topic Re: Shipping charge strategy in Selling

Shipping charge strategy

***www.amber-moon.com*** — Tue, 04 Jan 2022 09:28:47 GMT

This is probably not a new or rare subject here, but I'm hoping for some ideas from more experienced sellers.
We're selling mostly flat and unbreakable items that we could charge ~$10 for, and our typical buyers would normally need several different types of these products. So it would be a good idea to incentivise them to buy several in one order.
We'd like to offer free shipping to make our listings look more appealing, not least on Google shopping, so we priced them ~$12 and sent them as untracked letters for a while. That generated good sales but also many lost shipments and emails from ebay asking to only send tracked. Now we went back to eparcel and increased the price to cover the extra costs and the sales went down again. we could offer the products at $10 and charge shipping at cost which would suit buyers that buy multiple items at once and only pay one shipping fee, but then our listings would not be "free shipping" listings any more.
Questions: has anyone gone to the trouble trying every possible scenario and worked out the perfect balance of price and shipping charge?

Re: Shipping charge strategy

davewil1964 — Tue, 04 Jan 2022 09:45:36 GMT

Short answer - no.

Anything that will go as a letter gets 'free' shipping. Anything that doesn't, gets parcel rates explicitly advised.

You've been a member for over 20 years; surely you have worked out what works for you.

Re: Shipping charge strategy

digital*ghost — Tue, 04 Jan 2022 10:18:17 GMT

There is no one perfect model that will be translatable to every kind of business, it's really just trial and error until you find what works best for you, though if you are purely looking at balancing postage costs with item prices, I would look at making the postage cost roughly 25% of the item price ideally (I don't do this myself, for reasons explained below). eg If an item is $10 and postage is $8, then I'd probably make it something more like $14 with $4 post, with price discounts for multiple purchases, worked out however which way best suits, and assuming $14 wouldn't be too high above market value.

That being said, since letter-post is something you can use for your items, have you looked into pre-paid tracked letters? I like buying those on eBay when I can get a discount and it will at least mean overall cost to the buyer can be lower than with parcel rates.

I do flat rate shipping, myself, which is charged at tracked letter rates, and my items are low-value, which in some cases means my postage cost is twice that of the item cost (they range from a bit over $3 up to around $10) - most of my orders are multi-quantity, though, so this model suits. My postage charge was changed from untracked letter rates a fair while ago, and yes it had a noticeable impact on sales here, but not as much as I feared so I have kept it (it had no impact on sales volume elsewhere, only on eBay, and it took 4-6 weeks for sales to bounce back). Free post has never worked for me, even when total purchase price was less than what I previously had for item price + postage; in my case, people will pay $5 for a $5 item and $6 to have it posted, but they won't pay $11 for a $5 item, if you know what I mean.

You might even be better off with a different strategy all together, though - eg free post but combined discounts for multiple purchases, which you can set up through "Promotions" (via the Marketing tab on your home page), and / or through listing specific volume discounts.

Re: Shipping charge strategy

bmanly3 — Tue, 04 Jan 2022 13:00:03 GMT

What I do sometimes is offer both. Sometimes a buyer will type in what they are looking for and then they can sort the search for the lowest price or lowest price with postage included.

If the lowest price only search is done then the item not including postage always come up as the cheapest available. Others will search for lowest price/with postage which is smarter because that will represent the end cost all up.

So what I will do is have two different ads, say $10 + $6 tracked postage and the other saying $16 including free tracked postage. Both are the same price and covers both search criteria.

If selling multiple items that are the same then I would probably go the $10 + $6 postage and on the listing I will say something like "no extra postage costs for multiple items" that can work sometimes too. Good luck!

Re: Shipping charge strategy

***www.amber-moon.com*** — Tue, 04 Jan 2022 15:12:20 GMT

20 years!! how time flies

Re: Shipping charge strategy

***www.amber-moon.com*** — Tue, 04 Jan 2022 15:18:21 GMT

thank you for the extensive reply.

I do offer discounts for multiple purchases on each listing, but that is only for he same product, and what byers usually need is multiples of different products. How would you use "Promotions" for this?

Re: Shipping charge strategy

***www.amber-moon.com*** — Tue, 04 Jan 2022 15:19:38 GMT

so what you suggest is to create 2 listing for each product and apply different shipping charges for each? so as to target both types of buyers?

Re: Shipping charge strategy

bmanly3 — Tue, 04 Jan 2022 19:09:11 GMT

@***www.amber-moon.com*** wrote:
so what you suggest is to create 2 listing for each product and apply different shipping charges for each? so as to target both types of buyers?

Yes, if you have multiple items the same why not? You can't really do it if you only have one unique item as both sales might come in at once and you can not full fill one. I have found some buyers are obsessed with free postage, even though it isn't free at all. Others are obsessed with the lowest price. So by offering one sale of each it covers both. I have done it multiple times and sometimes it works. It doesn't break any rules and I never get anywhere near my ebay selling limits. Anything is worth a try, sometimes I just sell a lots of 2/3/4 or 5 as well. It just gives the buyer more choice that's all.

