COMMISSION INCREASE – YOUR QUESTIONS ANSWERED
Q: With the increased commission, will you be able to lower the price of catalogues and promotions?
A: Yes, we will lower these costs moving forward. We already heavily subsidise all co-funded marketing. For example, the magazine campaign kicking off in August issues has a rate card value of $190,000 and we’re only charging sellers $1K to take part. On a total readership reach of 2.6 million, it’s costing sellers $1 for every 2,600 ‘eyeballs’ we deliver.
Q: We fully understand the importance of effective digital marketing and we’re excited that there will be a bigger push in this area. Can you let us know if this marketing will be evenly distributed to all sellers?
A: We will always do our very best to support all sellers. Much of the retargeting and paid search activity we do will naturally display your products if a customer browses or searches for them. You will get even more benefits from our marketing support if you have really good images, if you frequently add new products to your store and keep it fresh, and if you email us with your news and updates to keep us informed!
Q: Do you actually do any marketing/advertising that is funded purely by Hardtofind?
A: Yes. More than 95% of our marketing budget is funded from our commission, and that budget takes up more than 50% of our commission. The rest goes towards staffing, customer support, overheads and technology (including associated computing and internet costs). Hardtofind is a family owned and run business – we don’t have Venture Capital or Private Equity investors and all profit is re-invested back into the business to maintain and improve our online marketplace.
Q: Are you still going to be running the discounted sales?
A: Yes. And we will continue to support your discounts out of our commission by offering customers additional savings eg) $15 off when you spend $99 etc.
Q: Can you tell us what your growth plans are?
A: We’ll be investing more heavily in tech and AI (artificial intelligence) and looking to expand our small development team to allow for greater throughput and velocity. Our marketing budget for FY19 has doubled, including a 270% increase in above-the-line advertising and a 500% increase in paid search (yes, you read that correctly).
Q: Completely understand you having to do this, but can we adjust our pricing to accommodate the commission increase?
A: Your prices on Hardtofind need to be the same (inclusive of shipping) as the prices on your own site. If you do need to adjust your pricing on Hardtofind, you will need to do so on your own site, too.
Q: 40% commission is almost as much as my wholesale margin.
A: Yes, our commission is now closer to a standard wholesale margin. This will enable us to turbo-boost our support for your own online sales and customer acquisition. We will be doubling our spend in both traditional and digital marketing channels, providing more customers and more sales. We are committed to providing our seller community with a unique channel to market that provides significant, incremental revenue (and remember, you only pay commission when you make a sale).
Q: Are you taking commission from paid postage as well?
A: Yes. Paid postage makes up 3.2% of total orders (on average), so the numbers are pretty low. Your product RRPs include shipping in the price, so we have (in effect) always taken commission on shipping.
Q: Can we charge for tracked shipping or does it have to be offered free?
A: You can charge whatever you like for Tracked Shipping, Express Post, Courier and Fast Delivery to Australia. The customer can choose their preferred shipping option, but we will always default to the best ‘free’ option at checkout.
Q: Will you be using any of this commission to update the back end of the platform?
A: Yes, tech improvements are very much part of our plan. Here’s a snapshot:
- We have overhauled our accounting system to accommodate for the new GST changes relating to low value imports. This took many months.
- Soon to complete a site-speed enhancement project which we hope will result in improved conversion rates across both desktop and mobile.
- Mobile site UX and UI enhancements – we’re in the final stages of testing these now and hope to release the improvements in the next couple of weeks.
- We have built our own behavioural recommendations platform. Go-live is scheduled for next week.
- We’re about to start development on our new seller loyalty program (more on this to come).
- Plus lots more in the pipeline including further conversion improvements, SEO enhancements, a new Gift Calendar and preparing the site for Christmas with additional features and efficiencies to help make all our lives a bit easier during the busy season!