Abandoned shopping carts - 43% abandon due to postal charges - article

[mrs maggot]

found this artical useful, i dont charge p&p on our site, its included in all our costings, as i know myself i have booked something online, then seen the postage, and its made me think twice

anyway the article is here http://www.prestashop.com/blog/article/learn_to_effectively_manage_your_postal_charge_pol icies

[John G]

I think its a case of you think the item is a bargain but when the postage is added at checkout buyers think twice. If postal charges were transparent, and listed beside each item before you buy, I think this % would come shooting down.

[JSR]

The trouble is that it's not as simple as that.

Postage for a mug might be almost £3, but postage for four mugs is around £6 while you can ship 50+ mugs for a tenner . If you put £3 postage next to the price of a mug, the customer will think that four mugs will cost £12 postage, or that 10 mugs would cost £30 postage.

It's the same for free postage. You'd have to increase the price of the mug by £3 - so if the customer buys four mugs, they don't know that they're actually paying £12 for the postage that only really costs £6. If they buy a dozen, they end up paying £36 hidden postage for something you can ship for under a tenner.

What do you do? Rip the customer off by obscurity, or be honest that you charge what the postage actually costs for the weight of the shopping cart? It seems that being "transparent", which may result in ripping the customer off, may result in more sales than only charging what the postage costs. That sounds like the backend way around of doing things.

And what if the customer wants urgent delivery? Do you put all postage options from cheap 2nd class all the way up to Special Delivery next to the price of the every item just on the off-chance?

I give customers different delivery options based on the weight of their shopping cart, with subsidised shipping for larger orders (eventually reaching free shipping). But I still see people abandon their carts.

[John G]

It seems that being "transparent", which may result in ripping the customer off,

By transparent I meant putting the postage cost visible beside the item before you click buy now - how is that ripping people off?

[Lee]

Maybe it would be a good idea to have a chart below each product description giving 'typical' prices

1 mug £x
2 mugs £x
5 mugs £x

I think I will do something like that....

[Lee]

...another thing....if you selling at a stall etc say a mug for £7 it becomes impractical to sell it onlline for the same price if you offer free P&P...obviously your online profit will be a lot less...and you cant really bump up the online price to cover the cost....if anything eople like to see things cheaper online..... how do you get around that?

[JSR]

By transparent I meant putting the postage cost visible beside the item before you click buy now - how is that ripping people off?
I've explained why. The price of postage for each item varies depending on the weight of the order. If you say you're going to charge £3 postage for each mug and the customer buys four mugs, he'll be paying £12 postage when it only costs you £6. The customer will feel that paying twice the actual postage cost is a rip off - even if that isn't the intention.

[JSR]

Maybe it would be a good idea to have a chart below each product description giving 'typical' prices

1 mug £x
2 mugs £x
5 mugs £x

I think I will do something like that....
Trouble is that you can't do that for every combination. Postage on a coaster might be £1, but if bundled with a mug the postage for the coaster would be £0 because the cost of mug postage would cover the coaster, too.

I don't profess to have any answer. Postage is a tricky thing to get right. The only real way to do it is to be big enough to ship 1000s of item each month so you can negotiate a favourable courier deal and charge everyone the same low price regardless of order size.

[pitkin2020]

...another thing....if you selling at a stall etc say a mug for £7 it becomes impractical to sell it onlline for the same price if you offer free P&P...obviously your online profit will be a lot less...and you cant really bump up the online price to cover the cost....if anything eople like to see things cheaper online..... how do you get around that?

Not at all, your probably making more profit offering free postage over the net selling it at the same price on a stall as you have no stall/travel costs etc.

Agree with JSR its hard to find a happy medium. Sites that advertise free P&P aren't actually offering free P&P (unless they like to give stuff away) as the cost of the postage has to be built into the product price. Free postage over X amount is a good alternative and sometimes encourages people to spend a little more aswell, as long as you items aren't in the £5-£10 bracket and you have free delivery on orders over £150, they have to be respective. Probably around 3 times more than your average product price is a good bar to set.

[djhutton]

I give 'postage included' prices for some lightweight items and also those where that's been negotiated into the price, say for a range of club merchandise. Otherwise I either (on one site) offer a standard delivery charge for each order irrespective of size (different for UK, Europe, Rest of the World) that seems to work well and its swings and roundabouts, a few I lose out, but most I'm ok so over the last 7 years or so my postal charges have been covered by customers payments.

On another site I set a price per item and list that alongside the listing, the website allows me to set up a p&p based on weight, so I use that to facilitate this system. A cap is set up so that it doesn't get ridiculous, as that's always a possibility, and to allow for the multiple purchase/less postage scenario I have on some items set up ' 'buy 2 get £1.00 off' type discounts and that seems to work as well. Its a bit fiddly to set up but worth the effort.

I don't lose any orders due to postage, the site tracks each order as it's entered so I get to see how far they get if it's aborted, and so far any aborted orders are due to payment issues, they are usually resolved by the customer entering their details again, failing that I can phone or email to see what the problem was.

Both sites are using Actinic, which although not being a cheap option do seem to work well and the support is good, so in my opinion worth it.

