Archive | April, 2009

USPS Shipping Tips and Tricks For Buying and Selling With eBay and Paypal

24 Apr

You may also be interested in these guides: Utilizing USPS Priority Mail Flat Rate Boxes For Your eBay Business and The Perils of International Shipping With eBay and Paypal – A Guide to Successful Shipping Practices

This article’s main points and concerns are:

If you add shipping insurance you must also add Delivery Confirmation or Signature Confirmation.

Buyers, when returning an item to a seller, you must use the same techniques sellers use to ship to you.

Understanding how USPS rates work can save you serious money.

Hide or show the postage cost when shipping with Paypal.

Turn off shipping receipts to save paper/labels.

Use Paypal to print a shipping label to anywhere, even when there is no accompanying payment.

USPS Priority Tyvek Envelopes are strong, lightweight, and free.

Utilize Self Adhesive Shipping Labels to Save Time.

Click the link below or the article title up top to learn how.

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How to Use USPS Signature Confirmation Effectively with eBay and Paypal

23 Apr

You may also be interested in these guides: The Limitations of USPS Delivery Confirmation and Can USPS Signature Confirmation Be Used to Ship to P.O. Box?

This article’s main points and concerns are:

Signature Confirmation is required on all transactions of $250 or more.

During transit, packages with Signature Confirmation act the same as those with Delivery Confirmation.

How to avoid buyers who prey on sellers unfamiliar with certain shipping technicalities.

Signature Confirmation represents a potential hassle to the buyer if they are not present to sign for the package.

Paypal has changed the way they decide disputes when the Signature Confirmation numbers says delivery was attempted.

Buyers must pick up packages held at the Post Office as soon as possible because they are not as well protected as they once were.

Read the entirety of this article by clicking the link below or the title above:

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As Expected, eBay Inc. Results Exceed Expectations

22 Apr

EBay’s revenue and profits exceeded Wall Street’s expectations again this quarter. Revenue topped 2.02 billion compared to the estimate of 1.94 billion and profit per share was 39 cents compared to the consensus expectations in the 33 cent range. eBay’s payment division, which includes Paypal, was the strongest of eBay’s businesses, bringing in revenue of 643 million dollars on 15.86 billion in payments processed. This represents an increase of 10% year over year. Revenue for eBay’s Marketplace division, which includes eBay’s core auction website, decreased 18% year over year to 1.22 billion dollars. Looking forward, eBay expects revenue in the second quarter to be similar to the first. Estimated revenue is in the 1.85 to 2.05 range and earnings per share in the .34 to .36 cent range.

EBay stock was up 49 cents in regular trading to $14.78 and is up between 5 and 10 percent after hours, trading above $15 for only the second time in the last 4 months.

Where is eBay Headed in 2009 and Beyond? Today’s Earnings Report May Give Us Some Ideas.

22 Apr

EBay will announce quarterly earnings this afternoon. A number of other major companies will announce earnings as well, including Apple, McDonalds, Boeing, and AT & T just to name a few. Analysts expect a profit of 34 cents a share on 1.94 billion dollars in revenue. Profit per share would be the lowest since the first quarter of 2007. Over the past 10 quarters, eBay has consistently beat expectations, so the actual numbers may be slightly higher. The stock is currently trading around the $14 mark, up from a 52 week low of $9.91 but significantly lower than the high of $32.10. The Wall Street consensus has eBay stock rated a “hold.” Somewhat against the grain, Standard and Poor’s has reiterated a 5 star “Strong Buy” rating four times in the past ten days. Their 12-month target price is $18. Other analysts have the number slightly higher or lower.

EBay leadership has made some significant decisions in the past week that may help position the company more favorably in the future, and make for a more interesting conference call with investors today. The most publicized has been the future of Skype, which eBay plans to either sell off in the form of an Initial Stock Offering some time next year or sell outright back to its founders. The decision will probably depend on the status of the economy and whether or not the stock market has continued to rebound. Skype, which eBay famously acquired in 2005 for 2.6 billion dollars, never materialized into profits. EBay never successfully integrated the chat platform into its auction website and the transaction is thought of by many as one of the company’s most serious mistakes. Nonetheless, Standard and Poor’s believes the sale may net the company as much as 2.7 billion dollars, so the overall loss could be much less than the more than one billion initially feared. Much less publicized is eBay’s announcement to purchase South Korea’s leading auction site Gmarket for 1.2 billion dollars. EBay has had serious trouble penetrating Asia’s fickle markets and the move has the potential of increasing eBay’s presence on the Mainland in the future.

