Abe raising rates again..

8

By on April 3rd, 2008

This post was writen by Guy Weller of Mr. Pickwick’s Fine Old Books.

This latest fee increase by ABE is ridiculous – I would have been far happier to see them increase their monthly rentals than applying this absurd sort of hit on the shipping component.

A great many sellers will increase their shipping charges at ABE, which will have the inevitable effect of costing some sales which climb through the buyer barrier of resistance, and any such lost sale costs ABE 8% of the book price + 5.5% across book and shipping combined on their credit card skim.

The average sale at ABE is around $US 13 and I guess the average shipping component would be about $US 5 or so. So on each $18 combined sale ABE currently reaps $1.04 + $0.99 in c/card fees at 5.5% or $2.03 (which is 15.62% of original book price).

Under this new scale the respective amounts will be $1.44 + $0.99 or $2.43 (or 18.69% of original book price).

Many booksellers will increase their shipping charges to compensate, and this price increase to customers must inevitably cost some sales, as the shipping climbs through the buyer resistance level.

I am not suggesting that buyers will abandon the site in droves, but look at the math:

For every sale at the average price lost due to increased shipping costs (and there will be SOME of these) ABE loses the $2.03 it would have netted had that sale proceeded.

It makes a mere extra $0.40 from each (average) sale processed under the new scale, and would need to “hold” 6 sales for every sale lost due to buyer shipping resistance before it actually made a revenue gain of $0.37 across the 6 x $18 = $108 gross revenue.

Obviously ABE will not lose 1 sale out of 7 (14%) due to this move, but it will lose SOME, and the anticipated revenue increases will therefore turn out to be in a significant part illusory for this reason, since each sale lost negates the next 6 made in terms of potential increased revenue.

In online planning, it is madness to increase shipping charges – you are MUCH better off running with a slightly higher price and lesser (or even “free”) shipping charges.

In fixed-store retail planning, it works the other way around – all the focus there is on the “advertised price” and very little on the half-hidden extras like delivery, installation, paid-for extended warranties etc.

ABE goofed when it introduced the c/c 5.5% (note that they are now actually reducing that on $500+ orders in partial recognition of this mistake).

They SHOULD have increased the commission then to 10% and introduced MAPS at 3.5%, which would have been a much easier “sell” to booksellers, and given them a much stronger income bedrock.

I don’t mind the idea of a corporation looking to fee increases to fund its growth, nor the prospect that the shareholders of a corporation deserve a decent return on the capital they have invested in infrastructure and providing the services on which we all to some extent depend.

I DO object to half-witted strikes in the WRONG fee areas, which this one is.

Shipping rates can be looked up on the Internet from most countries, and often are by our bookbuying customers to make sure we are not “rorting” them with extra loadings in that area.

Already I have to pay ABE’s blasted 5.5% on my c/card component of shipping, or 4% more than I was previously paying my provider.

Now I am hit with an extra 8% “fee” on this shipping – 12% loading in all on the publicly advertised and easily accessed postal charge (about $25 from Australia to the UK for an average book).

If I pass this on in full to my customers, it will not be long before some of them start querying why I am “loading” the postal costs so excessively, and they will be most dubious if I tell them that I am actually being taxed on this supply cost via my listing site.

They will conclude I am just taking a skim for myself – I would conclude the same thing myself if I were buying at ABE, and not in possession of the facts.

So this move is technically, philosophically and practically bad for ABE, and for all those who list there.

Higher costs and fees from ABE? I can live with that.

Ramping shipping costs to customers higher?

Strategic madness.

Cheers,

Guy Weller

Mr. Pickwick’s Fine Old Books

  • http://www.trylinskibooks.ca Debra Trylinski

    I agree with all your points raised in this post Guy.

    I also sell on Abebooks and have been doing so since 2002.This business of taking an 8% commission off of the shipping amount is ridiculous. And, as I am from Canada, it is 8% commission plus 5% gst on the commission amount.

