Seller Blog

Change to success fee calculation – what it means for you

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The way we calculate success fees for ‘in-trade’ sellers is changing. From 14 March 2018, in-trade sellers will be required to pay success fees on the final sales value (the price of the item sold + shipping costs).

Why are you making the change?

We want this fee restructure to encourage more in-trade sellers to give Kiwis a better deal, by offering free or low-cost shipping. Our research shows that buyers perceive shipping costs on Trade Me to be expensive, which can create a barrier to purchasing or lead to buyers abandoning a sale. We also see some listings with inflated shipping costs and this results in a poor experience for buyers.

It’s widely recognised that consumers seek free shipping when purchasing online, and offering free shipping has been seen to increase sales.

This change is also consistent with payment methods like Pay Now, Ping and Afterpay, where the fee is charged on the final sale value.

When does this come into effect?

Success fees on the final sales value will come into effect on 14 March 2018 for in-trade sellers, so any listings created or relisted from this point will be charged on the price of the item sold, plus the shipping costs.

Any listings created up until 11:59 pm on 13 March 2018 will be calculated and charged at the current success fee rate, even if the item sells on or after 14 March.

This is going to affect my business – what are you doing to help sellers?

Even though there are currently over a million listings offering free shipping on Trade Me, we understand this is a big change for a lot of our sellers. Therefore, we’ve tried to add value elsewhere with some discounted offers and new features – just for our in-trade sellers:

  • We’ve introduced the Gold Trade Rebate to reward the sellers that actively strive to improve the buyer experience. With each listing that meets our criteria you’ll get 10% off the success fees. See our Gold Trade Rebate blog for more information.
  • Building on the strong partnership we’ve developed with Fastway Couriers, we’re excited to let you know that from today they have discounted our already reduced ‘book a courier’ rates an additional 10% for all in-trade sellers. For sellers that use a different courier booking system, Fastway Couriers are happy to discuss a personal solution for your business and can be reached directly on 0800 4 fastway.
  • We’ve recently opened up multi-variant listings to Tradevine and other API users, which will remove the hassle of waiting for a buyer to email with their size/colour choice, and reduce the number of listings you pay high volume listings fees on.
  • With over 50% of Trade Me’s traffic coming from a mobile device, we’ve also been investing in our apps. In the coming weeks we will have Trade Me Stores featured in the iOS app, so your buyers who like to shop on the go see the very best version of your business.

What if I don’t know the shipping costs at time of listing?

We understand that some products are large or awkward to ship, and a bespoke shipping rate needs to be provided.

For in-trade sellers where it is difficult to determine the cost of shipping an item, due to the nature of the item, we have provided an option to choose “Bulky/overweight freight (custom quote required)”. It will still appear as “To be arranged” to the buyer on the listing.

We expect sellers to use this functionality appropriately, and not choose it for things such as mobile phone cases or dresses. We’ll be monitoring usage of this to ensure it is not abused. It’s also worth keeping in mind that listings without specified shipping costs are less likely to sell, so we’d always recommend trying to get a quote for shipping where possible.

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Does this mean I can add the shipping costs to the Buy Now price and offer free shipping?

Simply transferring the cost of shipping and adding it to your Buy Now price is not ‘free’ shipping, as the buyer is still paying the shipping costs. We do not recommend this – it’s misleading for buyers and a breach of the Fair Trading Act.

We suggest you rework your product pricing structure to offer free (or low cost) shipping on the items you can afford to. Read on for some more tips on how to incorporate free shipping into your business model.

How will success fee refunds work?

When a trade doesn’t go ahead as planned and you’re applying for a success fee refund, the process will work the same way as it does now.

  • Apply via the site for a full refund of your success fees. This will include fees paid on shipping.

Remember, you only pay a success fee if your item sells, and the total success fee is capped at $149 for in-trade sellers. The 15% Top Seller discount will also still apply to the full success fee charged.

How to make free shipping work for your business

Someone has to pay for the cost of shipping. The big question for any online retailer is how to offer free shipping to their customers, whilst balancing the expense to their business.

