The Problem With the USPS Rate Increase

20 May 2007

Corey Kossack

Corey Kossack is a Managing Partner at Game Change Ventures, focusing on partnering and consulting with startups in the areas of social media, consumer Internet and e-commerce. Corey is also an Operating Partner at Game Change Ventures' first Internet startup, Addoway, a social marketplace that helps you buy and sell with your friends and the people they know. Formerly Corey was one of the world's largest retailers on eBay, built a $1M company from scratch at age 23, has led multiple startups and received numerous awards for his entrepreneurial achievements.

I just read a comment on one of my previous posts from “samthehappyman” (thanks Sam for the feedback!) 

Sam had mentioned that his eBay business has not decided whether or not they will raise their shipping rates, but that they will be watching their competitors closely to see if they move first. No one wants to have more expensive shipping than the competition (unless of course their prices are lower), so everyone is waiting to see who moves first.

Most eBay businesses simply cannot afford to eat the shipping costs all on their own, so eventually we will all have to raise rates. However, no one wants to raise their rates now because if they do, they might lose a lot of their sales to those who haven’t raised rates yet, and in effect, will pay MORE eBay insertion fees for all their unsold listings!

Whew, what an issue… Some of us are just going to have to be bold and make the most to the more expensive shipping, and hope that the rest of the eBay community follows and doesn’t think they can edge out the competition by reducing their profit margins. When sellers get the idea in their heads that they can steal more of the market by operating on thinner and thinner margins, bad things happen. The seller with the new low margins ends up cutting it too close and drastically reduces the amount of profit they pull in each year, and the sellers that keep the margins the same lose business to the other guy, and pay more eBay fees since their items aren’t selling quickly enough.

It will be interesting to see what happens!

Corey Kossack is one of eBay’s “Top Sellers” through his eBay store, Koss DVD He is also author of eBay Millionaire or Bust and creator of, an online software tool designed to reduce eBay fees and maximize profits for eBay sellers.

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