Source: What is bulk shipping?
I wrote the following post two years ago during a consultation. The goal was to see which site offered buyers the best return on revenue when selling kicks on 3rd party sites StockX and eBay:
Does eBay Really Have the Best Fees in the Game? How Shipping Shapes Sneaker Resale
In this post I explained, “a seller has to factor in which platform is the best to utilize, but if the comparison remains between eBay Sneakers Fees and StockX Fees at this moment StockX is the platform to sell on… StockX will have to adjust. Losing 3 dollars a pair isn’t a smart business strategy. As the company has been adjusting policies, expect a charge to the buyer to be implemented.”
StockX made the update to recapture fees from smaller sellers on the platform soon after I wrote this post. They rolled out a $4.00 charge for Seller Levels 1-2 on single shipped items. This led to their Bulk Shipping policy introduced a year ago. Originally, Seller Levels 3-5 got a refund of the $4.00 dollar fee when they used bulk shipping, the option to pack up to 12 pair in one big box.
When this program was announced I explained that it ultimately didn’t solve the loss in profits for StockX due to the company refunding sellers and still providing free shipping on the seller’s side for bulk orders. A bulk order ships at a less expensive price per shoe than one item. UPS cost for one shoe averages between $6-10 dollars a pair. UPS for a box of 12 – due to the additional insurance- is between $30 and $50, but is still a bigger risk for these reasons:
- Shipping theft – one shoe isn’t potentially lost, multiple pairs are.
- Insurance – Bulk shipping doesn’t remove insurance costs. Each pair adds an additional $2-4 dollars per item.
- Level 3-5 Refund – sellers capable of moving multiple pair are more than likely higher-level sellers so the refund of $4 dollars a pair gives the seller back up to $48 bucks per box.
When the $4 dollar fee was announced there were more sellers on StockX. The market has shifted and there are fewer sellers. Resale doesn’t have the margins on general release product and not enough of the hype product is being sold by individuals to offset the shipping expenses of StockX. StockX has also stated premiums are down on sneakers sold. Why is this important?
More than likely the only sellers capable of still turning a profit in the current resale environment are Level 3-5. Smaller margins means that the Bulk Selling Discount is more problematic for the resale platform today. On November 27th, 2023 the What is bulk shipping? (stockx.com) page was quietly updated. Level 3-5 Sellers probably haven’t noticed, but on bulk shipments they are no longer being refunded the $4.00 fees.
Is this a signal that StockX is ramping up to make the books look better for a potential IPO? Since the market is back and there have been somewhat successful initial public offerings, could 2024 be the year we finally get a look behind the curtain and find out just how good or bad StockX has been performing? Did you notice the change in policy?
Update
The shipping charged on bulk shipping equates to $4 dollars per shipment. If there are 12 items in a box, the shipping cost will be:
- Shipping Cost:
- $4
- $0.36 per item
If there are 4 items in a bulk shipment, the shipping cost will be:
- Shipping Cost:
- $4
- $1.00 per item
This isn’t a big recapturing of funds but when applied to the fees charged to the seller for shipping ($14.95) StockX is possibly at break even on shipping and over the next year, this will show growth when the books are opened for a potential IPO.
