another day at the office
According to a recent survey* 78% of buyers surveyed said that “they would NOT purchase an item online if the cost of shipping is too high.”
The same survey shows that 95% (that a whole bunch of customers!) said they will purchase an item online if the shipping is FREE.
I’ve heard lots of grumbles (including those emanating from me) about offering customers free shipping.
The cost of shipping is on the rise - yet 95% of our customers expect us to offer them no cost shipping.
So, how do we cope with this extra expense? Let’s take a look at what some of the big box retailers are doing.
Many retailers (78% according to shop.org) plan to offer free shipping but with conditions. Think of Amazon.com – to receive free shipping you must purchase over $25.00 or belong to their Amazon Advantage program. As a buyer, it works for me – it seems I’m always purchasing a second book to receive the free shipping. Think of it as a way to help upsell your customers.
Another ‘condition’ might be “free shipping” if ordered within the next _____ hours (you fill in the blank). Giving your customers that all important reason to act now!
In the coming year you will see many retailers moving the “conditions” up. This will help level the field for all of us. As costs continue to rise competing with low free shipping barriers is hard. But, if you sell more product, it makes the free shipping expense easier. Can you offer free shipping for sales over $50.00 or 100.00? You may be surprised how many customers will take you up on the offer.
If you can factor in a way to offer free shipping you should do it. That may mean making some tough decisions about the products you carry. Is the product you are selling offering a large enough profit margin to afford the extra cost of shipping? If not, let it go and look for items that offer a better mark-up. I know, that’s easier to say than done, but as you prepare your books for tax season, take a good hard look at your inventory. Red numbers will make some decisions a lot easier.
Photo courtsey of: nukeit1 – shared under creative commons – thanks!
*eTatiling groups “Mindset of the Multi-Channer Shopper Holiday Survey 10/2008
2 Responses
Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.
Great post! As an eBay seller I try to offer free shipping as much as possible. As an eBay shopper, I try to shop for items with free shipping too! It is the “sign of the times” : Free Shipping!
What a stupid survey. So 22% of buyers go through with the purchase even if the shipping is too high? Doesn’t the definition of “too high” mean that you didn’t go through with it?
I look for items WITH shipping. Shipping isn’t taxed. Free shipping is subsidized by increasing the price of the item, so now I’m paying tax on shipping too. I look for the best deal, regardless of shipping charges.
This free shipping nonsense is ridiculous. God people are stupid/lazy.