    Debra

  • http://www.rainydaypaperback.com Nora

    I suspect taking a cut off the shipping is aimed at sellers that were using excessive shipping charges as a form of fee avoidance. You know them when you see them, the seller charging $8 for a $1 paperback shipped inside the US that arrives in a flimsy envelope. They’re making the money on the shipping AND avoiding giving ABE any of it.

    It’s that sort of tricky dealings that they were targeting. Policing their site for that sort of fee avoidance would actually fix the real problem AND improve customer satisfaction. But they’ve opted for a heavy handed method instead that really won’t do much to fix the underlying problem.

    What should be done by an actual human (ie, enforcing existing policies) is instead handed off to an automated system that will penalize many, many people unfairly and do little to fix the real problem. Those that were gaming the old system will find a way to game the new one.

  • Wayne

    Nora’s comment is, I think, on the mark. Of course, it won’t really impact the people it is targeting. ABE is frustrated that they aren’t getting a cut, whereas I am frustrated that they show price ranking based only on the so-called ‘price’ of the book, hence making the high-shipping-charge crowd show up first on the search. I would think one of two alternatives would allow ABE to get what they want while helping create a little equity in their approach.

    First, institute standard shipping rates. Pretty easy to do and it eliminates the issue altogether. Having a way to request increased shipping for heavier than normal items, as we now have, would make this system work. I know some folks complain about this approach on Amazon, etc. but the complaints are mostly associated with not being able to ask extra for heavy items or sets, etc.

    Second, Sort price based on the combination of book price and shipping, so people would see the “real” price they are paying AND it would rank hits based on actual cost to the purchaser. Both of these are automated and hence inexpensive, which is the reason they instituted the policy they did versus policing the site, which is labor intensive (== costly) and prone to error.

    As it is I just don’t see how this will do anything more than cause a few pricing adjustments by all dealers, then back to start, with a slight increase in price. Not being the kind of shop that sells $1 (or even $5) books, it is a minor hassle to me. Just a few more pennies out the door that I will have to make up elsewhere.

  • http://pazzobooks.com Tom

    I can’t imagine this will deter anyone from loading the shipping price – because most searches default to lowest book price (rather than lowest total price), they still get most of the benefits of the deception. I would imagine the biggest impact on shipping prices would be everyone raising theirs to account for the extra hit – makes their argument seem pretty disingenuous.

  • Bruce K. Hollingdrake

    Wayne,
    Thanks so much for your input. I think both your solutions have merit and being one of those dealers that plays it straight with my shipping charges, I especially like the idea of sorting by the ‘real’ price. Why is it so easy for us to see these solutions but Abe management is blind/ignorant?? They really seem to have no vision for long term success; it baffles me.

  • http://prying1books.com prying1

    I’m still waiting for those collecting funds from me for listing my books online to send someone over and help me list books. – Hopefully someone that can spell.

    How long should I hold my breath???

    ~~~~~~

  • RexKelly

    I agree that the overcharges are unacceptable. But what ABE is doing is charging a handling charge on shipping of something which they never actually handle. The question is, are charges like this legal in the Canadian and American judicial system.

    Thank you for this blog; I hope more booksellers promote their web site URLs in the product descriptions so that buyers can find them directly in the future. That is the best use of ABE, to redirect buyers to sellers so they can be treated fairly.

  • don miller

    I’m one Of your small booksellers. Every book I sell internationally is weighed at a U. S. Post Office & the true price & options are emailed to the customer through your system. We are responsible for delivery no matter what. so our choice is to insure every copy.

    Look up at your P.O what a one kilo book would cost, since with insurance there are only a few EXPENSIVE options to ship. So as has
    happened, we have shipped books to CANADA sold for $15.00 with actual shipping charges of $20.00 (OR MORE)…5.5% Of that added to Abe charges? To build up the customer,s costs is dishonest.
    Added to the Fee, Commission, & the booksellers time(including wasted time at the P.O….. Hope you think it over & reconsider.

    THANK HEAVEN FOR LITTLE GIRLS & ALSO MACDONALDS WHERE I CAN GET A HAMBURGER FOR $1.00 $US !!

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