With 59%* of shoppers saying they consider shipping costs when
purchasing on-line, and 44%* abandoning their cart due
to high shipping costs, determining what to charge for
delivery just might be the second most important
decision that an eStore will ever make (after deciding to launch
in the first place).
Here's our 4 awesome shipping tactics:
Keep it Simple: Flat fees are best
Offer Incentives: Offering free or discounted shipping
based on minimum order totals is a proven tactic
Be competitive: Know your opposition and respect your
customers - they'll know if you're gouging them
Use a disclaimer: Reserve the right to re-negotiate
shipping costs post-order if necessary
We all know it ACTUALLY COSTS money to ship orders, but with customers
voting with their wallets, what is the Goldilocks amount to charge for
To help you decide, we reviewed some Australian eStores to see what they
are doing... (Note: HCD has no affiliation with any of the businesses
reviewed. We have chosen websites randomly. All amounts are in Australian
Target charges $9.00 for delivery of small
orders under $75.00, or free shipping for small orders over $75.00. Their
delivery charge for large items is $15.00, or $30.00 for 3 or more large
items. Target also offer a "Click and Collect" option, which allows the
customer to pick up their order from selected Target stores depending on
the items in the order. This option is free for orders over $40.00 or
$5.00 for orders under $40.00.
HCD Note:A $5.00 administration fee to collect a
pre-paid order in-store...really?
Myer offers standard delivery for $9.95 for
orders under $100, and free delivery on orders $100 and over, except for
Goods that require Special Delivery. There is also the option to pick up
the order from selected Myer stores dependant upon the items in the
order, which doesn't have an additional fee.
HCD Note: 5 Stars from us Myer - Target take notice!
The Iconic offers a few choices. Customers can
pick up their order from a Parcel Point for free, which is useful if you
are living in a major city. Otherwise, the cost for shipping by Australia
Post is $7.95 anywhere in Australia. Free overnight shipping is available
for orders over $50.00. For an extra $2.00, delivery is available within
3 hours to metro areas in Sydney or Melbourne.
HCD Note: We love the express options and with a low
$50.00 threshold for free delivery, this is about as good as it gets.
That Online Shop offer free delivery for
orders over $100.00, otherwise they charge $7.00 per item for standard
delivery or $15.00 flat for express delivery. They also provide free gift
wrapping with a gift tag. The terms specify that a surcharge may apply if
delivery is to a non metropolitan postcode and the item is bulky or
fragile, dependant on the excess charges applied by the courier. Delivery
is available to international addresses at the rate of $40.00 to NZ, USA,
UK or Asia, unless the items are over 2kg, where shipping costs are
negotiated personally with the customer.
HCD Note: Full marks for the free gift wrapping and gift
tag, and the incentive to make a minimum $100.00 purchase or select
express shipping is commendable. Alas, $40.00 for international shipping
for orders less than 2Kg may discourage many overseas customers from
purchasing, and, as there are no weights included with any product
details, customers have no way of knowing whether or not they have
exceeded the 2Kg limit.
Sadly, we experienced technical problems on subsequent visits to this
site, which we have pointed out to the website operators. This highlights
the importance of technology that works.
Oxfam Shop has a different approach to delivery
fees. They have set shipping fees at 15% of the order total, limited to
$7.00 minimum and $17.00 maximum, or $25.00 for express delivery. They
also specify that large items may incur a delivery surcharge. Oxfam offer
international delivery too, which is 15% of the order total, set between
$40.00 and $100.00.
HCD Note: At first glance we weren't sure about this
approach, however, the actual delivery costs are reasonable. Our
recommendations would be to offer free shipping once the order total
exceeded a nominal amount.
The T2 Tea on-line store have set delivery fees to $10.00
flat rate for standard delivery, and $20.00 flat for express delivery.
Orders over $60.00 are shipped free within Australia. International
orders have a different set of fees which change dependant upon the order
HCD Note: Full marks - but remember - this website does
not need to factor oversize or bulky orders, in which case, a disclaimer
would be strongly recommended.
While there are variations, the current trend for delivery fees is a
flat rate ranging between $10.00 and $20.00 with an offer of free
shipping for more expensive orders of around $100.00.
Remember, customers shop around to get the lowest price possible, which
includes the delivery fees. Customers will justify buying an item that is
a few dollars more than on another website, if the total including
shipping still ends up being cheaper. Having a flat fee also makes the
process a lot easier. Customers know up front what they can expect the
shipping costs to be.
HCD Tactic: Review the cost of sending an average order
to each of the major cities in Australia through your preferred
Set flat fees that cover most bases while remaining in line with your
competitors. Aim for a delivery fee of $10.00 - $20.00 for orders within
Australia and encourage customers to spend more by setting a free
shipping threshold amount.
HCD Tactic: If you find you simply can't compete with
shipping costs offered by your competitors, consider investigating out
how they do it...do they have a better deal with a courier or lower cost
packaging and warehousing costs?
HCD Tactic: Where necessary, use a disclaimer to reserve
the right to adjust shipping costs (after the original order is placed)
for oversize or bulky orders, or orders being shipped to remote or
otherwise difficult delivery areas.
HCD delivers enterprise e-commerce and mobile commerce solutions to
customers serious about maximising return on investment. Our proprietary
technology caters for just about any shipping configuration imaginable.
For more information please contact us for a confidential
* Statistics from VoucherCloud's infographic Consumer
Psychology and the E-Commerce Checkout.