topic Re: Anyone use subsidised post? in Selling

Anyone use subsidised post?

lane-ends — Thu, 04 Jun 2015 01:54:01 GMT

We have had the arguments about free post vs actual post. Just wanting to hear from those who offer a flat post rate which is less than actual, that way you keep item price down but as your advertised post is always less than actual eg say $5 whether itr goes in a 500gm satchel or 3kg satchel. That way you dont have to estimate shipping cost at listing, nor get into squabbles over listed cost vs actual.?

Many of my items are bordline on satchel rate so it is easy to quote wrong one.

It also leaves scope for discounting on multiples.

Re: Anyone use subsidised post?

bigbrickshop — Thu, 04 Jun 2015 03:00:11 GMT

I have looked at it and still haven't made a decision.

There are many of the largest stores that have a flat $9 or $10 shipping fee.

Of course, it relies on the buyers using the cart and making one combined payment for multiple purchases. I wish eBay would get rid of the Buy t Now button so all sales went through the cart.

Re: Anyone use subsidised post?

digital*ghost — Thu, 04 Jun 2015 05:13:10 GMT

I use flat rate postage, and find it works great (most of the time) for my items. I charge a low letter rate and sometimes need to use parcels so I can lose a little on occasion (on postage anyway), becaue I don't exactly subsidise postage costs in my item prices, but there are still savings for me if buyers purchase multiples (resources, like packaging and labeling, PayPal fees if one payment was made etc).

If you use the new Sales Maximizer thing and set up postage discounts / promos with it, the banner on listings prompts buyers to use the cart. (I have still had people paying separately, though, apparently it's not visible on apps).

There is one other alternative, and that's a postage cap - that's what I used when I sold clothing. 1 item was normal postage costs, but people couyld buy any number of items and pay a maximum of $12 postage (based on what was then the 5kg express satchel, which was a bit more than that at the time). That way, no one is ever paying more than they need to for a single item, and people who buy multiples have an incentive / reward.

If anyone wants to know more info about how I use a flat rate postage etc, I'll be happy to share a little later tonight (errands to run, birthday shopping to do :D)

Re: Anyone use subsidised post?

glenbankloel — Thu, 04 Jun 2015 05:26:37 GMT

We just use $7.00 flat post for our 500g satchells. We do lose a little bit, but so much easier and we have keep this price just over 3 years. Most of our items are under 500g. Pretty easy to make it up, lose .45c if we use C&S and .20c if we use Ebay labels. The only time we change is when goes over 500g and thus falls into the 3kg range, so the new weight class from AP of 1kg (for June) might work for us.

By fixing the price ages ago we don't have to worry about trying to calc postage. But, as always Horses for Courses.

Re: Anyone use subsidised post?

lane-ends — Thu, 04 Jun 2015 09:17:04 GMT

@glenbankloel wrote:
We just use $7.00 flat post for our 500g satchells. We do lose a little bit, but so much easier and we have keep this price just over 3 years. Most of our items are under 500g. Pretty easy to make it up, lose .45c if we use C&S and .20c if we use Ebay labels. The only time we change is when goes over 500g and thus falls into the 3kg range, so the new weight class from AP of 1kg (for June) might work for us.
By fixing the price ages ago we don't have to worry about trying to calc postage. But, as always Horses for Courses.

What I was getting at is say using the same below actual rate costs (bit of perceived marketing there too) for all items regardless of actual postage cost. Dont want to work out any postage weights or estimates when making up listing. Everything in the store to be the same cost.

Re: Anyone use subsidised post?

digital*ghost — Thu, 04 Jun 2015 09:47:53 GMT

Actually, I do use flat rate (often subsidised) postage elsewhere. On another site, my store and business model is geared towards international buyers, so I have a different pricing structure and postage set-up, because the costs (and risk) is quite a bit different to just posting domestically (which I do on eBay).

The appeal of flate rate (just IMO) isn't necessarily that it's cheap postage for the buyer (though that is probably one aspect), it's that there are no surprises, the buyer always knows exactly what the postage amount is going to be, so it appeals to the convenience shoppers (upfront pricing, nothing to work out), and it appeals to the bargain hunters (the ones who'll buy more in one go, to make the most out of low P&H).

On the other site, I (primarily) charge the rate for a <250g international letter ($7.50, actually, so 10c above). My actual postage costs are a bit more than that, because I like to use the rigid mailers for OS mail, plastic document sleeves for labeling (to protect against weather), and good packaging on the inside. The $7.50 is a flat rate, so all additional items are $0 extra for the buyer, even though I sometimes pay up to $27-odd for P&H, when the order vaue is above my risk limit, which happens on about 35% of orders.

Re: Anyone use subsidised post?

phorum_junkie* — Thu, 04 Jun 2015 10:27:34 GMT

On my store account I used to have free postage however I have started to add a less than cost fee of $5 which makes it possible to offer a discount for multiple items.

On my auction accounts I just use flat rate at cost plus a small handling fee.

Seems to work OK up until I closed down in April. Will see if it still works pn reopening in November.

