Vendor Resources

Shipping Costs: To Charge or Not to Charge?


The relationship between online sales and shipping costs

Probably the biggest catch-22 when it comes to the world of e-commerce. As an online seller, you have to pay to get your product to your client, but your clients don’t want to pay for shipping!

Let’s look at some stats and some strategies to navigate your way around this issue, with the intention to reduce the number of abandoned carts on your vendo shop page.

Some numbers – the effect of shipping costs on online shoppers

We are not going to bore you with stats, but we need at least one to be legitimate.

Based on a study by AlixPartners, the top reasons why online shoppers abandon carts are as follows:

Need to see or touch the item before purchasing (37%)

Cost of delivery too high (36%)

Concerns about quality or freshness of a product (26%)

Ease of returning the item (20%)

Loss or damage in transit (17%)

Concerns about the size or fit (16%)

Better selection in a physical store (15%)

Concern about getting the right part or item (13%)

Better total price in a physical store (13%)

There are numerous studies out there showing the same statistics and they all come down to the fact that shoppers don’t like unexpected costs!

The bottom line is that shoppers are more willing to place an order and make a payment if there are no surprises. Shipping costs can be the deciding factor between a successful sale and a lost sale.

We all know this, but yet we still have to pay to ship our products. So how can we work around this?

Vendo Shipping Blog

It’s all about perception and transparency

The key insight from most studies is that online shoppers don’t like unexpected costs. So collectively our mission should be to minimize this effect on Vendoshop South Africa.

Shoppers are not oblivious to the fact that online shopping comes at an increased cost to cover shipping, so what can we do to make the shopping experience easier and decrease the number of surprises.

1.) Transparency

It all starts on the product page. Make sure the customer knows exactly what he/she will be paying. You don’t want to sit with a situation where someone is willing to buy your product for R500.00 and then get to the cart just to realise it’s actually going to cost R650.00.

Bummer…and a lost sale (we all know how that movie ends)

So either raise the price and say “shipping included“, or at the very least include a line in the shipping policy or product description section where it clearly states the shipping cost of the given product.

This way it doesn’t come as a surprise when the shopper gets to checkout.

2.) Perception – “Free Shipping”

As mentioned above, a great strategy is to include the shipping cost in your product price, and to then simply go with “Free Shipping”.

This way the customer will have no surprises and when they do like a product the entire cost is right there in front of them from the moment they see the product. This way it changes the entire decision-making process and if the person decides to “add to cart“, it will more likely result in a successful sale.

Add-to-cart-rate will be lower, but you will see fewer people abandon the purchase.

3.) Zoning (Different shipping costs based on where the customer is)

Most of us are able to ship for cheaper in our operating region. In the shipping section on your vendor dashboard, you will be able to set shipping to free for certain regions (filtered all the way down to specific postal codes). You can also give clients the option of local pickup at no cost.

This can help you bring down your price again and will also assist you with marketing to boost regional sales!

What Vendo is doing to help

From our side, we will educate shoppers and customers to the best of our ability and we will always try to improve the platform to minimize surprises.

We are also working on a partnership and integration with The Courier Guy that will give you access to discounted nationwide shipping and Pudo Lockers drop-off points for any purchases made on Vendoshop.

As always. Please feel free to talk to us about setting up your shipping. We will help you set up the most optimal strategies and pricing models.

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