Here are some ideas to make it work for your business:

  • Factor free shipping into your operation from the moment you buy inventory and include it in your financial models. Yes, it will cut into your margins, but think of it as another marketing expense – a tool to attract more sales. The return on investment should stack up.
  • Shout it from the rooftops – “Get free shipping here!” Customers love it, but they need to be made aware of it too, so mention you offer free shipping (and any other unique selling point of your business) in your listings to attract buyers. Marketing this perk will reduce potential sale barriers and help you stand out from other sellers.
  • Pick a few products that you have healthy margins in and offer free shipping on those. You don’t need to offer free shipping on everything.
  • If you have a fairly standard product line, for example you only sell mobile phone cases, then flat rate shipping could be the way to go. It’s not free shipping, but at least the simplified shipping costs of “$2 anywhere in NZ” for example, will be easier for buyers to digest. Just be sure that you’re not drastically over or under-charging your customers.
  • Finally, online retailers can reduce overheads by negotiating preferential shipping rates with courier companies. We offer our ‘Book a courier’ service for reliable, low cost, competitive shipping within NZ. Again, free shipping is what buyers really want, but if you can’t offer it on all products, then ‘Book a courier’ may work for you. Our partners at Fastway Couriers are also offering an additional 10% discount off their Book a courier rate, for all our in-trade sellers.

New free shipping banner

Another benefit of free shipping is the updated free shipping banner in search results, shown below. We’ve recently changed this banner so that listings offering free shipping (selected during the listing process) stand out to buyers.

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Free shipping – it’s your call

At the end of the day, we can only tell you the facts about free shipping: that it can reduce abandonment rates, increase average number of items in the cart, and increase the average sale price of an order* – but it is up to you to decide which shipping model is right for your business.

Your customer’s experience when they buy from you is paramount, as it’s what makes them return time and again, and recommend you to others. Free shipping is great for your buyers, but remember it’s equally as important that shipping is still reliable and offers tracking. It really is worth the extra investment in using a quality shipping service, and you may be eligible for the Gold Trade Rebate.

We hope you can try out free shipping, and in the long-term see the pay-off by generating more loyal buyers and customer advocates.

Frequently asked questions

How can I get a refund of the success fee for shipping if I refund my buyer?

If your buyer has overpaid shipping (e.g. combined shipping) and you refund them via Ping, Pay Now or AfterPay, you may be entitled to a partial refund of success fees. For partial success fee refunds, contact our customer support team with the details. If you are fully refunding the buyer the total amount of the item plus shipping, then simply apply via the site as you do now.

For My Products and Tradevine users, you can also set up combined shipping offers on your listings for buyers using the Shopping Cart. This will mean all the combined shipping costs are taken care of automatically.

Tip: If you are unsure of how much combined shipping will cost you when creating a listing, our ‘Book a courier’ service offers a shipping calculator, which is a handy tool that gives you an accurate idea of shipping prices.

If I sell something for $1 reserve will I be charged a success fee?

It depends. If you sell something for $1 with free or $0 shipping, or the buyer picks-up, there will be no success fee to pay. However, if you sell something for $1 with $3 shipping, then you will pay a success fee of 32 cents (7.9%) on the final sales value of $4.

If you’re selling a lot of items at $1 reserve and charging a shipping fee, it could be time to think about different options such as offering a flat shipping rate or a minimum order amount.

Are you changing your search algorithm on 14 March to promote listings with free shipping?

No, we won’t be changing our search algorithm for the time being, however, we’ll be promoting free shipping in other ways. We’ve highlighted listings with free shipping with a new flag on our desktop site, and are looking to do the same for our mobile apps very soon. We also allow buyers to filter by listings offering free shipping in search results.

Why don’t you show the total price including shipping on search results?

We’re considering it, but don’t believe that this alone will address the issue that buyers perceive shipping on Trade Me to be expensive. By including success fees on shipping we’re hoping to encourage more sellers to offer free shipping, and reward those sellers with the Gold Trade Rebate. In turn, this should make us an even more compelling e-commerce site for buyers in New Zealand, and drive more sales.

My business sells large bulky items that require a freight forwarder and can be expensive to send. How will we manage this new fee on shipping?