EBay’s bright spot is its Paypal division, which eBay expects to process more than 100 billion dollars in payments by 2011. Paypal is hugely profitable because they charge the same fees whether the payment is a credit card transaction or not. Many Paypal transactions are pure profit for the company as the cost to transfer money from one Paypal account to another is virtually zero. In addition, eBay has successfully kept payment processors like Google Checkout and Amazon’s service off of eBay, creating the best monopoly legally available. Much less successful is eBay’s core auction business. Nielson ratings show a 5.2 percent drop in unique visitors and a 27 percent drop in page views when comparing March 2009 with March 2008. This translates to lower prices, fewer sales, and ultimately less commissions for eBay. Such a substantial drop in page views is dire news for a company whose business used to be solely auction related.

EBay’s troubles will likely continue through 2009, as more sellers leave the platform for alternative venues. Tough economic times will continue to be a mixed blessing as well, as buyers turn to eBay for bargains, but don’t have as much money to spend on luxury items. EBay has been running attractive promotions for sellers, including final value fee credits on items listed with free shipping, but many fall short of the real changes sellers are demanding. It is difficult to gauge what eBay’s core auction strategy will be in the future. For much of 2008 they tried to compete with Amazon by inviting stores with a large presence online, like Buy.com, to list items at greatly reduced costs. More recent announcements point in a different direction. EBay’s best move may be international expansion. Their proposed acquisition of Gmarket is proof that the company is still mindful of international markets. Plus, there might still be people somewhere out there that eBay has not yet pissed off.

Take care, and let’s hope today’s news is good.

When to Buy Shipping Insurance Part 2 – The eBay Seller’s Perspective

21 Apr

You may also be interested in these guides: When to Buy Shipping Insurance Part One – The Buyer’s Perspective and The Perils of International Shipping With eBay and Paypal – A Guide to Successful Shipping Practices

Many sellers have a disclaimer in their listing stating something to the effect of, “Not responsible for lost or damaged items if buyer does not pay for shipping insurance.” As I explained in Part 1, this statement is entirely false.  The seller is responsible for delivering the item to the buyer as described in the listing. Period.    No clause or fine print will get a seller out of this responsibility.  If the buyer receives an item that is not described accurately, they can open a dispute with Paypal or the credit card they used to make payment.  The buyer will win and the seller will be forced to issue a full refund.  The seller can point to their “Not Responsible” clause all they want.  It doesn’t matter.  It is not the buyer’s responsibility to ensure that the seller packaged the item properly nor is it their responsibility to ensure that the seller described the item accurately.  Paypal does not care when the damage occurred, only that it is damaged and the buyer did not receive the item that was advertised.  This being said, many sellers will try to convince buyers that because they have the “Not Responsible” clause, they are actually not responsible.  Many times the buyer will believe them and not take the issue up with Paypal or their credit card.  My point is not to argue the ethics or morals of “how a good seller acts,” only to point out that if the buyer receives an item that is not as advertised, it does not matter if they purchased shipping insurance or any other additional shipping service.  If the buyer is familiar with their rights, and more importantly how Paypal works, they will file a claim against the seller, receive a refund, and most likely leave terrible feedback and Detailed Seller Ratings.

So when should a seller pay for shipping insurance?  Unfortunately, at least when purchasing first party insurance from the carrier, the answer is likely never.  Here are some reasons why.  First, it is nearly impossible to get USPS, UPS, DHL, or similar companies to grant an insurance claim.  USPS can deny a claim based on “insufficient packaging.”  Their argument is that any item that is damaged during transit was insufficiently packaged by definition.  After all, if the item was packaged properly then it would not have been damaged would it?   Second, USPS insurance does not cover “shock” to the package.  This means that if the item is dropped, but the packaging still looks intact, insurance will not cover it. So forget collecting on that laptop that was dropped repeatedly during transit and won’t turn on.  For a complete list of what does not qualify, check out USPS Nonpayable Claims There is an appeals process for denied claims, but your odds certainly don’t improve at that point.  Third, USPS recently announced that as of May 11, 2009 all claims will be decided by a centrally located division in Missouri called “Accounting Services,” instead of at your local Post Office.  A cynical person might assume that USPS is doing this because too many local Post Offices were being lenient with granting claims.  Don’t be fooled.  USPS lost nearly 3 billion dollars last year and they’re doing everything in their power to trim costs, including weaseling out of paying your $1,000 laptop claim by any means necessary.  Have you heard about people having difficulties collecting on warranties purchased at stores like Best Buy?  Heard about dying people getting denied heart transplants by their health insurance?  Cakewalk in comparison.  As of May 11, USPS no longer even requires you to bring the packaging or the item to the Post Office when submitting the claim, probably because they expect to deny your claim long before that even becomes an issue.  They reserve the right to inspect and impound the item and packaging at some point, and they certainly would before they consider granting your claim, but you could claim victory if you even make it that far.

