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?