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Find Cheaper Materials.
The key to making profit on shipping is to use the cheapest materials you can get for packing, without compromising on quality. The great thing for you is that many eBay PowerSellers have made a business out of providing sellers with quality packing material in bulk at really low prices.
To get an idea of what's out there, take a look at this category: Business & Industrial > Office, Printing & Shipping > Shipping & Packing Supplies. You might also try paying a visit to a big-box office supplies store.
Buy in Bulk.
Always buy hundreds of the same sized packing boxes at the same time. Since you should be selling the same items over and over again, you'll need the same sized boxes each time. You will always be able to get discounts for bulk – if the place where you're shopping won't give you any, go somewhere else.
Streamline Your Packing.
Try to pack every time using the same amounts of the same materials in the same way, so that you don't need to think about it too much. Have all the labels for the packages printed up in advance, and do the items in that order. The less time you spend on the packing, the more profit it is for you.
Round to the Next Dollar.
Let's say you're buying items for $2, and selling them for $4 + $1.50 shipping. Rounding the shipping to $2 would make you an extra 40 cents on each sale – considering you're currently only making $2 profit, that's a percentage profit increase of 25%!
You see, this extra money will be far more important to you than it is to the buyer, because it's on the margin. For you, it's extra profit for nothing, and for the buyer, it's too small an amount to bother caring about. Everybody wins in this scenario.
The Ideal Price Point.
Find out what your rivals are charging for shipping, and try to just undercut them while still making a profit. If you managed to buy some cheaper materials, this shouldn't be too hard for you – most of the sellers on eBay are buying envelopes and boxes one-by-one, which is a very expensive way to do things. If you work things out correctly, you should be able to offer shipping at a price point which makes your rivals look silly, and still be making a good profit on it!
If you're running the kind of operation where shipping is a big concern, then the chances are that you're listing a significant proportion of your items using ‘Buy it Now', instead of going through all the trouble and uncertainty of using real auctions every time. But wait! Using ‘Buy it Now' isn't always the right thing to do. Our next email will give you a few tips on when to do it and when not to.