I’ve been meaning to put something like this together for some time but other stuff, usually much more exciting, was always getting in the way!
Since it was introduced last September, subsequently aborted and then relaunched to very little fanfare, eBay’s Global Postage Program (GPP) seems to have limped out of the starting blocks under a cloud of suspicion and ambivalence from those groups of people that it was allegedly set up to benefit.
I won’t lie – I’ve been a big fan of it since I first heard about it a few months ago. It’s arrival on the scene coincided with my attempts to find a more cost efficient way of bringing boxes of Baseball cards over from the US into the UK without the worry of all the excessive charges that constantly seem to impede this ‘simple’ process!!
Since digging a bit deeper, leaning on my own experiences as a buyer and those of Sean (from Pittsburgh Sports) as a seller, I’ve managed to get a better handle on how the whole process works and who really benefits from it!
Intrigued? Then read on!!!
Please note – This article is written exclusively from the perspective of a buyer from the UK. Different countries have very different import duty thresholds, such as Australia which has a threshold of $1,000 AUD before import duty is imposed (thanks Santo!), and I don’t have anywhere near enough information to look at things from that point of view! So it’s easier for me to stick to what I know to illustrate the examples I’ve provided.
It is also based specifically upon the purchase of Baseball cards and boxes! The GPP is available to all eBay sellers in the US irrespective of where they sell from (although there are certain restrictions on some eBay selling categories) but I don’t have any experience dealing with the purchase of other types of goods through the GPP.
You all know the story by now!
Purchasing items from the US for international buyers can be an expensive business! In the UK there’s always the threat of the dreaded import tax, and the accompanying courier ‘handling’ charge to deliver the item to your doorstep, often resulting in that ‘bargain’ item that you’ve snared on eBay almost doubling in price before you even get your hands on it! Add in the recent USPS price increases and the whole process ends up being a costly joke!
With the introduction of eBay’s Global Postage Program I genuinely thought that the future potentially looked a lot brighter.
Since starting this blog in September 2012 I’ve written several posts on this topic. I’ve listed them all below in chronological order so feel free to peruse then at your leisure!
It’s important to bear in mind at this stage that import tax is not always a given when buying items in the UK from abroad. In fact it’s pretty random as to what gets stopped and what doesn’t. I tend to live by the rule that the bigger the item the more chance it has of being stopped and taxed! Not the most scientific of methods, I’ll grant you, but in the past I’ve had more boxes of cards hit with extra charges than I have high-value, single cards in small envelopes! That said, I did hear from someone the other day who had been charged import tax on a small package from COMC so there’s always exceptions to the rule.
See – I told you it was a bit random!
There are two important distinctions to make when looking at what charges we incur in the UK –
Import Tax – This applies to any purchase made over the threshold of £15 (approx $23.00 USD), not inclusive of shipping and handling charges. The rate of tax charged depends upon the type of item being imported, although custom fees can be charged to cover the expense of performing any required examinations, verification and or testing of the imported goods. The total amount of tax charged is calculated on the value of the goods, plus the international shipping costs and insurance, plus any import duty due
Courier Handling Fee – This is a fee applied by the courier responsible for the delivery of the item you have purchased and covers any ‘admin’ costs they may incur on items that are taxed on entry into the UK. The courier could be the Royal Mail or Parcel Force, or one of the specific courier companies such as DHL or FedEx
It IS possible to work out how much import tax you could be liable for if your item gets stopped at Customs, but the courier fee is a more arbitrary affair and can often be higher than the amount of tax you have to pay in the first place
With me so far? Good!
With the GPP the process is simplified to a certain extent as you pay for any import tax during the ebay checkout process, the seller sends the item to a domestic holding facility (currently in Kentucky) and the item is then forwarded on to a similar location in the UK. From there it’s sent out in the mail through the same channels as any other item of post in the UK!
So, who benefits from this process?
For collectors in the UK you know exectly what you’re paying at the time of purchase and shipping costs should be cheaper as the item purchased is first being sent to a location within the US. The GPP also sidesteps the arbitrary ‘admin’ charge imposed by the courier companies and the buyer only pays the import tax – nothing extra! The unfortunate side effect of this is that you HAVE to pay the import tax – there’s no opportunity to roll the dice and take your chances that your item won’t get stopped at Customs and therefore won’t incur any charges at all!
ebay sellers don’t have the worry of dealing with international shipping and the possibility of items going missing in the post! You simply send to a single domestic location so any shipping charges could potentially be reduced as well. Once out of the seller’s hands it’s the responsibility of eBay’s partner Pitney Bowes to ensure the safe delivery of the item to its overseas location!
Of course, that’s how eBay wants it to read on paper and that’s how eBay sells it! The truth of the matter is a little more complicated than that, as I’ve since found out!!
eBay has stated that it wants us to avoid paying any ‘hidden charges’ by knowing what we’re paying up front, but if you look closely enough at the listings which contain the GPP as a shipping option you’ll see there are a few ‘hidden charges’ that eBay has added of their own!
