Coping with Canada Post's 2014 price increases

[snoopwiz]

Now that it has been a few months, how are you managing? 

Your U.S. sales down? Up? Same?

Your International sales down? Up? Same?

Have you switched to "free shipping" and tried to bury the increase into your item's sell price?

Found a work-around ?

[lady.stark]

I think it didn't affect my US sales that much. In fact, it probably helped them, because now, I can use Light Packet for up to 150 grams whereas the limit was 100 before. So I can ship more photos for about the same price.

My international sales are not very good though, because that is where the increase was most significant for the kind of items that I sell, which is mostly photos.

[rose-dee]

Since I use flat rate shipping, I haven't really changed most of my shipping prices since 2011, which means that every time Canada Post raises rates, I have to find a way to compensate.  

The past couple of months has been challenging, but  thank goodness the $Cdn has stayed low!  This alone has helped to offset some of the pain of increased shipping costs and allowed me to continue to offer low US shipping and free shipping within Canada on many items.  Most of my buyers are in the U.S., so I try to continue to accommodate them as much as possible with shipping.  As 'ladystark' mentions, the shift in weight categories has helped for some (not all) lighter items. 

International is a different story.  In spite of the recent drastic shipping increases I took the chance of leaving my existing shipping rates (2011 or earlier) as they were, but my international sales have still dropped off dramatically (actually since late 2013).  I have to wonder whether bad experiences with the U.S. GSP may have scared many int'l buyers away from eBay.com.  I doubt many int'l buyers go specifically to eBay.ca to shop -- although they'd avoid the GSP completely if they did!  How do we get them to come here?  That's the $64,000 question!

Personally I don't believe in rolling shipping cost into item price, either wholly or partially.  I find that concept just a little disingenuous, unfair to my buyers, and it likely won't do anything to help me stand out price-wise against my U.S. competitors.  Instead, I rely on a 4-pronged offset to keep my shipping costs down: TRS discount, lower $Cdn, lower FVFs on shipping by offering free shipping to Canada, and restricting the countries I ship to (to avoid defects and keep that TRS).  Since the majority of my sales are to the U.S., and I list in $US but pay for shipping in $Cdn, I do manage to chip off some of the increased Canada Post costs by these strategies.

My main worry is that there will come a point where the offsets just don't do enough anymore because of continued huge annual CP shipping increases.  The jump in International Light Packet Air was, if I recall, something like 26% this year -- how many years can anybody absorb that kind of increase?  In order to sell internationally now, I am having to "subsidize" just about every overseas sale by about 50%.  That won't be possible indefinitely.

I do have a "workaround" in mind for the upcoming year.  I admit it's probably only possible because of the unique nature of some of the items I sell, but the idea is to make my items smaller and lighter.  Of course that will have its limits too!  I've reduced the weight of many of my patterns by using 20lb paper rather than 24lb, by using 10pt font rather than 12pt, by switching to different (and smaller) packaging, so they will fit in a #4 bubble mailer, rather than #5 as previously.  I also plan to offer my patterns on CD, which will lower shipping and/or permit me to use free shipping.  I'd lover to offer my patterns as digital downloads (no shipping costs to anywhere!!), but eBay has made that so difficult and counter-productive that it's pointless to bother. 

Come to think of it, wasn't there a high school kid who recently won an award from the US government for suggesting use of a different font, thus saving tons -- literally - of paper and millions of dollars per year?   That's the sort of thinking you have to have to survive on eBay!

[photosalp]

All of my shipping is flat rate lettermail, and I'm oh so happy for that. May was dismal, but the year has been good, with June being VERY good so far. The postal increases don't seem to have affected me at all. I left my US rate unchanged (I think i was a little high to start with) I increased my Canadian rate a bit. My international rate I increased a fair bit, but it hasn't hurt me. So far this month I've had sales to Australia, Japan, Spain, Greece, Brazil, France, Singapore, and the UK. I'm trying hard to promote free shipping with $25 being my threshold, but the majority of my sales are below that. Since I only started selling seriously in December I can't say my sales are either up or down, only that I'm very pleasantly surprised with my sales. Al 

[rose-dee]

Ah, I see!  You're in the stamp business -- about as small and light as one can get. 