Now that I feel a little better, let’s consider third party insurance.   Third party insurance is available from companies like Shipsurance and U-Pic .  These companies insure your packages just like USPS or UPS does.  On top of that, they do so at a discounted rate.  The general consensus is that you have a much better chance collecting from third party insurers, so they may be your best bet if you have a need to insure your items.  You can view the introductory claims form from U-Pic here: U-Pic Claim and Shipsurance here: Shipsurance Claims Forms so you can prepare for what will be necessary in case you do need to file a claim.  Also, make sure you are familiar with the terms and conditions like the ones from Shipsurance available here Shipsurance Terms Note that like with USPS, they can deny your claim based on insufficient packaging as well as “Mechanical and Electrical Derangement” which basically amounts to the Postal Service’s “shock” exclusion explained earlier.  There are also various other downsides to third party insurance.  The first is that there is no indication on the packaging or shipping label that the item is actually insured by the third party.   Buyers who pay for insurance may question whether or not insurance was actually purchased or if their $2 was a waste of money.  If a seller requires shipping insurance and the amount exceeds a couple dollars, they can expect to receive some complaints from buyers who are unfamiliar with how third party insurance works.  Shipsurance provides printable inserts that state the package is insured, but even that may not stop the wrath of the dreaded crazy eBay buyer.  Second, keeping track of all of the insurance information can be a serious hassle if a seller ships in volume.  If a seller takes packages to the post office to be weighed and mailed, they will also have to manually enter that information online at their respective insurance website.  Shipsurance offers a program to make it much easier when printing labels online so I recommend integrating that if possible.  If you insist on insuring packages, seriously consider changing to a third party insurer.

I should make an important point here.  Third party insurance companies would not exist if USPS or other carriers lost and damaged items routinely.  It is rare for an item to be damaged by carrier negligence that would constitute a grantable claim, which is why insurers can offer $1000 worth of insurance for $10 or less.  If they expected to pay out more than 1% of these claims they would lose money.  Like I explained in my Delivery Confirmation guide, I have only lost one package out of more than 50,000 shipped via USPS Priority Mail with Delivery Confirmation.  As a seller, you have to decide whether paying for shipping insurance is an economical choice and understand that in the long run the insurer always wins.

Finally, let’s consider what happens if the buyer claims that the item they received was damaged and the seller wants to file an insurance claim.  First, the seller will have to have the full cooperation of the buyer to fill out the required affidavit that the item was received damaged.   Considering the difficulties in getting many buyers to leave feedback or reply to even the most basic email, it may be difficult to relay all of the appropriate information to the buyer and have them complete it correctly.   USPS can deny claims if “The sender or addressee failed to cooperate in the completion of required claim forms.”  As the seller, you will have limited control over the claims process. Second, the buyer will have to hold on to the packaging and the damaged item through the insurance claims process, which may take several weeks.  With USPS, if the buyer returns the item to the seller it will likely invalidate the insurance claim as USPS will argue that there is no proof that the damage was not caused by return shipping. This puts the seller in a difficult position.  Buyers who understand that they can receive a refund from Paypal will likely demand one long before the insurance claim is decided.  If the seller provides this refund, then the buyer will have even less reason to deal with the complicated insurance claims process. In addition, whoever files the insurance claim will have to provide proof that the item is worth the amount declared, along with proof of insurance, and proof of damage.  The buyer will not have access to this information, so the seller will either have to send it to the buyer or try to submit the documentation themselves.  There are a great number of problems associated with filing insurance claims.  The process is meant to be difficult and frustrating because the insurer does not want to pay the claim. The absolute last thing USPS or any other insurer wants to do is grant an insurance claim for a large amount of money and they will do anything and everything in their power to see to it that your claim is denied.

Like with all insurances, shipping insurance is meant to be profitable for the insurer.  To be profitable, the insurer must deny as many claims as possible.  This makes shipping insurance an unattractive investment.   If you do ship items that require insurance, consider a reputable third party insurer like Shipsurance.  They are both cheaper than the carriers and more likely to pay out if damage or loss occurs.

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