Take a look at the listing below for a box of 2012 Topps Series 1 Baseball from Pittsburgh Sports –
If you read my post yesterday which looks at the GPP from a seller’s perspective you’ll know that Pittsburgh Sports has free shipping to domestic US locations. Yet the listing here shows that there is a shipping charge due of $12.61. eBay tells us that this is made up of
- U.S. shipping fee: the amount (if any) charged by your Seller to ship the GSP Item to the U.S. Shipping Center
- International shipping fee: a variable fee covering shipment of your order by the third party shipping carrier selected by Pitney Bowes from the U.S. Shipping Center to the delivery address designated by you, including applicable miscellaneous third party charges and fees
- Fuel surcharges: any and all fuel surcharges charged to Pitney Bowes by its service providers, to the extent not included within the international shipping fee
- Transaction fee: a variable fee covering selling, general, and administrative expenses, software development, operations, software licenses, hardware, and hosting by Pitney Bowes
- Parcel processing service fee: a variable fee covering services by the third party parcel processing service providers
- Distribution center management fee: a variable fee covering management by Pitney Bowes of the third party parcel processing service providers and related software systems
- Loss management fee: a variable fee covering the expenses to Pitney Bowes of insuring the risks to it of lost or damaged items
- Transportation risk premium fee and variances: a variable fee covering operational expenses associated with short-term loss recovery and the management of any variances between the quoted Shipping amount and actual costs
- Referral fee: a variable fee paid by Pitney Bowes to eBay Inc. for referring you to the Programme
Just take that in for a while!
Yeah, that’s exactly what I was thinking!!
This is an eBay charge and nothing to do with the seller. The sellers aren’t even aware that this charge is imposed as they don’t see it as part of their listing process!
Now take a look at the listings below, both for the same item, one from the eBay UK site and one from the eBay US site!
You’ll notice here that there is a higher shipping charge this time on the UK site. This is the sum of the amount that the seller charges for domestic shipping and the rate that eBay imposes (in the same way they did with the box of 2012 Topps above).
If you also look at the above two screenshots you’ll see that eBay also adds on an import charge, even though the current bid amount is still far below the threshold before any import tax would be applicable under UK Customs laws. eBay tells us that this is for –
- Commodity taxes: any and all sales, goods and services, and value added taxes or other amounts assessed or levied by any government authority in connection with the importation of goods into the applicable country of importation, including, but not limited to, duties, tariffs or excise taxes, but excluding income taxes, that are required to be paid in respect thereof upon importation to any governmental or regulatory authority in the country of importation, as well as third party brokerage fees (such as advancement and disbursement charges and any and all additional handling or filings fees due to third party customs brokers) and penalties (but excluding any customs duties, taxes, surcharges, fines, penalties, or other charges which may be imposed on you by customs or tax officials after a GSP Item has successfully cleared customs and been delivered to, or made available for pickup at, the delivery address specified by you)
- Classification fee: a variable fee associated with the assignment of a Harmonized System (“HS”) classification code to each commodity. An HS classification code is a numerical code used as the basis for the calculation of applicable customs duties and is usually required by your local customs authorities for importation declaration. If the GSP Item that you purchase is not subject to Import charges, this fee will be included within the Shipping amount quoted to you
- Export compliance fee: a fee covering export compliance screening, verification that export licenses are not required, and the assignment of an Export Control Classification Number (ECCN). If the GSP Item that you purchase is not subject to Import charges, this fee will be included within the Shipping amount quoted to you
- Importation risk premium fee and variances: a variable fee covering operational expenses associated with short-term loss recovery and the management of any variances between the quoted Import charges and actual costs
Obviously the higher the amount the higher this import charge will be (see the import charge attached to the 2012 Topps listing for an example of this)!
Now these charges may well be genuine and justifiable aspects to the whole GPP process (at least in eBay’s eyes), but it’s difficult to see them as anything other than extra charges that eBay has arbitrarily imposed on buyers!
So this basically means that before we even get started bidding on an item listed under the GPP, eBay has already imposed a minimum combined charge of $16.98 to the listing. Mmmmmmmm!
Let’s take the second example a little bit further, and say I managed to successfully bid on this item and win it at the current price then I’ll end up paying $0.99 for the item and an extra $19.96 in shipping/import charges under the GPP. That’s £20.95 in total! Now imagine if that was a single card and you start to see the absurdity in all of this! If you read my Q&A with Sean at Pittsburgh Sports he makes the point of saying that it’s much cheaper to send single cards via USPS and this evidence certainly backs that up!
Returning to the first example, if I was to purchase the 2012 Topps box under the GPP then it would cost me $67.94 or £44.83 which, although still expensive, is a much more reasonable option under the GPP, and without the worry of the extra charges.
