Forums: Discussions for entrepreneurs and small business.

I have notice a lot of SUN members struggling with shipping related issues.  This is very understandable as it tends to be assumed as easy and left until last.  So I have decided to do something that I have wanted to do for years.  I have created a web site that contains free informational articles concerning shipping for Internet retailers known as http://www.BusinessShipper.com.  There is only one article there right now.  This is only the beginning but I thought SUN members might find the first article to be of value, so I decided to go public early.

 

The first article addresses how to handle shipping charges at order time and a way to deal with shopping cart abandonment.  Did you know nearly 50% of the people that abandon their shipping cart orders do it because of shipping charges?  This does not sound like something that should be ignored to me.  I hope my first article gives the SUN members ideas on how to deal with these problems, or at least gets people to start thinking.

 

All the information found on this site is free for use and I will try my best to keep it as informative and relevant as possible.  I am sharing with you what I have learned over the years working with all size companies and I plan to get other people to donate some time and knowledge.  I plan to add one to two articles to this site per month.

 

I would value any comments from SUN members concerning this project.  If there are any subjects you would like to see there, let me know.  I have already started making a list.  I hope you all find this of value!

 

Bert.

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

I read this article and found it very useful. As with any really well-written piece, some of the information seemed "obvious" when I read it, but I knew that unless I`d first read it, I wouldn`t have thought of it myself. That`s nice writing.

The article speaks to the issues of when and how to offer free shipping, but more importantly it brings up the most fundamental competitive issue with e-commerce. How do you compare with a brick-and-mortar store in your potential customer`s immediate neighborhood---the so-called local area?

It`s all well and good that I can find a $10 item for $8 on the Web. But if I add in the time delay and cost of shipping, that same item would actually cost me $12 if I buy it online. So why buy it online?

The second fundamental competitive issue, this time going the other direction, is that more and more "big box" stores simply don`t have what the customer wants. They`re out of stock, don`t carry it, or it`s in the "wrong season." As a result, more and more people are turning to the Web to find exactly what they want and need.

Bert`s article is geared somewhat toward volume sellers with a lot of shipping taking place. But the underlying concepts apply to ANYone who does business on the web. If nothing else, it encourages some good thinking about a basic part of e-commerce: how to get your product into the hands of your customer.

I`m looking forward to future articles on this site, dealing with all the ins and outs of mail-order shipping.

I abandon my integrated UPS shipping calculator because shipping charges are not disclosed until the checkout process starts. I now offer free shipping on all orders over $200. The problem that I encounter with free shipping is one of the consumer who is shopping around for best price. Since shipping charges are rolled into my prices they appear to be higher at first glance. If the consumer does not spend enough time on a competing web site to figure out that with all of the shipping and handling rolled in they will actually pay more for the product then I lose the sale. I have competitors who advertise a ridiculously low price and then charge an inflated shipping and handling fee and charge for accessories and finishes that are included in their wholesale price! With fuel charges increasing at a rapid pace, my profits are diminishing but I hate to raise my prices at the risk of losing sales to the more deceptive websites. It is a real catch-22.

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Sharon Murphy
Owner
Northwoods State of Mind, Inc.
NorthWoods

Sharon,

That is why I say flat rate shipping should be the first choice for most Internet retailers.  First, you stop distance based shopping cart abandonment.  This also means that you can display your most competitive price up front and not include shipping like you are concern about.  You are right free shipping should only be used where it makes sense.  To keep from having early abandonment you need to also state your flat rate prices before the checkout process.  That will mean when the customer starts pricing shopping they will know all the facts about the cost of doing business with you.  This is important.  If your competitors do not do the same thing, the customer will be coming back to your site after they abandon the competitor’s shopping cart order.  This will happen because they know all the facts.  If you are not up front with them they will not come back because they will assume you will be charging the same amount or more for shipping.

As for increase costs, there are some things you can do here but that is paper in itself.  For this thread all I can say is you need to watch the prices all the time and be ready to change your flat rates as frequently as necessary.  The more choices in ways you have to ship, the more flexible you can be when prices change.  For the most part your competitors are dealing with the same problems.

I hope this helps and good luck with your business!

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

bert ... I completely agree with your shipping charge comments. As a matter of fact, I think the shipping cost issue is one of the largest problems of buying through the internet. I currently offer free shipping for orders of $100 or more. At the same time, I offer free delivery to all orders in the city of my place of business.

In October of `06 I created a poll discussing this very topic. "shipping: Flat Rate VS Real Time Qoute" The reason for this poll was my concern of shipping costs being the obstacle of people`s dislike for online retail purchasing. As you can tell from the poll, it`s absolutely in the minds of the shopper. Eventually, I would love to offer free shipping everywhere, but crankin out the numbers to make it happen isn`t that easy.

One comment about the resources you are soon to put together... I hope you plan to create an online version instead of only PDFs. PDFs are not bad, but I think your search engine recognition would be more intense if all those keywords were search-able by the engines. I think I would also visit the pages rather then downloading the PDF too. However I did download and read your first article.


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Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words

Vincent,

It looks like you have had first hand experience at doing it right.  There are some ways to make number crankin easier and I plan to address better in the near future.  I will also make sure our future articles are in HTML and PDF format.  You make a very good point about this too...

Thank for visiting the site and your comments!

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

Sharon, and others,
Here`s an idea I`ve been thinking about, and perhaps it might help.

Let`s begin with Bert`s explanation of the advantages of flat-rate or free shipping. Then let`s add in Sharon`s problem of customers "perceiving" an inflated price in comparison to other sites, where those others don`t show shipping up front.

Suppose you were to put in a link button, "Click to return here after you`ve compared other prices."

Lots of shopping carts have a "wish list" button/option. But I`ve yet to see a way to "mark" a site during the comparison shopping process. I`m halfway thinking that a plain ol` bookmark would do fine. It`s not the technology, so much as having the button there. You`d go for the "Hey...that`s a good idea! If they really do have the lowest price after shipping costs, then I can come back here."

Mabye?

Another way might be to open up a frame that does a pre-determined search on Froogle, then shows people other sites---the competitors. If you really are the best price and best service, that might work. I dunno, though. I don`t like markeitng someone else`s product.

CraigL... I agree. I don`t like marketing someone else`s products either. As a matter of fact, my products are 100% better than the other products on the market. You won`t even find another seller to compare directly with. On top of that, why should price be the bottom line decision maker? You (and everyone) knows quality, and selection of a products are also decision making factor when buying a particular product. And let`s not forget the quality of service you receive from any given company.

To be honest, I know my product is best. My return customers know they will not find similar products elsewhere online... Even if it`s not expressed well enough on the site (that always a challenge).

Have you ever wondered where the professional interior decorators get those fabulous home decoratives? That`s right! Many find there unique and talked about earthborn & handmade decoratives on ElusiveTreasures.com!


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Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words

A very informative conversation.

I started my business offering free shipping on orders over $75.  I found that 1/2 my sales took advantage of that.  The sales that were over $75 seemed to be coming from customers trying to reach the free shipping offer.

I tested a flat rate offer (4.95 then 3.95) and some moderate success.  The sales were for lower priced items (under $20 retail).  My UPS charges took away any margin I made on the product.  I`ve gone back to the free shipping offer.  I`m not averse to flat fee.  Consumers probably like knowing that shipping is either a fixed price or free. I definitely charged too little for it, though.

I was in the traditional retail world for a long time and overhead is massive.  Overhead in the online business tends to be lower, but shipping costs are big part it and are only going up.  At some point, those costs have to be passed along.


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Doug Morris
www.edufuntoys.com
info@edufuntoys.com

Kids learning best when they`re having fun