller. And we the buyers lose, because we don't get to exploit, in the form of prices cheaper than brick and mortar retail, that seller's willingess to work for next to nothing.
So in a functional sense, who is hurt by this guy, the "poor slob of a seller" I called him above, shaving a few more points at the apparent expense of eBay? Assuming, once again, that the charge isn't hidden, and assuming that eBay's reputation system works to protect both the buyer and the seller from fraud, nobody! eBay could, without a doubt, institute a policy like "shipping and handling charges will not exceed the actual cost of shipping, and 5% of the item's auction value for handling." Why don't they do that? Once again, because eBay loses if the poor slob, living on a razor thin margin, folds his business. It's a delicate balancing act for them. They need to charge enough to keep the billions flowing in, yet not enough to ruin the retailers. I'm sure this keeps smart folks at eBay on their toes, at least five days a week.
So, "no harm, no foul" in my book.
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