You're fortunate to be able to use lettermail for most shipping.  I tend to have a lot of items of different shapes, sizes and weights, so shipping is always a challenge, but I'm hanging on so far -- not ready to throw in the towel just yet!  

[photosalp]

Yeah, I fell into that by accident and it was a very fortunate accident. I think about getting into other categories, but then I remember the stories I hear from you folks about shipping woes and go back to my stamps. 

[deeeight]

What gets me is that no matter how many PARAGRAPHS you devote in your description to why your shipping is what it is, you constantly still get buyer questions where its pretty obvious they didn't bother to read ANY of your description at all. I put in

"Whatever US Postal or Royal Mail or some other countries's postal services charges for a similar size package means nothing to me"

And I get people quoting me rates that royal mail or US postal charge for whatever service level they think is appropriate to the item... even though it clearly says the item is located in canada.

[rose-dee]

Why say anything at all?  Those kinds of disclaimers and explanations don't serve any good purpose aside from making the seller sound slightly enraged and negative -- a turn-off to many buyers. 

I can't see why you would charge $17-20 for tracked shipping on items selling for around $10-20.  The rare time you'd get a chargeback or outright fraud might lose you $10-20, but in the meantime you may be losing a lot of potential customers (who might also be looking at the negative and neutral FB you've received that relate to shipping issues). 

Why not provide much clearer descriptions about the items themselves and better packaging, boxes, but charge less for shipping, since it looks as if most of the negs/neutrals you've received had to do with broken or poorly packaged items?  Buyers paying $15 or $20 for shipping an inexpensive item are going to expect perfection. 

For example, in your item #23124303, the description is 5 very short point-form lines, whereas the disclaimers and explanations about shipping are 4 long paragraphs. 

It's just a suggestion you can accept or reject, but I would make the actual descriptions of the items the biggest and best part, remove everything that explains or excuses shipping rates and services or the feedback system, drop tracked shipping for anything under about $50  -- use Light/Small Packet Air to the U.S. and internationally, and oversize letter-post wherever possible for Canada -- and I'd bet you'll increase your sales and avoid nasty FB. 

If you make your shipping costs competitive you'll probably also find you'll have far fewer questions and "sticker-shock" from buyers wondering why the shipping is so high.  To my mind, the fact that so many buyers would be contacting you about the high shipping costs is in itself is a red flag that should merit a seller's attention -- obviously those buyers are interested in the items, but are basically telling you they'd make a purchase if you did something about the shipping. 

You're right that many buyers these days don't read descriptions, but I think a lot of them will read descriptions if they're attractive and interesting.  I think part of our job as sellers is to encourage them to do that, i.e. entice buyers to "get into" the listings and make an informed purchase.

[pjcdn2005]

I agree with rose-dee's comments. Some of your shipping is too high and buyers do not want to read paragraphs about shipping and feedback....it is very negative and frankly...buyers don't care. 

You would be better off to use small packet for lower cost items. Very few people will want to pay $10 for an item and then pay double or quadruple that amount for shipping and..it really isn't necessary to charge that much.

[lady.stark]

I totally agree with Rose excellent post and would maybe add this comment about the items that arrived broken... why ask for a return? I would just ask for photos of damage and refund. Moreover, if you shipped with tracking, there is $100 insurance included... you can get your money back that way...

[deeeight]

You folks can sell however you like, and I'll sell the way I like... I'd rather the smaller number of buyers who appreciate speedy delivery and can read the descriptions over the ones who cannot read and want everything as cheap as possible.

As to the feedback... one of the buyers played every excuse possible and among them were...

"he's a disabled veteran..."

