If Your Rep Is Good Enough, Shoppers Accept Additional Surcharges

Fees may be a way for sellers to offer a low “landing price” to attract buyers in, but then make it up by the time of final sale by tacking on extra charges, but not all surcharges are created equal. The seller’s reputation impacts whether buyers will pull the trigger or not, according to a new study.

The study found that shoppers were less likely to accept additional surcharges when they were levied by a low-reputation eBay seller than from a high-reputation one. The consumers in the study would decrease their bids to account for fees when the seller had a low reputation, but now when the seller was mid to high-reputation.

No matter what their reputation, you should always compare the total price between the sellers. I usually try to go for whatever is the lowest total price from someone with a decent but not necessarily perfect rep.

How surcharges affect pricing and purchasing [news.info.wustl.edu] (Thanks to c-side!)

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  1. humphrmi says:

    Reputation determines whether I do business with the seller or not. Price is irrelevant at this point, in fact until I qualify a seller, I pretty much ignore the price.

    Once I’ve determined that the seller is reputable, then it’s all about price. I don’t care whether there’s an S&H charge, as long as the final price is the lowest amongst the reputable sellers I’ve chosen.

    I can’t imagine that I’m especially unique in that approach.

    • valarmorghulis says:

      @humphrmi: This is generally what I do. I’m usually willing to go with less of a reputation though if the savings is substantial (but not too good to be true).

    • nsv says:

      @humphrmi: For a long time I was an eBay seller, and I’d put items up for what I thought was a reasonable price plus actual shipping fees. It seemed fair to me.

      I’d watch other sellers with the exact same item ask significantly more for a starting bid, but OHBOYOHBOYOHBOY FREE SHIPPING!

      Their items sold for much more than mine, even though their feedback showed they picked the slowest, cheapest possible shipping and people were seriously pissed about it.

      In the meantime, I’d get people complaining “What do you mean, it costs $4.60 to ship Priority Mail?” Look at the box, stupid, the postage is right on it.

      So yes, your shopping method just might be unique.

      • mac-phisto says:

        @nsv: it works both ways – i also see people getting reamed by a $15-30 markup on shipping charges on items that could never cost that much to ship. they’ll list “the goonies” for 1¢ ($4.95 “buy it now”) + $25 s&h to ship it media mail. yeah, i don’t think so.

        free shipping has the advantage of allowing the buyer to delimit their search in a way that makes your item stand out, so that’s something to think about. if you’re shipping an item media mail, you might consider just eating the cost for the added benefit of drawing more prospective customers into the fold.

        • nsv says:

          @mac-phisto: I watched a friend (another eBay seller) get burned badly by PayPal. With that and all the changes at eBay, it was much easier to donate my entire stock to charity and pack it in.

      • Outrun1986 says:

        @nsv: I have seen the exact opposite, items with free shipping sell for no more than mine do when you consider the total price. Sellers that offer free shipping have to eat the cost of shipping, packaging etc and plus they have to pay ebay more money in fees since ebay doesn’t take fees on the s/h cost.

        I also was not taking paypal until ebay forced me to and even though I was not taking paypal I was still getting the same bids that paypal sellers were getting (despite all those people telling me, oh you will make MORE with paypal).

  2. Cankles says:

    I’m I hope I’m not shooting this entirely out of left field. Anyhow…

    What burns me is when they offer free shipping, so I’m suckered into buying from a site, but then I realize the free shipping means it will arrive in a month. So then I elect to pay for a slightly more expensive delivery option, but instead of having a discount equivalent to the price of standard shipping, I have to pay full price.

    Sorry, just got done buying some stuff for Christmas, and this has burned me for the last time.

    • Cankles says:

      @Incognito: Scratch that, sorry, I re-read the post and this is beyond left field… I think I shot from the bleachers.

    • balthisar says:

      @Incognito: I just want to point out that, wow!, shipping has gotten expensive. I’m an infrequent shipper (UPS said my last login was November 2007). My 10 oz box shipped ground with no extra features is $8.00! That also includes an almost $2.00 fuel surcharge, which is probably what makes it seem expensive (really, $5 to $6 seems reasonable).

