While many retailers see Amazon’s price and range as a significant threat to their business, for shoppers, the rubber really hits the road when it comes to shipping. A big part of Amazon’s advantage in overseas markets comes from their ability to get products into buyers’ hands quickly and efficiently. And high shipping costs are one of the big reasons Aussies don’t complete online transactions.
According to Temando’s State of Shipping report for 2017 almost two-thirds of consumers stated that they abandoned their cart due to the high cost of shipping. And 68% said free shipping would result in them spending more money.
The survey collected data from 258 retailers and 1,279 online shoppers in Australia.
Giving consumers more choices when it comes to shipping is a big deal with over a third of retailers who expanded their shipping options seeing increased sales.
This is where many Australian retailers are missing the point. Price and range are important but service is critical. And that means getting the supply chain right, all the way to the customer’s hands.
Comments
3 responses to “Aussie Retailers Need Better Delivery To Survive The Amazon Onslaught”
$10 for a product with $10 shipping, or $20 for a product with free shipping, id take the free shipping.
What gets me the most is when you are buying something that can fit in a standard envelope with a couple stamps, but the site charges a minimum shipping cost of $10-$15. I know it will fit in an envelope, I’ve gotten similar things from other sites that fit in envelopes, you’ve just lost a sale.
Most retailers are already making bare minimum profit just to compete. To offer free shipping will eat into their bare minimum profit as well so how are they suppose to survive. Something i question a bit when i see Free Shipping is how are they making a profit because wile free shipping certainly helps make the sale, you also got to make a profit or no point being in business.
It’s also of no fault of why shipping is expensive to the business, that’s controlled by the shipping company be it auspost or a courier. I’ve been frustrated many times that an item i want to send which is very small cost’s more to send than what it’s worth and if i send with free posting, i’ve made no profit. Business can get a better deal from the shipping company to lower the shipping cost but it’s based on a agreement that you will be selling a high amount of products per week. This is very hard to judge these days because you don’t what you will make this week, you could make $1000.00 or more that week or you could make $100.00 or less that week.
To offer free shipping you are offsetting the cost somewhere else that you allows to recoup the cost from shipping which depending on size of product and where to send it could jump from $20.00 to $200.00. The offsets can be cheapen the staff training, if you get terrible customer service, it’s most likely because they haven’t trained the staff properly because that’s cost money they have used for the free shipping. Always a case of why is it so cheap. Also not all businesses are the same, there are some businesses that do have a huge mark up and others that don’t. Some that get better deals from the supplier and some that don’t or can’t.
Amazon are able to offer really low prices and free shipping because they are able to recoup the cost’s from their other services like web hosting, majority of the world now use amazon as their web host so they are making big dollars from that.
As the author pointed out in the article Boozle you are completely missing the point. It’s not just the price of shipping or offering it for free, it is a seamless supply chain that gets the purchases to the buyer quickly and hassle free. I think it is what most retailers are completely missing from the Amazon picture. It’s not going to be a price war, it is going to be a convenience war when Amazon introduce quick, easy and reliable delivery. It will mean they will need to flex their muscle in the delivery industry which will be hit just as hard, if not harder than retailers themselves.
This is under the assumption Amazon can get good shipping rates in Australia. If they can, I’ll be switching to them, that’s for sure.
Hopefully that will be a catalyst needed to get the Aussie retailers and shipping companies to up their game. If I can get a $2 widget sent from China for free, but cost me $12 to get the same thing sent from Sydney, they really don’t understand just how much they’re pissing off their potential customers.