"he cannot afford to pay return shipping"

"he thinks I'll just resell damaged items to other buyers"

since the items were collectible toys... of which there's no unique identifying marks and they made millions of, there's no way to verify the "damaged" pieces were actually the ones I sent... and not damaged ones he already owned and was seeking to replace. Lots of fraudelant buyers on ebay, and he couldn't obviously use an item not received claim for stuff I shipped with tracking and speedy delivery. He tried extorting 50% refund for 10% damaged items. Also he magically had a camera handy to take pictures of the contents as he opened the box because he claimed it arrived with a big hole in the box... but never provided a picture of that hole in the box. In order to cause the damage in the photos, you'd need to shove a crowbar thru the box (or the fork end of a forklift), and no amount of bubble wrap would have protected them at that stage and how exactly am I responsible for something the post office did?

As to why ask for a return... well in one item's case... where I did make a description error...the damage was something i could fix... myself...if I had it before me, in 10 mins... but the buyer wanted a full refund AND to keep the item, ebay told him HE had to return it for a refund, and he refused so they reversed his claim. In others, well in the real world if you don't like something you have to return it to a store for a refund, and this is the same in the online world. You folks might see it as simpler to not have principals and integrity and think feedback is everything but all you're doing is encouraging ebay to not stick up for sellers.

[rose-dee]

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@deeeight wrote:

You folks might see it as simpler to not have principals and integrity and think feedback is everything but all you're doing is encouraging ebay to not stick up for sellers.

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Well, I would say that on eBay, sticking firmly to principles despite everything will only generate defects, and that will eventually affect one's selling ability. 

EBay owns this site, and eBay determines what principles are acceptable where seller/buyer relations are concerned.  A seller is free to disregard those rules if she/he chooses, but in the end it won't create any advantage. 

Personally, I don't focus on feedback, I focus on making every customer as happy and contented as I possibly can, hoping that person will think of coming back to eBay (and buying from me again).  Not every rule eBay sets down would be something I'd do if I were selling from my own site, but being here, especially as a lower volume seller, means I can either comply and do well, or "fight City Hall" and find myself downgraded in seller status (and losing sales as a result).  What would be the point?  I simply feel that there are ways of making customers happy while still maintaining honesty, integrity and good business practises at the same time. 

I grant you, there are nasty buyers out there who are inevitably going to turn up, but by treating issues with such a buyer as a business loss, built into your selling strategy, rather than as a personal affront, you can deal with them more or less summarily in your own best interestsand move on.  If that means refunding a buyer even though you know he/she may be lying about damage, I would do it.  The damage (not to mention the stress) that might be created otherwise just isn't worth it. 

It's enlightening to actually sit down and figure out what percentage of your overall annual gross sales is actually represented by losses caused by fraud or scams.  If it's less than 5%, how much of your time and effort are they really worth?  Choose to fight the ones you know you can win -- i.e. the ones where eBay will stand by you (by removing defects, for example).  If frauds/scams are causing more than a 10% monetary loss per year, then it may be a good idea to evaluate why that's occurring -- is it the type of item that's attracting a lot of unscrupulous buyers, for example?   Some categories do seem more susceptible to fraud.  Or is it something else that you're able to change?

You may be mistaking integrity and principles for a certain type of stubbornness against eBay that won't work in your favour in the long run.  This is especially true with the new defect system, where those numbers can add up quickly for smaller volume sellers. 

[pierrelebel]

"Coping with Canada Post's 2014 price increases"

In 1969 it cost six cents to mail a letter (one ounce) anywhere within Canada.

Today it costs eight-five cents to mail the same letter (now 30 grams) within Canada.

So postage cost went up fourteen folds.

Then the minimum wage was fifty cents an hour, it is now over ten dollars - twenty folds.

However, when it comes to shipping parcels, even small parcels, the increase is out of this world.

A small box about 10" x 5" x 2" with a weight of about twenty ounces cost about $12 to mail from a large centre in Eastern or Central Canada to anywhere from Winnipeg to the Pacific ocean.

Back in 1969, you could mail that parcel from Toronto to Winnipeg for - are you ready - seventeen cents.  That is right $0.17.

Mail order (direct marketing) has never been easy in Canada.  However the current fees charged by Canada Post for small parcels for domestic shipping make it almost impossible for small business to survive.

[rose-dee]

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@pierrelebel wrote:

"Coping with Canada Post's 2014 price increases"

Back in 1969, you could mail that parcel from Toronto to Winnipeg for - are you ready - seventeen cents.  That is right $0.17.

