Beat the Algorithm - How to Stay in Profit While Amazon & Ebay Create Business Race To Bottom

Everyone's putting their prices up. taxes, energy, TV Licence fee, healthcare, insurance, food, water. See this BBC article for the latest detail.

But have you ever wondered why it's so difficult to put your own prices up?

If you're a trader on online marketplaces such as Ebay or Amazon that means you are likely to be competing heavily on price, so putting your prices up may be difficult.

Even if your own costs are going up you may be reluctant to increase your prices due to FOMO; the fear of missing out on future sales. 

How the Amazon Algorithm Works to Reduce Revenue

It's simple enough.

Online marketplaces such as Amazon and Ebay need the buying public to keep coming back to their sites.

One way of achieving this of course is to offer low prices,  

So let's briefly look at how coders program algorithms in a way that reduces your revenue.

LOW PRICES
Buy now boxes and top spots given to sellers offering

• lowest price
• highest ad revenue
• free shipping

Same or similar items flagged to the customer at every opportunity right up to checkout causing customers to dump the contents of their cart in favour of buying from one of your many competitors.

Lower prices and offering free shipping is high on the Amazon agenda. In fact an Amazon email to sellers dated 7th May 2019 stated: "Remember, delivery is one of the most important parts of the e-commerce experience. A report by Temando (July 2017) suggests that 86% of UK shoppers prefer free over fast delivery. Remember also that customers love low prices." 

So you comply...

But, you work out your margins to find your margins erode with time and you're less and less. It only takes a couple of damaged returns or non delivery claims to harm the margins you once enjoyed.

How are you able to increase your competitiveness in such harsh conditions?

In a race to the bottom you have to look at your costs seriously and look at what costs you can reduce. 
Can you get your products at better rates? Buy more perhaps? Can you look at decreasing the prices of the packaging you use to ship?

Reducing Shipping Costs: The Key to Profit Increase

If you use Royal Mail and you think shipping costs are pretty much fixed think again.

For sellers using any kind of registered delivery then switching to using Tracado creates and immediate cost reduction of up to £1 per item.

It has been said that it's like comparing apples with oranges because RM tracks and Tracado merely gives the illusion of tracking.

However use the Tracado system correctly and there's no reason why you shouldn't see a comparable reduction in non-delivery claims as we experienced during our extensive testing period (over 99%).

If you've ever looked at the Royal Mail returns process on standard mail you'd agree that it's actually brilliant; volumes considered, Royal Mail's timing and accuracy of returning mail due to non delivery (incorrect address, refusal, not collected etc.) is outstanding.

This should give you the confidence that any item sent standard mail is more likely than not to see its way back to you if it is undelivered for any reason. If this is true - which it is - then most buyer Where's My Stuff claims are false in that the item has been delivered with though one of the following scenarios has taken place: - 
​

• Malicious buyer (a thief) has your item and is lying in order to secure refund
• Another person at the address (a thief) has the item and has no intention of notifying the buyer 
  Flats, apartments, businesses, student accommodation experience this most frequently
• An irresponsible person at the property has the item and doesn't bother to notify the buyer 
  Flats, apartments, businesses, student accommodation all experience this
• Other buyer irresponsibility (disorganised)
  ​Not checking deliveries correctly, not opening mail in timely manner etc.

If item not RTS, it's a fake claim and you've been had...

Statistically if a buyer opens a non-delivery claim and the item isn't returned to the sender then it is likely to be a false or fake claim and sadly you've been had.

In Tracado tests we sent over 30,000 items with a retail value of £30 with Royal Mail Standard Class 1st and 2nd mail. 

In all of the few buyer claims of non-delivery that were opened, each of the items were later returned by Royal Mail as undeliverable for some reason (incorrect address, addressee no longer at property etc.) 

Start Saving £1 per Item on Your Shipping Costs

So set up your Delivery Confirmation Page  today and order your Tracado labels to start making instant savings to your shipping costs.

Enjoy fighting fire with fire and most importantly seeing your profits rise again.

^lc