As sales roll full steam into the Christmas Rush, online sellers should heed the cautionary road signs and route markers indicating "Speed Bumps Ahead". According to all sources there are many changes coming that will slow growth, reduce profit margins, and force many out of online sales all together.
Through planning and good marketing many sellers will be able to proceed without disruption. Staying up to date on current issues, placing cash back into depleted reserves and operating funds, and preparing back up plans will help in the coming months.
Upcoming Changes impacting online sales
Proposed 2007 USPS Rate Increases
2007 UPS Rate Increases take effect January 1, 2007. According to the UPS communication received November 17, 2006 rates are scheduled to increase as follows:
"UPS Ground service to commercial and residential destinations will have the same transportation charge, based on the lower commercial rate, and will increase 4.9%. The Ground residential surcharge that was previously built into the Ground residential rates will now appear as a separate charge on your UPS invoice. Air and International services will increase a net 4.9%, through a combination of a 6.9% increase in rates and a 2% reduction in the air fuel surcharge. In addition, the Delivery Area Surcharge and Residential Surcharge will both increase by $0.10."
Increased costs and decreased exposure across all venues are expected to continue in 2007. eBay has already announced plans to continue the "Disadvantaged" idea and decrease exposure to stores even more. To support continued revenue growth while their market declines eBay will have no other alternative than to raise fees again. Other venues are tossing around similar ideas.
Increased costs of packaging and shipping supplies are expected to rise between 3%-5% over the next 12 calender months to keep up with production cost increases. Given the increases in 2006 caused by Katrina and Petroleum costs the 3%-5% increase may be an underestimated figure.
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