SIOUX FALLS, S.D. (AP) - Mike DeVries wasn’t sure what to make of the precipitous drop in sales.
DeVries and his wife run an eBay business from their home just southeast of Sioux Falls in Alvord, Iowa, selling farm, automotive and machinery parts, the Argus Leader (https://argusne.ws/1sN0TyQ ) reported.
Everything else sold as it always had, but two smaller items - 12-volt solenoids and lawn mower bearings - stopped moving altogether a little over a year ago.
The solenoids went for $10 apiece, plus around $3 shipping.
“They just stopped selling altogether,” DeVries said.
His curiosity led him to do what business owners have done for hundreds of years: Check the competition. What he found were 12-volt solenoids from China selling for $3.29 on eBay. Not only were prices lower, the items were offered with free shipping through an “ePacket.”
“I can’t even ship across the United States for free,” DeVries said.
A google search for ePacket turned up a Washington Post article about the small shipping bags and their impact on the U.S. Postal Services’ bottom line. He also found websites highlighting complaints from domestic shippers angry about an unfair field of play.
The United States Postal Service lost $75 million in 2014 thanks to the UPU deal with China, according to the testimony of David Williams, inspector general of the USPS, and the Postal Service received 27 million ePackets in fiscal year 2012. Each packet lost the post office $1.10 on average.
The losses caused by the entrance of Chinese sellers into the online marketplace are something that needs attention in the next round of negotiations, Williams said.
“The UPU’s mission is as relevant as when the institution was created. But, like many enterprises, the UPU system has been greatly disrupted by globalization and the digital age,” Williams told the committee.
An Amazon executive named Paul Misener told the House Subcommittee on Oversight and Government Reform last summer that the rates were unfair and illogical.
The deal creating the ePacket system with China Post makes it cheaper to ship from thousands of miles away than within the same state. Shipping a one-pound parcel from Greenville, South Carolina, to New York would cost the domestic shipper nearly $6, Misener said, while a Beijing seller would pay $3.66 in postage.
“At high volumes, especially for low-priced items, such dramatic shipping cost differences can make or break a small ecommerce business,” he said.
DeVries didn’t worry about the downturn in solenoid and bearing sales much at first. The family sustains itself with a mix of farm income and sales of larger, more expensive items on eBay.
“I just threw them in the trash,” DeVries said.
Even so, the discovery of the imbalance made him uneasy, and he wanted to get the word out. He hopes more people will take note, take action and do as he did: Email their Congressional delegation and ask for a level playing field.
Representatives for U.S. Sens. John Thune and Mike Rounds said Thursday they hadn’t heard from South Dakota constituents on the issue. U.S. Rep. Kristi Noem’s team also said the issue hasn’t garnered feedback.
If no one speaks up, DeVries fears, the next deal could involve the approval of low cost, international flat-rate boxes for larger items, impacting more businesses.
“People need to know about this,” DeVries said. “It’s not about me.”
Information from: Argus Leader, https://www.argusleader.com
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