Why would we want to pay more for shipping?

What a strange question? Of course we wouldn’t! Who wants to pay more for shipping? I’m sure many of you found those $0.01 listings on eBay with $25 shipping, and thought “Oh my god, these liars lured me into their listings again…”. Well, think again.

As I mentioned – I live in California. One of the biggest economies in the world on its own behalf, with more than 30 million people living in it, buying stuff, and more importantly – selling stuff. And when they sell – they have to collect sales tax, for every sale. 9.25%, at least, of the purchase price. We all know that, don’t we?

Now, consider this: the sales tax is on the actual price of the sold item or service, but not on the shipping and handling of the purchase. Do you see where this is going?

Well, those luring liars understood this quite some time ago. When you have two listings from California sellers for the same item, where one seller charges $25 for the item but provides free shipping, whereas the other charges $0.01 for the item but requires full $25 for the shipping – guess where you’ll pay less. That’s right, at the second seller’s. Why? Because he has to charge you $0.00095 sales tax, which is practically nothing. The shipping? Well, it’s not an unreasonable price. The other guy, for the same $25 purchase, will also charge almost $2.5 sales tax. Oh, but the shipping is free.

So here you are, if you’re buying something on eBay, or Amazon Marketplace, or anywhere else, consider the shipping rates again. Maybe, you’ll want them to be higher this time.

Isn’t that nice to know?

Your Little Advisor

This entry was posted in Online Shopping, Sales Tax, Shipping and tagged , , , . Bookmark the permalink.

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