Hey everyone, I'm new to the board and hope I have some useful insights into this discussion. I was an avid herper as a youngster but have just gotten back into it after a decade long break (just finished my degree). Although I don't know much about the herp business, I do know a fair bit about the Internet and buying online (double majors comp sci. & commerce), not to mention I'm an avid eBayer.
Firstly, the handling charge is worst when it's unstated; if someone's agreed to a sale at a certain price, and then halfway through the transaction they find out they have to tack on an extra fee, it's likely they'll feel like they're being cheated and obviously be unhappy about it. On the other hand, you're right that there is a set market price and going over will result in less sales, the extent of which depends on how elastic the demand for YOUR herps are. Also, if you just charge your handling costs into shipping, people will also feel cheated, feeling they are being charged extra underhandedly, particularly if they know what the shipping costs should be like.
The best solution in my opinion, is to keep charging the predetermined market price, but state the handling charge up front, clearly separate from shipping. Sure, people will notice that they're going to have to be paying more. However, when you tell them about this charge, they'll begin to wonder if your competitors are going to tack on this extra charge later or not, and perhaps charge even more for handling. At this point, you will have an advantage since the buyer has more information from you than your competitor, and the perceived risk associated with buying from you will become lower.
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