      Fuel surcharge? I want to take the Expedition out of the garage and start driving it during the week again, gas is so cheap. In fact it’s cheaper than it was when the price convinced me to sell the first Expedition.

      • HiEllie says:

        @balthisar: I recently was thinking about how ridiculous fuel surcharges are. They were supposed to offset the cost of rising fuel prices (3.50+) but now that fuel in most areas costs less than 2 dollars, there is no need for the surcharge. Do you think people will get their money back? Heck no! Insanity.

  3. whitefang2001 says:

    Ebay has become a cesspool. The site is so ugly and hard to navigate. Ebay is the new AOL

  4. Ben_Q2 says:

    I would like to say there are some ebay sellers that go out of their way even when Ebay does do something wrong.

    All Ebay users know about their coupons? You know the 10% off up to $100. I never could get one to work. Anywhoo last week I was looking at this flag and it show me what it would cost with the 10% off and the seller was offering free shipping. That price and shipped was worth it to me. I had bought from her before and had nothing but good things to say about her.

    Bid went it, I seen the cost my 10% was there. I go to paypal to pay it. Again the 10% is there I hit the button to pay it and then once again my 10% is now gone. It was not the sellers problem but Ebay. I did not feel like read/getting the same can email/chats I have in the past so I emailed the seller.

    We did send email to each other and in the end she offer me the flag cheaper then the 10%. I did tell her in those emails I was also going to buy something else. This was before the offer. I did buy a shot glass (I do not drink, but like the smile face). Again she was nice sent me a bill, as I was getting ready to pay it. I could not for the life of me remember I was not going to order the shot glass. A hour later I go to light one of my 50% Lowe’s Christmas candles and remember what I wanted. I found the candle holder and seen there was 2 of them. I did make a offer on the set. She did say yes. She did not add any extra for the shipping. I thought she would have as the extra items are heavier then the flag and shot glass.

    I like buying from the person. In a time where people are charging $19 to ship something that only cost $5/9 to ship ($2 on top of the shipping cost is a ok handling fee for me) and some even charge more then 3x the cost even if they have high feed back. They do not try to work with people.

    So thank you Heather.

  5. clickable says:

    S&H fees are also important in case there may be an issue of returns, if the seller won’t be refunding shipping & handling.

    For example, if Seller A sells a widget for $1 plus $5 S&H, and you return it, you will be refunded $1.

    If Seller B sells the same widget for $4 plus $2 S&H, and you return it, you will be refunded $5.

    In both cases, the total cost to you is the same $6, but if you have to return the item for whatever reason, Seller B offers the better deal because you will recoup more of your original outlay.

    • tc4b says:

      @clickable: Nice point, never thought of it like that. Probably never had to, due to my eerily perfect record of good buying experiences. (*knocks on wood*)

  6. TrueBlue63 says:

    Isn’t this another example of people wanting something for nothing?? Retailers are more sophisticated than 4th graders. They understand that if they charge $10 less for an item but charge $20 more for a mysterious handling charge, they win. Not only that, but did you ever try to get a refund on a handling charge LOL.

    When internet shopping, you must compare apples to apples. Delivered price, speed of delivery, and retailer reputation.

    If we were as concerned about mathematical literacy as we are about English literacy, this stuff wouldn’t come up.

    • tc4b says:

      @TrueBlue63: I’m not sure it’s mathematical literacy as much as consumer literacy. Businesses big and small are trying to cheat you. Not being familiar with some of their tactics is, to me, like speeding without a seatbelt. Or, for a gentler analogy, walking in the summer woods without bug spray. You gonna get bit.

  7. Parting says:

    eBay is not exactly a good example.
    Title is misleading.
    I’m disappointed, Consumerist.

    • tc4b says:

      @Meltdown: How is ebay a bad example? They made a diret correlation between reputation, which, on ebay, is quantifiable, and consumer behavior. What would be a better example? Which example could you find as concrete a set of data to look at?

      • weakdome says:

        @tc4b: I thought they’d be comparing, you know, actual retail stores. Like, “people are more willing to buy from store A(pple) even though everything costs extra, whereas not as many people want to buy from store B(estBuy) because their reputation isn’t as sterling”