Tracked Postage on Low Value Items - Experiment

[digital*ghost]

For various reasons I've decided eBay will be the guinea pig for trialling tracked postage only, starting from tomorrow (my shop has been closed over a week, so this will be interesting) - I'm posting about it here because a lot of my items are low value ($4-$7), and just thought there might be some sellers with similar business structures who could be interested in the end results (whether it be a success or failure etc), in which case I'd follow up in a few weeks, and again in a few months. 

If there's any specific info or stats someone would be interested in knowing, let me know so I can keep track of it. 

A couple of things to note, in case it puts any subsequent info I post in the right perspective, while I do get a lot of single-item purchases, the core of my business is multi-item purchases from repeat customers; which is something I expect would make the higher postage cost a little easier to take (postage is going from a bit over $3 flat rate to a bit over $6 flat rate). 

I've also set up a discount for orders of $50+, so this may have an effect on some of the changes in buying patterns (if I still get any sales, anyway  ).

Lastly, some of my buyers are quite aware of the other platforms I sell through, and I won't be making any changes on those as yet, so this may result in decreases on eBay, but increases elsewhere (if I detect a significant pattern of that, I'll note it here when I update for anyone interested in that kind of stat). 

If no one is interested, all good, and we can carry on as though you din't see nuthin' here. 

[countessalmirena]

Strengths and Limitations

Strengths of this study include the ability to compare buyer-driven behaviour in a common but meaningless adverse purchasing behaviour outcome in a cohort of over one million eBay buyers for whom postage and delivery cost is occasionally covered by the seller. Despite potential challenges with perceived value-for-money, use of tracked postage ensured that 62.4% of buyers purchasing from the control seller in 2021 dating from the beginning of the study chose at least 1 other item (added value item referred to in this study as aV1) and 22.3% of the control seller's buyers contacted the seller before delivery asking for additional bundled item offers.

The study is limited by the buyer motivation nature of the examination, although our large sample sizes and universal ascertainment of deliveries may reduce potential selection bias in our primary analysis.  For buyers with high-risk feedback or transactional complications, stalking of their social media was performed on a buyer-level basis by faculty socmedists in the Buyer Behaviour Clinic of the University. We acknowledge selection bias which informs the cancellation of a small number of transactions.

(Academic nonsense deeply pleases me...)

[digital*ghost]

I just wanted to post a quick general comment for here and now, to thank everyone for their interest, responses and input so far - it's definitely appreciated.

Just as a point of interest, I mentioned my Etsy sales are slightly down at the moment - I still have the cheap untracked postage option available there, and I noticed that the percentage decrease is almost identical to eBay's, which is interesting (if not conclusive of too much). 

[everard6920]

With the end of JobKeeper and the Coronavirus supplement, I'd imagine that many people are tightening the purse strings so I wouldn't read too much into that.

Mine are also down a bit, but April is almost always my worst month of the year.

[digital*ghost]

I just meant that my current drop in sales on ebay may not be related to the change in postage at all.

i.e. According to my stats, the drop on Etsy, where postage is still $3, is 32%, and the drop on eBay is 38% (compared to same time last year). Nothing about that is conclusive, but at least suggests there's a possibility that the higher postage is actually having very little effect on my current sales volume. 

[beautbots01]

digi are you aware that the option for buyers to pay with Paypal has disappeared from a number of Australian and Canadian shops on Etsy.  Lots of debate going on about this glitch atm on the forums.  Could be causing a big sales dropoff at Etsy.

[digital*ghost]

Yeah, super annoying and right now the only solution being provided by Etsy is for each affected seller to contact them and they'll shift them over to standalone PayPal like it used to be until resolved, which suggests that they have NFI when it will be fixed, or if they do, they know it won't be any time soon. Interestingly, if the currency is set to USD instead of AUD, PayPal suddenly becomes available again, but this causes a whole set of other problems (unnecessary conversion fees, potential foreign transaction charges if funded by a card etc). 😣

The percentages above are for the full month so don't include much sales data from when this started happening, but it does appear to be throwing a spanner into the works. 

[beautbots01]

When it started is still to be established.  Accordingly another Australian seller (posting in that forum) they sorted the problem out a while ago and it took "a couple of days" to sort out with Etsy.  So it appears to have been just stumbled upon when a buyer contacted seller saying that Paypal was not available for purchase.

[digital*ghost]

So, it's been a couple of weeks since I've posted on this, and a full 5 weeks since reopening with tracked postage, which means my stats for the last 30 days (and year on year) paint a bit more of an accurate picture of what's happening (since it no longer includes the 10-day closure I had before updating everything). Spolier tag for current mood and assessment, but it is still subject to change at any time  😁

Spoiler

issok

Ok, so the reality of the situation is that sales did take a hit, but certainly not as much as I feared (the only other seller I know who has done similar, took an 80% hit to sales immediately), and some buyers have continued to purchase through eBay even though I know they are aware of my other platforms (some have purchased from the website / Etsy instead, too).  To be honest, one of the biggest surprises for me is that so far, not one person has queried why postage is "so high", which I was genuinely expecting to get at least a couple times a week. 

