eBay sellers say postage costs a major barrier to growth

More than half of Australian eBay sellers cite postage as a major barrier to growth, according to a new report, while 68% would like to see more competitive shipping rates.

The Online Business Index Shipping Report, launched today by eBay, Australia Post and PayPal, is based on a survey of 1,015 eBay sellers.

According to the report, the main driver for eBay sellers – when choosing a shipping partner – is reliability of delivery service. This was listed by 34% of respondents as the top priority, followed by shipping rates (31%).

The report reveals only 26% of eBay sellers are happy with shipping rates, while 68% of respondents would like to see more competitive shipping rates.

Meanwhile, more than half of respondents would like to see net improvements for tracking.

The report reveals 16% of respondents have used shipping providers other than Australia Post, including 58% of business sellers.

Of those that used courier services in the last year instead of Australia Post, 69% said it was due to their ability to ship large or bulky items, while 22% said couriers were cheaper.

Other reasons included more convenient pickup (12%), better value for money on large items (11%) and speed of delivery (10%).

Barriers to growth cited by respondents included postage (55%), followed by the cost of supplies (42%), and staff wages and super costs (28%).

According to eBay vice president Deborah Sharkey, reliability of delivery, customer service and tracked shipping are all critical eCommerce enablers, which drive buyer confidence.

“Many sellers also acknowledged that choosing a shipping provider was more than just about price – it was also about choice,” Sharkey points out.

“Accuracy and availability of tracking, bulky item shipping, more delivery time choices and flexibility of pick-up service were all key improvements that sellers would like to see.”

When comparing Australia’s parcel rates and delivery times to the rest of the world, Australia Post is cheaper than the UK’s Royal Mail, but not as quick.

Australia Post offers a marginally faster service than the US Postal Service, but for a higher price.

FedEx, United Parcel Service and Deutsche Post offer the fastest parcel delivery service at the most competitive rates for domestic services.

Australia Post chief executive Ahmed Fahour insists Australia Post is continuing to invest in the business in order to give online retailers competitively-priced shipping solutions.

“The need for improved tracking is something we’re already building into many of our products to provide online sellers with more peace of mind,” Ahmed said in a statement.

“Our new low-cost, internationally-tracked product, Pack and Track International, is now available to the UK, US and New Zealand, with volume-based discounts available.”

Neville Samuels, director of Melbourne-based video game seller Dungeon Crawl, says consumers want the ability to pay extra for “VIP” services, or receive basic service with cheaper costs.

“Australia Post is doing an enormous amount of work to provide new products and options specifically for online sellers,” he says.

“However, when eBay sellers move items out of Hong Kong for just $2 each, including postage, it’s hard for us to compete.”

Survey respondents want eBay to continue negotiating on their behalf for volume-based discounts, tracking for all eBay shipments, and to push for a wider range of flat-rate products.

This article first appeared on StartupSmart

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