If anyone in the US is reading this please don’t laugh when I say this amount is ‘reasonable’. With the higher prices that we’ve had to pay for years in the UK it’s just something we’ve come to accept!
However, there is one factor that could make the GPP an appealing option for larger packages and that’s down to the recent increases in the USPS International shipping rates as of the end of January 2013.
Look at this again without the GPP – based upon the weight of the Topps box at 1.6lbs (0.75kg), to send this from the US to the UK under current USPS rates would be $34.39 for Priority Mail International which I believe offers some form of tracking and insurance (this amount was taken from the ‘Dave & Adam’s Card World’ listing for the same box). This is obviously a significant difference from the cost of the GPP listing! Then if you figure in the possibility of import tax and the handling charge you could be adding on an extra $18.00+ USD on top of that, making a total box price of in excess of $90.00!
And that’s relying on the sellers charging the correct postage rate. I’ve seen some boxes of this type being sold with international shipping set at around $60.00.
Scenario 3 makes the GPP listing a much more viable and cost-effective option! But I guess it all depends on whether you want to take the risk or not! And let’s face facts, no-one likes to pay any extra tax if they can avoid it!!
So, what have we learnt from the GPP some 6 months in?
Firstly, there still doesn’t appear to be a massive buy-in from US sellers at the moment. This could be because of a lack of awareness or perhaps because they’ve made a conscious decision not to opt in and have the GPP as part of their listings!
I’ve read rumours that the GPP will eventually become the norm for US sellers who wish to sell to international customers. I don’t know where we stand with this at the moment, or if there’s any truth in it, but if it does come in as eBay ‘law’ then I believe it will permanently change the way in which international buyers trade with US sellers on eBay! And not for the better!!
Secondly, the singles card market for international buyers under the GPP is dead! The new USPS rates have pushed the cost of sending a small packet from the US to the UK to absurd levels, and believe it or not the GPP takes that level of absurdity even higher with their mandatory minimum fees for shipping and import charges! It makes no economical sense to even entertain the idea of buying a single card from a US seller who has it listed under the GPP. This isn’t the seller’s fault as they don’t see those extra charges that we see as part of the listing!
Thirdly, I still firmly believe that their is a place for purchasing larger items under the GPP, such as boxes of cards, multiple boxes or even cases, and I’ll continue to actively seek out eBay sellers who offer these types of items in this way. I find it incredibly re-assuring that the rate of postage I’ll be paying will be a lot smaller due to the item of interested being shipped to a domestic location. And alongside this the idea of paying any import tax upfront gives me more control over what I buy as opposed to waiting for an item to be delivered to me in the UK, only to find all manner of charges attached to it from UK Customs and courier services.
And who really benefits from the GPP at the end of the day?
Well I don’t necessarily think that buyers do because of the extra charges that eBay adds on to the GPP listing, making it virtually impossible to purchase smaller cost items from US sellers. Purchasing larger items could work as the GPP does help bypass the ridiculously high USPS international shipping rates, but that’s the only benefit I can see as it stands!
Sellers do benefit from piece of mind in that they don’t have the concern of dealing with international shipping head-on, along with the customary headache that comes along whenever an item goes ‘missing’ in the post! Shipping to a domestic location means they can be much more flexible with their shipping costs and they are secure in the knowledge that they have honoured their side of the sale be getting any item they have sold to the collection centre in the US.
But lets face it, the true winner from the introduction of the GPP is eBay themselves! The introduction of the minimum charges against each GPP listing acts as yet another ‘stealth’ charge against the buyer in a similar way to how recent changes in the listing/final sales fees have affected sellers!
I don’t feel that eBay has done enough to convince international buyers that the GPP is a viable option when trading with US sellers. Better advertising would help raise awareness, and changes to the way that smaller value items are handled could go some way to addressing this, but so far I feel that the GPP is performing far below its potential.
How eBay views the current status of the GPP is anyone’s guess. For all we know it’s working exactly as they anticipated and they couldn’t be happier.
For international sports card collectors the GPP provides another frustrating example of how purchasing items from the US has been rendered, once again, unnecessarily awkward and restrictive! It’s been obvious for the last few years to international buyers that the number of US sellers who are prepared to ship overseas has dropped off at a drastic rate! Given how eBay is constantly changing the rules that affect how people sell (along with a little help from USPS in the shipping rates department), I can’t say that I really blame them.
eBay really needs to introduce a scheme that makes the prospect of trading internationally much more appealing to US-based sellers and international buyers. If the GPP was intended to be a move in that direction then I’d say that they’ve so far fallen way short of the mark!
Wow!! That was a big one! Lots to be said, and if you stuck with me this far then you have my thanks!!
Your thoughts and comments, as always, are greatly appreciated, particularly anything from you US-based sellers out there!