A recent study that economics professors at the UC Berkeley Haas School of Business and Hong Kong University of Science and Technology found that you can boost your profits by starting with a low opening bid price and charge higher shipping charges.  They study was first reported in the current edition of Advances in Economic Analysis & Policy.

According to eBay rules you are not supposed to raise shipping cost to avoid eBay fees, but those that do this which are many, are usually making more sales on eBay.  You may be faced with account suspension, but it seems like these sellers open new accounts regularly to compensate to get these profits.

To the researchers surprise they found out that they were wrong.  The eBay auctions that were lowered on the opening bid price and raising the shipping charges had more bidders earlier on.  This caused more bidding on the auction and forced the price to go up even higher.  The professors acknowledge that the reason that this must happen is because the consumer is not paying attention or looking at shipping costs when bidding on an item.

The auctions were divided into groups.  One auction had a total starting price of $4 and the other half had a total starting price at $8.  Of the $4 group, half of these were started at the one penny bid price with a $3.99 shipping charge.  The other $4 group had free shipping.

The $8 group was divided with half of the auctions started with an opening bid of $2 with a high shipping cost of $6.  The other group was the opposite, with a $6 opening bid with a low $2 shipping cost.

The $4 group that started at 1 penny sold had more bidders and higher sales totals.  There was an average of 21 % higher final sale price than those that had free shipping.  The $8 group that had the lower starting bid had an average of 11% higher final sale price compared with the $2 shipping group.