It sounds like we are in similar positions, at least in some respects - I sell in a relatively competitive market, with a lot of direct competitors here, but particularly in China, some posting tracked, many not, the vast majority of item prices between $3-$10.
I sent things untracked for many years, unless the order was high volume and / or value enough to require tracking (some people buy enough that I needed to upgrade to parcel shipping - this is important to mention as my business attracts a lot of repeat custom from buyers who purchase a variety of items most of the time, so it's not one $5 item with $6 shipping for them, it's anything from $20 - $2k worth of items with $6 shipping, so this played a role in my going over to tracked only, and not regretting it even when the impact on eBay was quite drastic to start with).
I made the choice to switch to tracked only shipping a few years ago, first on eBay as an experiment (because this site attracts the most price-driven customers out of everywhere I sell), and then I expanded it to my other selling venues. To make a long story short, eBay is the only platform where it made a noticeable difference to sales, everywhere else, not a lick of difference (in fact I ended up going tracked only on my website because orders shipping without tracking seemed like a foreign concept to my website buyers). Ultimately, I traded "Have you sent my order yet?", and "I haven't received my order yet" messages for "The tracking hasn't updated for 3 days" messages, which are thankfully considerably less frequent than the former two (in fact, I can't remember the last time I had an INR case on eBay, my spurious not as described cases dropped way off, too - make of that what you will lol).
Sorry for all the preamble, I just wanted to provide appropriate (maybe unnecessary ) context for my opinion on this...
eBay do everything they can to encourage sellers to use tracking, without taking that step to making it mandatory, because they do something very few marketplaces do these days, which is consult with, and listen to, the sellers on the platform (I know many sellers do not believe this, but they actually do, I haven't seen any other marketplace hold what are basically conventions for sellers to have their say about things, and a lot of the more seller-friendly changes the last couple of years came off the back of those), and many do not want to be forced to price their products out of the budget of their target customers, and have them purchase from overseas competitors where price + tracked postage can be less than the cost of postage here. As with any site policy where the site is populated by millions of different people, all with varying preferences and needs, ebay will cater to the the majority, which always means there will be sellers for whom those policies don't favour, however sellers having a choice is significantly better than not, JMHO.
Re: Amazon, I have noticed that in the categories I sell, not one single seller offers a product at the price I do. In my ebay store, I'll have 25pcs or 50pcs to a packet for a few bucks, all the Amazon sellers have 150-500pcs per pack, because it's the only way their prices can accommodate all the fees, tracked postage and so on, ultimately that means - in my categories at least - ebay and Amazon are catering to different markets. I am contemplating moving more towards this myself, because I feel like if I am opting to have much more expensive postage than many sellers, it will behoove me to have better value products for those who would rather buy in quantity, and leave the smaller purchases to the sellers who will sell untracked.
I also actually believe that Australia Post is doing this for eBay, gradually (mandatory tracked postage) with a lot of the changes they have made over the last couple of years. One of the reasons I switched to tracked only, is because I felt there may come a time where letters (tracked or untracked) were not going to be a viable way to send my products, and if I had an intermediate price (that is, between untracked letters and parcels) for a while, making the leap to parcel only would be easier. And Aus Post have definitely not allayed those fears, with dramatic rises in stamp cost, and severe reduction in service standards for letters (They now only deliver every second day, unless express or priority, which BTW makes a large tracked letter at full price + priority cost $9.05 so it can arrive in a similar timeframe to a parcel, but I can send parcels cheaper than that with My Post discounts...for now, but i digress... or maybe this whole post is a digression lol). Anyway, point is, untracked letters, non-priority letters are going to take noticeably longer to arrive in the coming months & years, and I fear further reductions in service standards, while online commerce is ever increasing standards, pushing for fastest possible processing and delivery times.
There may always be a place for cheap and slow(er) shipping - non-urgent purchases, etc, but I think most Aussie sellers whose business is their full-time job, are likely to be face increasing pressure to use parcel services for their merchandise, purely due to rapidly diminishing letter services, so you may get your wish eventually, just not in the manner expected.
