[concerto]

The sales incentives make no sense. He made 1/3rd commission on the smallest bags, 1/5th on the medium and 1/6 on the largest bags. It is better for him to sell lots of small bags than 1 big one. In addition, assuming most customers buy the small bag, then upselling to a medium bag would bring no extra financial reward. Putting aside the idea that buying the biggest bag might lead to faster consumption, and assuming that the customers were tied in to the supplier, he would have been better off downselling as the customers would still buy the same amount, just in more transactions, leading to higher returns for him (especially as his transport costs were paid).

[gwern]

It makes sense to me. Each sale of a bag takes time. It's no good getting a higher percentage of a small bag if he has to run around for an hour to sell 1 small bag and could've sold 1 large bag in that hour instead.

[concerto]

If the majority of users take the small bag, which seems logical, then I can't imagine you would be able to upsell them easily to a product that was 5x the price (indeed the author acknowledges that), the upsell opportunity there would be to a medium bag, but as there is no difference to him financially in the sale of a small or medium bag, what is his incentive?

[gwern]

...If there is no difference to him between a small and medium, doesn't that instantly explain why he's trying to upsell them to a big bag even though it's so difficult?