Sellers use to charge exorbitant S&H fees back when eBay did not charge additional fees on top of the S&H fee. This was a benefit to sellers because it reduced the fees they had to pay eBay. The total cost to the buyer was unchanged, since buyers paid sale price + S&H costs, but many buyers did not notice the S&H price and instead focused on the sale price. (Remember all the chips auctions starting at 1¢ but with $3 S&H fees?) These buyers would often times complain about the high S&H fees after knowingly bidding on the item.

eBay has since changed that policy and now add the sale price + S&H and charge their fee (as well as the PayPal fee) on this total. They have also renamed "S&H" to simply "Shipping". This does not stop sellers from charging lower item prices offset with higher shipping costs. Believe it or not, there are still many buyers who simply do not add both together in their heads prior to bidding. And, even when buyers do this, you will see more completed sales on items that sold for $.99 with a $2.50 shipping fee and unbid auctions on items that were asking $3.00 and offered free shipping. It makes little sense, but that's just human nature. I've posted auctions using both pricing models and this has proven accurate.

eBay would like to remove shipping costs all together. They now ask buyers to rate the seller's shipping costs. Those with "high" shipping costs are reprimanded and gradually lose their selling "privileged".

So, today, with these new rules in place, sellers might ask exorbitant shipping prices for 2 reasons: 1) people tend to look at the bid price and ignore the shipping costs, or 2) to get more eyeballs to look at their auctions in hopes that they will find a buyer.

Lastly, chip collectors on the ChipBoard will offer current $1 chip releases for $3 delivered. Do you have any idea what you'd have to sell the same item for on eBay to realize the same profit? (Answer: $5.20)