We understand that this change could have a significant impact when shipping items with high shipping costs.

You could consider the following options:

  • You may want to consider a $0 shipping option for local deliveries.

  • Offer pick-up on suitable items could off-set any extra cost.

  • Set up a minimum order value on My Products or Tradevine, to determine which listings could qualify for free shipping.

  • Find out how combined shipping could work for you from this blog post.

  • Try to negotiate a better rate directly with your freight forwarder.

Keep in mind that listings without specified shipping costs are less likely to sell.

If I offer $0 shipping options, such as combined shipping, does this still count as ‘free shipping’ towards the Gold Trade Rebate criteria?

Yes, if the buyer has not paid anything for shipping then that counts as ‘free shipping’. So whether your listing is marked as ‘free shipping’, $0 combined shipping, or another $0 shipping option, they all count towards the Gold Trade Rebate criteria.

  *Source: http://rejoiner.com/resources/free-shipping-online-retail-sales/

Introducing the Gold Trade Rebate – get 10% rebate on success fees

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On Trade Me’s marketplace, it is important that buyers feel safe, see transparent pricing, and know their order will be processed quickly. Sellers who make buying easier increase their chances of creating loyal buyers who will return and purchase more often.

We want buyers to come to Trade Me first for anything they want to buy and we want our sellers to be incredibly successful. To encourage better shipping experiences for buyers, without inflated costs and ideally with free shipping, we are changing success fees to be calculated on the final sales value (the price of the item sold + shipping costs) from 14 March 2018.

We also understand that this may incur a cost to sellers, so in turn we’re rewarding New Zealand-based in-trade sellers with a new Gold Trade Rebate.

What is the Gold Trade Rebate?

Sellers will receive a rebate on their success fees for high quality buying experiences that meet these three criteria:

  • A total price shoppers can be confident in: no shipping costs, the buyer has received free shipping or a $0 option such as combined shipping.
  • Timely transaction: we’ll need the shipping tracking number within two business days of payment.
  • Security in their purchase: coverage with Buyer Protection gives peace of mind to shoppers, so we have restricted this rebate to transactions that have been paid for with Ping, Pay Now or Afterpay.

For every eligible sale sellers will receive a 10% rebate on their net success fees (calculated as the fee after any other discount has been applied, such as Top Seller). Please see our Gold Trade Rebate terms and conditions for more detail.

Why have you chosen these criteria?

We know buyer expectations continue to rise. To continue to be the place where Kiwis love to shop, we all need to raise the bar of the experiences we provide. We see this as a joint effort between Trade Me and our sellers, so we’ve put together this rebate to encourage you to provide free shipping and help with any associated costs.

New Zealand sellers: We appreciate the challenge for New Zealand sellers to stay competitive. With costs incurred with importing goods, paying GST and relatively small businesses we know that supporting free shipping may be more difficult, so we want to help level the playing field with this rebate just for New Zealand in-trade sellers.

Free shipping: Buyers love free shipping, it can reduce abandonment rates, increase average number of items in the cart, and increase the average sale price of an order.* For more thoughts on how you can get free shipping to work with your business model, have a read of our blog post on the final sales value changes.

Note that purchases will also be eligible for the rebate where buyers receive a $0 custom shipping option like combined shipping. Purchases with other shipping options such as ‘pick up’, ‘to be arranged’, or ‘bulky/overweight freight’ will not be eligible for the rebate.

Shipping tracking numbersBuyers want to receive their items quickly and track their progress easily. Processing the order, booking a courier and providing Trade Me with the tracking number within two business days of payment ensures items are dispatched quickly and buyers can follow their orders. Tracking numbers are automatically sent through if you use ‘Book a courier’, and we’re also making it easier for you to send them to us via My Products, Tradevine and manually in My Trade Me.

Many third party listing tools and integrators can submit tracking numbers via Trade Me’s API, so if you do not currently have the capability to add tracking numbers, please contact your integrator. Buyers will be able to see tracking numbers from ‘Won items’ in My Trade Me, which should help reduce the number of queries you receive about shipment locations and status.

For details on how to send tracking numbers to Trade Me, see this help page.