Re: Shipping charge strategy

digital*ghost — Tue, 04 Jan 2022 21:43:35 GMT

@bmanly3 wrote:
It doesn't break any rules

Just to let you know, AFAIK it technically it does, though it's not policed all that much - eBay has a duplicate listing policy, the bots just tend to not pick it up if there are enough technical differences between each listing (like pricing). You can have multiple listings for identical items if there are significant differences, eg they are offered in different quantities (200pcs in one listing, 500pcs in another etc), but if there are no real differences at all (one having free post and the other not is not considered a significant difference - at least, they used to state this explicitly, though don't on the current policy page), so while it can go through and be listed, there is still potential for one of them to be picked up.

https://www.ebay.com.au/help/policies/listing-policies/duplicate-listings-policy?id=4255

Re: Shipping charge strategy

bmanly3 — Tue, 04 Jan 2022 21:51:50 GMT

Thanks!

Re: Shipping charge strategy

p9games — Tue, 04 Jan 2022 23:04:36 GMT

I sell trading cards which can be shipped nicely in envelopes. I do free freight on everything, and factor freight costs into each item. Often people will order multiple items, 5, 10, 20 or more. I occasionally track my effective postage cost per item based on the mix of orders I get.

My listings offer tracked postage free for orders over $20, and express for over $200. Express and Tracked are options at the buyers expense if they want. About 3% to 5% of orders the buyer pays for Express, and a lower percentage upgrade to tracked (even on orders over $20, it seems nobody actually reads listings)

In terms of lost shipments my rate of lost, untracked items is lower than 1 in 500. Most of my orders are to repeat customers (about 80% of my orders each day are from existing customers, with 20% coming from new customers). I think this helps cut down on fraudulent INR claims. If you're getting a materially higher INR rate on untracked items I'd say people are scamming you

Re: Shipping charge strategy

lezned-toycollector — Tue, 04 Jan 2022 23:41:57 GMT

About 3% to 5% of orders the buyer pays for Express, and a lower percentage upgrade to tracked (even on orders over $20, it seems nobody actually reads listings)

This type of thinking really astounds me. I always ponder if such people expect others to pay for their groceries, or their car rego, or power bill, or phone bill, etc..

Why do you think a buyer would want to upgrade their shipping to include tracking? They are already guaranteed a full refund if the item doesn't arrive.

Tracking is for the sender's benefit - not the receiver's. So I'm not surprised so few of your buyers offer to pay out of their own pocket to provide you with a service.

While selling, whenever tracking is used, the cost comes out of my pocket - and rightfully so. There's no way known that when buying something, I will ever pay more to use tracking. If the seller wants the service, they can pay for it themselves.

Re: Shipping charge strategy

digital*ghost — Wed, 05 Jan 2022 01:24:27 GMT

@lezned-toycollector wrote:

Tracking is for the sender's benefit - not the receiver's.

If that were true, no buyer would ever send a message that asks for a tracking number, in cases where none were provided. There would be no point in My Post accounts for buyers, and no options for them like redirection and holds. No way for them to contact the delivery service themselves and say "what's going on here?" etc, which is always faster than asking the seller to do it.

Most buyers do think what you have outlined - "I don't need to pay for an upgrade to tracking".....until they want to do something that requires a tracking number, which usually doesn't occur until after they've defaulted to lowest price / postage costs.

Others just assume tracking is default on all orders, no matter how much postage costs, and then are surprised when they get told it was sent untracked (I encountered this more on my website than I have on selling platforms, though - when the default option there was untracked, I'd get messages such as "what's the tracking number?" because the idea of buying from an online business and the order not having tracking had just never occurred to them, and my shipping was $3 lol, with it made clear it was an untracked service.

BTW, I had a lot of buyers upgrade to tracking when I offered untracked, too (wasn't very common here on ebay, though, more on my website and the other E site) - I assure you they weren't thinking about me when they did that, though, just like they don't think about me when they choose express.

Re: Shipping charge strategy

bmanly3 — Wed, 05 Jan 2022 19:28:12 GMT

@p9games wrote:

My listings offer tracked postage free for orders over $20, and express for over $200. Express and Tracked are options at the buyers expense if they want. About 3% to 5% of orders the buyer pays for Express, and a lower percentage upgrade to tracked (even on orders over $20, it seems nobody actually reads listings)

In terms of lost shipments my rate of lost, untracked items is lower than 1 in 500.

When I sent my orders untracked mine was similar, I only had around 2% convert from untracked to registered or express. There is nothing like the free ebay guarantee that you will receive your goods. I also found that when items were late, then that was when the buyer asked for the tracking number, only when needed.

I decided to sell everything with tracking now just to be sure but it can be the difference between getting a sale or not as the overall cost is higher. For similar products from several sellers a lot of buyers only care about what is the lowest price, some have even told me that through the messaging service.