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A company I worked for actually sort of made up their shipping prices whole cloth. They had contracts with the shipping companies to get a good deal on shipping

A company I worked for actually sort of made up their shipping prices whole cloth. They had contracts with the shipping companies to get a good deal on shipping, and rarely passed those savings on. So most cases, they charged more than they were paying to ship your product, and in a few cases they charged less. So, the majority were subsidizing shipping costs for a few, with a hefty profit bump for the company. But I don't think they had any real competition, so I guess they could just charge whatever they thought people would pay. They even operated multiple brands for the same exact products/services, just to offer different prices and advertise from a different angle. So, back to the point, regardless of whether the price is broken out or bundled, there's really no way to tell how badly you're being gouged. Unless you can find it cheaper someplace else, the only question is whether it is worth it to you at that price.

exolymph 10y ago
> They had contracts with the shipping companies to get a good deal on shipping, and rarely passed those savings on. So most cases, they charged more than they were paying to ship your product, and in a few cases they charged less. I'd wager this is true of 85% of companies when it comes to cost savings.
robryan 10y ago
In Australia it is pretty easy to get a feel for what low volume retailers are paying, eBay sellers will usually charge about $7 for an auspost parcel under 500g. A little above the rate for sending to the same capital city or other major cities, below the rate of seinding the most other places. So a retailer with a bulk discount can probably get away with that rate, much higher than around $8 though and people would know it isn't a real rate.
cdr 10y ago
If I recall this is largely why eBay started charging the seller fees on the shipping cost (boy was that a loophole) and then heavily pushed sellers to move to free shipping. On the flip side, as an eBay seller it's kind of painful to know that if I sell something for $X, shipping is eating $3+ of that - on top of the 10% cut for eBay and the 2% for PayPal. It makes it not worthwhile to me to list anything below $10.

exolymph 10y ago

> They had contracts with the shipping companies to get a good deal on shipping, and rarely passed those savings on. So most cases, they charged more than they were paying to ship your product, and in a few cases they charged less. I'd wager this is true of 85% of companies when it comes to cost savings.

robryan 10y ago

In Australia it is pretty easy to get a feel for what low volume retailers are paying, eBay sellers will usually charge about $7 for an auspost parcel under 500g. A little above the rate for sending to the same capital city or other major cities, below the rate of seinding the most other places. So a retailer with a bulk discount can probably get away with that rate, much higher than around $8 though and people would know it isn't a real rate.

cdr 10y ago

If I recall this is largely why eBay started charging the seller fees on the shipping cost (boy was that a loophole) and then heavily pushed sellers to move to free shipping. On the flip side, as an eBay seller it's kind of painful to know that if I sell something for $X, shipping is eating $3+ of that - on top of the 10% cut for eBay and the 2% for PayPal. It makes it not worthwhile to me to list anything below $10.