how do sellers make profit and offer free postage

[ronaldinho9612]

Hi,

Im just wondering how sellers on eBay are providing items so cheap and offering free postage?

example..an iphone charger for $6 including free postage.

A normal postage cost for a parcel under 500g is about 6.60

How would you get cheap postage rates or even make a profit on items that are <$6? regardless of dropshipping

[*crikey*mate*]

a few scenarios

loss leaders to attract people to other th8ings they are selling

if international, subsidized postage, or the items cost SFA to actually make in the first place.

is it a genuine article? is it a fake?

maybe no product even exists, they have no intention of shipping it to you, but are instead interested in obtaining your details for either future marketing, to onsell your information or some kind oif scam.

[*sparklz*]

If they post a certain amount through Aust Post a month and have an account they get discounts on postage costs so it will cost less than what others pay..

[crowsman53]

Umm you can all laugh at me on this one I stuffed up Big Time I listed 3 Pieces of Bendigo Pottery starting at $12.50 Items sold as there was only 1 bidder. What I didn't know at the time of listing was I used the Template of another Item which was Free Posting Via Turbo Lister. Any why the Items sold for $12.50 and Postage was $11.70 So i made a whooping 80 cents. Not to worry I just finished packing it and I put it down to S*** Happens My Loss Their Gain but at least a customer will be happy and will post it Tuesday.

[ronaldinho9612]

well i was considering opening a store on ebay, and obviously as a begginer i wont be able sell large amounts of electronics (most likley) so if i sell a cable for example for $5 and delivery will cost at least $6-7 so by the time my store gets bigger abd bigger i would had lost a hell lots of money ??

[*crikey*mate*]

so don't offer free postage, or sell the cable for $12 with free postage.

or, don't sell the cable.

[digital*ghost · Accepted solution]

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@ronaldinho9612 wrote:

How would you get cheap postage rates or even make a profit on items that are <$6? regardless of dropshipping

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Dropshippers usually do not pay any domestic postage once an item reaches Australia - they purchase the items from a supplier as the orders come in, and have them sent directly to the buyer in Australia. Some of them pay very cheap unit prices, and shipping from other countries (like China) can also be incredibly cheap and/or their profit margin is nominal. 

Selling cheap or cheaper items is not the only way to compete with other sellers selling cheap items. Some buyers favour speedy delivery, safety, quality, personalised service, simpler and more cost effective returns if necessary, etc etc, over cheap items, and are willing to pay higher prices for those things. 

Also, depending on the size of the cable, it's possible to post one domestically as a large letter, which is $1.20, $1.80 or $3.00 depending on weight. 

[ronaldinho9612]

well why would anyone buy from me when there is much cheaper ones

[*crikey*mate* · Accepted solution]

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@ronaldinho9612 wrote:

well why would anyone buy from me when there is much cheaper ones

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unless they were committed to buying from Australian seller, they probably wouldn't. so this is where simple economic principles come into play.

1) If you are unable to compete in a certain market, don't.

2) Find a market in which you can compete. i'e source another prioduct which either allows you to acheive the profit margins that you desire or at least makes it worthwhile for you to trade.

[springyzone]

It depends on what you are selling.

Okay, I know nothing about cables.

But last year I bought 2 separate lots of diamante buckles (for invitations etc), one lot from Australia & one lot from China.

The aussie ones were $40 for 50, the Chinese ones were roughly $14 for 40 (I forget exact figures, but a lot cheaper, anyhow).

So why did I buy from the aussie supplier? (Given the buckles she sold would have been made in China anyway)

Two reasons.

1. Her ad made it clear these were A grade, higher quality ones than some others on sale on ebay. The ad wording then, was important.

2. The seller's location wasn't far away so i knew I would get the items that week, whereas it could be a month till the Chinese ones turned up and I was a bit unsure of what the quality of the chinese ones would be like (the aussie ad having made me a little worried).

3. The communication with the aussie seller was top notch, she was great.

I was happy with both purchases.

Was there a big difference between items?

Probably not, considering what i wanted them for. Were the aussie ones better quality? possibly. They were very even and sparkly, but by the time I got the Chinese ones, the others had been used and posted so i couldn't cmpare.

But for sure, if you have a slightly better quality item and make that clear in your ad, I think you could sell them to aussie buyers, as long as you have really quick repliesto any queries and fairly quick deliveries.