Buyer protectionBuyer Protection helps ensure buyers have a safe and great trading experience. Coverage is included when items are paid for with Ping, Pay Now or Afterpay, which is why we have limited the rebate to transactions with those payment types.

How will the rebate be applied?

The Gold Trade Rebate will be applied to all transactions by New Zealand-based in-trade sellers that meet the criteria from 14 March 2018 onwards, regardless of the listing date.

10% of your net success fee will be refunded to your account. The net success fee will be calculated as the final amount paid after any other discount has already been applied.

E.g. For a Top Seller: Rebate = 10% x (success fee - Top Seller rebate)

Your savings will be automatically paid into your Trade Me account within two working days of the tracking number being provided.

For our New Zealand sellers that are on our invoicing system, any success fee rebates due will be totalled and credited to you as part of the monthly billing process.

How will this work with success fee refunds?

There will be no changes to the process you follow now to apply for success fee refunds. The Gold Trade Rebate will be processed the same way as the Top Seller Discount and will be debited from your account at the same time that the success fee is credited.

I list using the new goods feed, will it work for me?

No. The new goods feed will not be able to handle tracking information. If you use this service to create listings, your account manager will be in touch to discuss options.

Frequently asked questions

If I offer free shipping to everyone, I’ll end up paying more for buyers that are in rural areas. How should I manage this?

You don’t have to offer free shipping on all your products, or to all your customers. It may be prudent to pick and choose which products you can afford to subsidise with free shipping, and to restrict $0 to non-rural buyers only. However, we do know that lots of Trade Me buyers live rurally, so excluding this market may alienate those customers. If you do want to try and offer free shipping on all your items, to all buyers, try offering free shipping on a minimum order amount to help offset the increase in costs to your business. This can also help increase your average order value.

I’m a seller in a rural area.  Most couriers won’t pick parcels up from me. How can I qualify for the Gold Trade Rebate if I can’t provide a courier tracking number?

Our ‘Book a courier’ service does pick-up from a lot of rural addresses. Outside this, it’s hard to see how you will qualify for the rebate. In this situation it may be worth negotiating better rates with your RD contractor to see if there is any wiggle-room. We also have some suggestions on making free shipping work for your business in our seller blog post.

Do I have to use Trade Me book a courier to get the Gold Trade Rebate?

No, you can use any courier service that provides a tracking number (and meet the other rebate criteria).

How do I add a tracking number?

You can currently add courier tracking numbers via ‘Sold items’ on My Trade Me,‘Book a courier’, My Products, Tradevine or any third party listing channel that has built its functionality via the Trade Me API.

If you use a listing tool that doesn’t allow you to enter courier tracking numbers, you’ll need to contact your integrator.

Adding courier tracking numbers via our Touch site or mobile apps is not available yet.

If I offer $0 shipping options, such as combined shipping, does this still count as ‘free shipping’ towards the Gold Trade Rebate criteria?

Yes, if the buyer has not paid anything for shipping then that counts as ‘free shipping’. So whether your listing is marked as ‘free shipping’, $0 combined shipping, or another $0 shipping option, they all count towards the Gold Trade Rebate criteria.

For more details on adding a tracking number, please check out this help page.

If you have any questions about the Gold Trade Rebate, please get in touch.

*Source: http://rejoiner.com/resources/free-shipping-online-retail-sales/

Multi-variant listings – what they are and why you need them

MVL Example

Are you selling a product which comes in multiple sizes, colours, or materials? Tired of making lots of individual listings for each variant of the same product? Then multi-variant listings (MVLs) are for you.

With MVLs, you can group products together to create a single listing which will allow your buyers to select a specific product from a group of options.

For example, if you have a black, red, and blue top in multiple sizes, you can now have just one listing, and the buyer can select which colour and size option they want from a simple drop down box. Too easy.

No more waiting for the buyer to send through the colour they want, or creating 10 listings when one will do – this will also help reduce your high-volume listing fees.

MVLs are already available via Tradevine, our professional listing tool, so get in touch with the Tradevine team for your free 30 day trial and try out MVLs.

If you’re already using Tradevine then check out this help page on how to create MVLs and give them a go!