Quiet days are much more stark, if you will - in that previously, on a quiet day I might only have 5 - 10 sales, but now there's been a couple of days where I only had 2-3; however busy days are pretty much as normal (i.e. no discernable increase or decrease in quantity of orders, or average order value, however the discount I set up for higher value orders is starting to be utilised a bit more so average order value may start to climb over time - likely thanks to fixing the postage issue from a couple weeks ago, however I still get 1-item orders where postage is higher than the item price, just not dozens of them like I used to on busy days - I'm actually pleased with this result). 

I feel like some context would probably help a bit here, so that the impact has a bit of meaning - current 30-day revenue is sitting at around 25-30% of what I consider my "normal" average, and 50% of the average I achieved during the peak of covid lockdowns etc, but it is still in the multiple thousands ( without getting too divulge-y, that means turnover for the last 30 days was more than 2k, less than 10k 🤣 ).

Both my website and Etsy are slightly down, but interestingly, they're neck and neck for the top spot over the last 30 days (there's like a $150 difference, with Etsy just sneaking ahead) and they are also, funnily enough, right where my normal eBay average was, but I think Etsy is the fairest comparison because A) I have a lot of items on my website that are not available on either eBay or Etsy, and B) postage jumps up to tracked only on the website when package weights reach a set minimum, while Etsy has the same postage set up I had on eBay, except that I also ship internationally there (average order spend, BTW, is significantly higher on the website than the other two). 

Etsy was actually starting to beat eBay a lot of the time in terms of average revenue, so I feel like this trend may have continued to happen whether I introduced the tracked postage on eBay or not, and I am also having some starkly quiet days over there, so patterns are very similar, regardless.

A quick, and preliminary, pros & cons list for doing this - some of these would obviously carry more weight when making a final decision, lol, and a few of these will overlap with other points - I'll probably think of a bunch more as soon as I post this, but the first things that come to mind:

Pros	Cons
Having tracking for every order is great peace of mind	Entering tracking for every order is a massive PITA (most go as medium tracked letters)
More time to invest in other areas (particularly in building my website)	Lower revenue
Less trash build-up (really hate coiled tails of stamp rolls that somehow end up all over the place 😆)	More paper wastage in the long run because I put bubble mailers in the envelopes anyway (unsealed so they can be reused, at least)
$0 loss on late / missing orders, not even any enquiries so far (I'll jinx myself now lol)	Much higher outlay to pre-purchase enough envelopes to last at least 2 weeks at a time
Lower gap / shortfall between upgrading from letter to parcel when needed	Longer pack time, especially as I tape around the sides of the medium envelopes - ok when you're doing a couple, less ok when you're doing a couple dozen

[katistrophik]

You know me, the data stuff makes my eyes glaze over, but I have picked what I understand.

CON > More paper wastage in the long run because I put bubble mailers in the envelopes anyway (unsealed so they can be reused, at least)  Could you use scrap paper/tissue ? rather than bubble mailers

CON > Much higher outlay to pre-purchase enough envelopes to last at least 2 weeks at a time  If this became a permanent thing would Bulk buying assist in lowering costs?

CON > Lower revenue  Could this also be attributed to the changes at eBay ATM?

Not a business person in any sense of the word any more, and certainly not on eBay, but just pondering

[digital*ghost]

The bigger outlay is because I buy in bulk - i.e. sending mostly untracked letters meant spending $220 on average per week for stamps, and I had a small stockpile of tracked letters plus paid for parcel postage as needed.

That $220 covered up to 100 letters, but to have enough envelopes to send 100 tracked letters means spending $446+ (I use a mix of medium and large - 50 medium are $223, 50 large are $268, with no further discounts for higher quantities (I normally buy 50 large and 50 - 100 medium at a time). This isn't actually a big issue for me (by which I mean I don't struggle to find the funds each time I need to purchase a new lot), but I put it in cons as I figured it might be something useful for someone else to weigh up if they were thinking about adjusting as well (i.e. if cashflow is a problem sometimes, it'd probably be more manageable to switch to parcel post for the PAYG option). 

The bubble mailers serve a couple of different functions - they protect the items a bit, but also keep everything in place, so they don't move around as much and bunch up during transit. None of my buyers should ever be charged extra postage as I lodge them over the counter, but the less movement the better - ideally Aus Post would introduce an option to purchase tracked letter labels via My Post and I could just affix one of those to my own packaging, but I don't know how likely that would be.