---

Since I can't recall myself what postal prices were then, I'll have to take your word for it -- but that's almost incredible!  However, those were the days when people would think nothing of going for 4 or 5 hour "Sunday Drives" -- the price of the gas was the least concern.

I do remember that in the early 1970's, a mere $15.00 was enough to buy a week's groceries for one person.  How soon we forget.

Sadly, because of CP's ever-increasing parcel rates, many items just aren't feasible for smaller sellers to offer anymore, which does contribute to making eBay a less interesting place. 

One problem I face constantly is trying to make sure many of my items will squeeze through that 2cm slot.  If Canada Post ever reduces that, effectively bumping all such items into a higher rate class, I (and I'm sure many other sellers) will be in serious trouble.

[the_d_consortium]

I don't know where you got your numbers pierrelebel,  but I recently did a search for the minimum wage in 1970 and the return was $1.50.

I look at the price increase at Canada Post as a major factor of inflation. All those banks sending out your credit card bills, need to recoup the funds etc

They do it because their costs are higher energy wise, they cover a huge land mass with a small population.

The only saving grace is the lower Canadian dollar that still can not compete with the 13 cent oriental dollar.

Nothing you can do about it until the dollar is worth a dollar world wild.

My solution, list the rare and unusual and the buyer will not give a flying fig about the shipping rates.

We could start a class action suit against Canada Post and their illegal activities of charging fuel surcharges that effect international trade, but they are already in the red from poor business choices and it would do us no good. We own 51% of Canada Post we are all responsible for it's actions.

When they did away with small packet rates in Canada I took action, got up in the face of the brass, but no one else did, so they got away with it.

Major shippers cart their stock across the boarder and Canada Post lost a major share of that business as well as the income from money orders after the hostile take over of payment options on eBay. CP had no idea they where losing that income until I contacted them. They just spit back eBay's rhetoric at me, nothing I could do after that.

Ebay.ca needs Canada Post, why didn't they stand their ground?

Now they are going into the banking business. That's a big joke. You can't even cash an insurance refund check at the post office!

I've actually though about changing the free shipping on my items that fit through, "the gauge of death." (so called because if doesn't fit your wallet take the hit.) It will save on paperwork, make my initial price more competitive with other sellers who add the shipping. I don't think a lot of people have figured out how to sort by, lowest price and shipping first. 

All that really doesn't matter, if the buyer wants the item they will pay the rates. One should not think about the buyer as shopping the same way that those of us on a limited income shop. 

I've often got better results by putting the price up then putting the item on sale.

There is a reason why one can sort by highest price first. 

It's called snob appeal.

[pierrelebel]

"I don't know where you got your numbers pierrelebel,"

Any decent philatelic catalogue will tell you exactly the cost of mailing a domestic letter (first class) within Canada at any time in the last century.  I use Unitrade - universally accepted by all Canadian dealers and collectors.  Does that answer the question.

To suggest as you do that postal rate increase contribute to inflation in Canada contradicts how inflation is measured:

http://www.bankofcanada.ca/wp-content/uploads/2013/10/wp2013-35.pdf

When you look at the big economic  picture, a postal rate increase may end up costing the average Canadian a few dollars a year, largely irrelevant when matching the amount to the average $50,000+ spent on average by a Canadian family (of course those with lower income spend less).

[the_d_consortium]

I was speaking of the minimum wage of 1970 not the postal rate.

You're not seeing the whole picture, Canada Post is a major cog in the wheel of commerce. When they raise their rates all other rates go up to compensate. (Actually energy/oil and gas is the driving force of inflation, Canada Post is trying to compensate for energy rate hikes.)

Big business is bottom line myopic and if they are spending more for shipping and mailing, so are you.

So are our customers. I suspect they know this and if they can't afford the rates then they need to funnel their funds over to the orient and add to the unemployment in NA. 

We are in a catch 22 situation. I have to shop at the Oriental junk stores because I can't make enough money with the oriental 13. cent dollar taking the lion's share of the market.