Re: Anyone use subsidised post?

davewil1964 — Thu, 04 Jun 2015 12:06:03 GMT

I use parcel rates for parcels and 'free' post for letters. My prices are essentially dictated by what other sellers list for (excluding the race-to-the-bottom idiots) so postage, explicit or implict, is not a determining factor.

Re: Anyone use subsidised post?

saarzi — Thu, 04 Jun 2015 12:12:31 GMT

I do all of the above.

I use regular postage cost, subsidised postage and well as free post. It depends on the item and my previous experience with similar items with how well they sell and possible loss with returns.

My total price (item plus postage) is almost always the same anyway. So its really just about how I want to market the item.

Re: Anyone use subsidised post?

heihachi_73 — Fri, 05 Jun 2015 21:24:51 GMT

I use a flat $2.50 for all DVD-sized games. Some items are $1.40, others are $2.10. The buyer pays $1.10 for a bubble mailer when they pay $1.40 postage, otherwise they pay 40c if it was heavier than 125g. As of 1/6/2015, the Officeworks plastic bubble mailers are 85c in bulk, or $1.15 each.

Re: Anyone use subsidised post?

lane-ends — Sat, 06 Jun 2015 00:19:44 GMT

@heihachi_73 wrote:
I use a flat $2.50 for all DVD-sized games. Some items are $1.40, others are $2.10. The buyer pays $1.10 for a bubble mailer when they pay $1.40 postage, otherwise they pay 40c if it was heavier than 125g. As of 1/6/2015, the Officeworks plastic bubble mailers are 85c in bulk, or $1.15 each.

I guess what I am considering is that every parcel a buyer receives is obviously being charged (in their eyes) less than actual postage costs, along with the perception of cheaper postal component than other sellers, other than sellewrs who offer the free posty option their resultant higher item pricing (or at least pecetion of)

eg Flat $5 across the board where every "stamp" price is obviously above this. Marketing reason=value perception, Practical reason=allows for more transparent discounting for combining etc

My items have no market prices so item prices wouldn't be adjusted to accomodate this, it relies on improving sales to cover it

Re: Anyone use subsidised post?

digital*ghost — Sat, 06 Jun 2015 11:56:47 GMT

@lane-ends wrote:
I guess what I am considering is that every parcel a buyer receives is obviously being charged (in their eyes) less than actual postage costs, along with the perception of cheaper postal component than other sellers, other than sellewrs who offer the free posty option their resultant higher item pricing (or at least pecetion of)

eg Flat $5 across the board where every "stamp" price is obviously above this. Marketing reason=value perception, Practical reason=allows for more transparent discounting for combining etc

I haven't done that as a seller, but I've bought from sellers who price postage that way - that makes it difficult for me to comment on it though, because as a seller I look at what they charge, and look at what I know the minimum costs to them would be, so don't get an impression of things the same way a casual buyer would.

I can say that sometimes I look at cheap postage and feel more reluctant to purchase, either because it's an item I'd like to be packaged really well and discounted postage can sometimes give the impression of corner-cutting. Other times I hesitate because the item price is also low (i.e. underpriced) and these days I'm not inclined to feel guilty about taking advantage of a newby who didn't realise how expensive selling on eBay / postage is (wouldn't apply to you, obviously), or contend with a "whoops, I made a mistake with the pricing" etc, but at the same time, if the item price is reasonable (that is, doesn't appear underpriced), I'd be less likely to get any of those impressions.

In saying that, it has long been a theory of mine that there is a maximum percentage of the total price that a separate postage charge can be before even exact P&H can seem over the top or make the purchase appear to not be good value, just impression-wise.

By which I mean no matter how you look at it, once you price an item you are giving it value - not everyone is going to agree with that value, but if you take something and value it (in buyer's eyes) at $50 with $10 post, it's going to be conveyed as a $50 item, not a $60 item, which in itself gives a certain type of impression (can work for or against you at times).

If the actual postage cost is $25 though, partly subsidised by item price, and you list it the other way (i.e. $35 + $25 P&H), suddenly it's a $35 item, and fewer people may be prepared to pay $25 P&H for a $35 item. (It's the idea that "I can get the item for $35, so maybe I can find it with lower or $0 postage).

None of that probably helps much, though - in the absence of input from sellers who do price postage that way, I'd probably experiment with it and see how it goes.

Re: Anyone use subsidised post?

lane-ends — Sat, 06 Jun 2015 22:43:18 GMT

Perception is a complex issue when it comes to marketing. I know one of the things that grinds me about buying online is the appearance of paying $$ to AP rather than for an item.ie as you say paying $60 for a perceived $35 item.

Luckily I'm not thinking margins like that, it would be $5 for a prepaid satchel. Buyers would not know which size satchel it would be upfront. Only that all the other competitors are listed as typivcally $8+ or more expensive freepost items.

Add to that freepost for any additional items, and it could be appealing from a buyers persspective.

My items have no set market prices, its just what an individual is wilingl to pay. I list everything the same price and reduce until sold.