How Will Rising Shipping Rates Effect Online Auctions?

As if online selling and auctioning weren't competitive enough, online sellers are being forced to reconsider their most important secret weapon.

Online sellers are being squeezed between the consumer demand for free shipping and the ever-increasing costs of shipping. This month, the cost of sending UPS, FedEx, and USPS Priority Mail and Express Mail packages rose, and a few weeks ago, the USPS filed plans to raise rates for First Class and Standard Mail rates in April.

Merchants are paying 25 cents more for a USPS Priority Mail Small Flat Rate Box, and will pay up to 15 cents more per package for USPS Media Mail beginning April 17, 201.

Sellers must pass along higher shipping costs by raising shipping & handling fees or by raising the price of product, or somehow just eat the higher cost of shipping. Either way, they face higher payment processing fees and in some cases, higher fees to online marketplaces and inventory management services that take a percentage of the transaction.

How will you deal with higher shipping costs in your business? Are you increasing your S&H, rolling costs into the price of the item, or taking the loss on margins. Any chance of finding a happy medium?