PPI abuse or something else ?

[memkad]

Hi,

I've been using OBA for a year or so now and am always on the look out to reduce our postage costs.

There are multiple sellers on eBay offering products that are clearly too big for large letter rate, so they have to go as a parcel. A basic 2nd class parcel is £2.50 inc Vat. I know they are using PPI as I've bought from them.

What I can't get my head around is this... The sale prices out there are for example £1.25 inc. free delivery! and they are selling 100's of units...

That is half of the postage cost, let alone the cost of the product and eBay, Paypal fees etc...

I've spoken to Royal Mail customer services that say, 'don't know how they are doing it', I spoken to my account manager who says 'I can't comment on a businesses commercial decision' ... Sorry but I've been in business for 25 years, it makes no sense whatsoever business wise to make a huge loss on selling a product unless there is something else going on...

Any insight into this would be greatly appreciated.

Thanking you all in advance.

Mehmet

[TrueBlueTerrier]

If you send more than 1,000 parcels a year have you looked at using Royal Mail 24 or 48

24 48.PNG

http://www.royalmail.com/sites/default/ ... h-2015.pdf" onclick="window.open(this.href);return false;

As to the original question could they be doing loss leaders to entice people, or with the volume they send they get bulk discount.

They could be defrauding RM, its possible, but if its widespread then eventually people are caught and prosecuted, so it's a dangerous game, especially as RM always go for recovery from crime proceeds even with posties stealing.

[memkad]

Thanks for the reply.

I use RM48 and it comes out at £2.08+vat (sorry that's what I meant when I said second class)

I'm not sure if they could be having it as a loss leader as each eBay auction is separate.. It just doesn't make sense. Even with a bulk discount you only get 4-5% if I remember right. The numbers just don't add up.

I can post an example of such a product and seller if that would help. I am in no way accusing anyone of wrong doing, just trying to understand how things are worked out.

Please let me know if you wish me to post an example.

Thanks again for your help.

[wannabeek]

A bit of an insight from a once-ebay trader, several years ago tho - I used to have some lines I sold at break-even or even at a small loss, sold loads of them dirt cheap purely for the purpose of boosting my ratings on ebay. It worked well for me, got me higher up the search listings to make my more profitable items more visible (does ebay still do 'best match' using your stars as a qualifier? That was the leaderboard I was trying to get up).

Nonetheless, people were more willing to make a high-value purchase when they could see that I had thousands of positives and top-rated status (even though it was based almost entirely on sales totaling under a fiver!) Glad I'm out of that game now tho, a string of negs could've put me under at any time!

By the way, i wouldn't post any examples if I were you. Pointing fingers at individual traders and suggesting they may be doing something illegal could p them off. It would have if it were done to me.

However, feel free to post an example of your own listing and let us analyse it and rip it to shreds, pointing out what all your competitors are doing better - like in the good old Friday night flaming wars on the ebay forums! I left soon after they abolished all that. It was getting nasty tho.