Why excessive shipping hurts eBay

From a buyer's point of view, excessive shipping looks like a good deal. The item price is low, and the shipping is high, but in the end it adds up to an overall bargain in the buyer's eyes, so he makes the purchase. Buyers for the most part have no need to care if sellers are charging excessive shipping in order to circumvent fees, as long as they're getting a good deal. But it's good sellers who are hurt by this.

For example, tonight I found an auction for 10.5x16" padded envelopes. I was shopping for this exact type of item. I compared the cost on various sites. The going rate for a case of these envelopes was about $30 for 50. The seller had 75 envelopes going for $4.90, plus $25.95 shipping. Curiously, that adds up to about $30.85, approximately the going rate for those envelopes.

So let me illustrate. What the seller is doing is charging $4.90 on an item he knows is worth at least $30 by itself. But since he knows the item is worth $30, he can't just charge $4.90 and actual shipping costs. So he chooses to collect the rest of the item's value through shipping costs which are more than what he could possibly pay. In the end, he collects the item's full value through the low item price + excess shipping. But by listing the item at $4.90 and making up the rest in shipping fees, he circumvents (avoids) the listing fees and FVF fees on an item that would sell for $29 anywhere else and instead pays only fees on a $4.90 sale. So the seller gains a profit edge over other sellers because he's paying less fees but getting the same price for his item.

Now, I wouldn't care about this if we could all do it. But it's against eBay policy to circumvent fees through excessive shipping, so we can't all just do it. And I don't like it when another seller gains an unfair edge by violating policy, so I get upset and report it when I find it, and I pass the lesson on to you. Sellers like this hurt eBay. You can help make eBay a better place by avoiding these practices, not supporting them, and reporting them (through the reporting link on the bottom of the auction).