Last minute planning for Christmas

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With Christmas rush nearly here, we’ve come up with a few tricks for sellers of all sizes to help you prepare for the silly season.

First - breathe!

It will be ok. Follow a few simple suggestions and you’ll be absolutely fine.

Make sure you know what you’ve got

Do a thorough stock take, because there's nothing worse than a disappointed shopper if you’ve run out of stock. Once you know exactly how much and what you’ve got, don’t forget to update your listing tool to reflect that.

Research your competitors

What do your competitors have? How much are they selling it for? Do they offer free shipping or Afterpay? Are you offering the same or better? Buyers are savvy and things that reduce the price (like free shipping) or enable part payment can really tip the balance in your favour and secure the sale.

Listings

How do your listings look when buyers are browsing through the site? Make sure your photos are clear and have multiple angles of the item. Plus, don’t forget about our updated photo policy.

Make sure your listing titles and descriptions are clean and clearly state the details of the item. Have a think about whether you need to include more information, or make use of the listing footer in My Products to easily update the same details (e.g. policies, terms, shipping times)  at the bottom of each listing.

Labour

No, not the political party, hands on labour! If you have staff, make sure you’ve got enough to cover if people are sick or cannot come in for a day. You don’t want to get behind in sending orders out the door. If you're on your own, can you rope in friends of family members to help get purchases out the door.

Pick ups

If you offer a pick up option, make sure you have the hours of pick up clearly stated in your listings. You don’t want buyers getting stuck wanting to pick something up outside of hours at the last minute, or for you to have to man the pick-up desk all day and miss out on sending goods on time.

Time savers

Can you save time anywhere? This can be as valuable as actually selling items. Do you have any accounting software? This can save you a bunch of time and most listing tools integrate into the more popular options like Xero.

Shipping

Put an estimated shipping time in your shipping options or in your listing footer. This can help buyers visualise when something will arrive and the different options. Can they pay more and have it arrive quicker? You must also update your listings to clearly state when the last day for buyers to purchase items and you guarantee pre-Christmas delivery is.

Returns

Professional sellers should have a clearly defined returns policy that lines up with the Consumer Guarantees Act. This gives buyers reassurance on the process if something goes wrong. Offering a good change of mind option can be a great way to go at this time of year for those gifts that don’t go down so well, as it can make the difference between a sale or future repeat customer.

After the sale

Buyers remember good post sale customer service, and on the flipside, they always remember bad customer service. Being on top of this can also really be a time saver if a buyer leaves negative feedback.

If something goes wrong

Don’t forget, we’re always here to help. We can give advice if you’ve got curly questions or hiccups with trades, just get in touch.

Stay safe and happy trading!

Changes to the Top Seller programme

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We’re making some changes to the way qualification and rebates are handled in the Top Seller programme.

From 4 December, sales from Property, Jobs and Motors* listings will no longer contribute towards the Top Seller qualification criteria, and we will be phasing out the rebates for these listings.

If you’re a Top Seller on 4 December 2017, you’ll receive Top Seller rebates for your Property, Jobs and Motors fees until 15 January 2018 or until the end of your qualification period, whichever occurs first. From there on, the Top Seller rebates will only apply to Marketplace general goods fees.

Why are you making these changes?

These changes will make it fairer to Trade Me members who list classifieds in Motors, Property and Jobs and therefore can’t qualify for the Top Seller programme. This means that regardless of how you choose to list in Motors, Jobs and Property, the fees are fair across the board.

Does this mean I won’t be a Top Seller at all?

You’ll still be able to qualify for Top Seller through sales from your Marketplace general items listings. The programme will only exclude Trade Me Property, Jobs and Motors listings from 4 December 2017.

What will happen to my rebates?

You’ll continue to receive your 15% rebate for Marketplace fees as usual while you are a Top Seller. Come 15 January 2018, the Top Seller rebates will cease for any Motors, Jobs or Property fees.

If you have any questions about these changes, feel free to get in touch with us.

*Car parts & accessories is considered a Marketplace category, therefore these listings will continue towards Top Seller qualification and receive Top Seller rebates. All of Business, Farming & industry will also continue be included in the Top Seller programme.