Just my 2 penneth

DJ

PS I'm pretty sure that with Actinic you can offer free or reduced postage for multiple buys like 'buy three get free postage', I'll have a look at that.

[Mattie]

We use opencart and you get multiple delivery options you can install,
i use the royal mail one, so it works the price out to the exact cost royal charge, so for example 1 mug is £2.48 but if a customer buys four it work it out for the weight not times £2.48 x 4 i think this is a much better system, we can also set certain products free delivery and when a cart reached a set amount it gives free delivery.

[pitkin2020]

We use opencart and you get multiple delivery options you can install,
i use the royal mail one, so it works the price out to the exact cost royal charge, so for example 1 mug is £2.48 but if a customer buys four it work it out for the weight not times £2.48 x 4 i think this is a much better system, we can also set certain products free delivery and when a cart reached a set amount it gives free delivery.

what version of opencart are you using because I can't get the royal mail extension to work with the latest version?

[Mattie]

i'm running 1.5.1 as everybody who has upgraded has had numerous problems with quite a lot of the features, i've not had any problems with 1.5.1 so don't see the point of changing.

[JSR]

We use opencart and you get multiple delivery options you can install,
i use the royal mail one, so it works the price out to the exact cost royal charge, so for example 1 mug is £2.48 but if a customer buys four it work it out for the weight not times £2.48 x 4 i think this is a much better system, we can also set certain products free delivery and when a cart reached a set amount it gives free delivery.
That's what I do with my ZenCart, but this is what the thread is about - the customer doesn't know "up front" what the postage cost will be. Hence the OP's article about shoppers abandoning their carts once they see the postage price.

I agree that doing it this way - only charging the cost that Royal Mail charges for the weight of the items - is the right way to do it because you never end up overcharging the customer, but it's this that apparently stops people from checking out.

[pitkin2020]

That's what I do with my ZenCart, but this is what the thread is about - the customer doesn't know "up front" what the postage cost will be. Hence the OP's article about shoppers abandoning their carts once they see the postage price.

I agree that doing it this way - only charging the cost that Royal Mail charges for the weight of the items - is the right way to do it because you never end up overcharging the customer, but it's this that apparently stops people from checking out.

thats why you have to couple it with a maximum postage charge i.e £5 or free P&P over £25 orders. Its also a good idea to give an average price and make it clear postage is charged by weight, a small item will be x amount a large item z amount. Its clear albeit not accurate but its a fair system as those who order more (weight wise) pay more than someone ordering 1 light item. I think the issue is if you don't cap the postage especially when they order mulitple items and the P&P heads into the double figures.

[JSR]

thats why you have to couple it with a maximum postage charge i.e £5 or free P&P over £25 orders. Its also a good idea to give an average price and make it clear postage is charged by weight, a small item will be x amount a large item z amount. Its clear albeit not accurate but its a fair system as those who order more (weight wise) pay more than someone ordering 1 light item. I think the issue is if you don't cap the postage especially when they order mulitple items and the P&P heads into the double figures.
Well, I do this anyway. Up to £30, the customer pays the Royal Mail prices of their chosen delivery option. Above £30, I subsidise the postage with a "Flat Rate" option (customer can still choose Royal Mail if they want their items quicker). The higher value the order is, the more I subsidise on the "Flat Rate" option until I make it free shipping.

But that isn't the issue. If someone's prepared to put together an order of £100+, then they're not going to be put off by postage costs anyway - even full courier price is only a fraction of the order total. Where carts are abandoned is the small items, whereby the postage option can be a half to two-thirds of the cost of the item. You attract the customer in with "photo mug for a fiver", and they run a mile when postage is over half that again - even though the combined cost of the mug plus postage might still be cheaper than the cost of a mug with free postage from elsewhere.

Not a lot you can do about it, though. There's no solution to this unless you ship enough to negotiate a low cost with a courier. It doesn't matter how much you wrap it up in "there's a maximum postage charge" or "free delivery over £x" - because neither of those things matter a hoot to someone buying one mug for their granny.

[pitkin2020]

Its hard to get the right balance I agree. It should get easier though to find a better balance as your site grows and you can start seeing what the average order is, is the average order enough to offer free postage or could you set a flat rate, per spend £10, £20, £30+ etc. Until you know what the average spend is though its hard to see how much profit is in each sale, even then it could change if the average spend dramatically drops.

I see quite a few sites do charge just a flat rate of say £3.95 / £8.95 and whilst I don't mind that I have to be spending enough to justify it, I don't want my P&P cost to be more than what I am buying lol. I have with a supplier that P&P is £8.95 regardless of what you order, then orders over £135 are free delivery. I refuse to spend less than £60 on any order or its not worth it, then if I step over £70 I go the whole hog and get the free delivery. If your dealing in bulk its not a bad way as it does encourage more spend just not very good for single low value items.

[ASLCreative]

I have found that many of the shopping carts that calculate postage prices by weight do not factor in the total value of the order as well. This is a problem if you use Royal Mail, as the value of compensation for the goods is capped at 100 x cost of a 1st class stamp. If the order exceeds that compensation level, then you need Special Delivery.

Then the problems start because if the weight of the order exceeds 2kg, the cost of Special Delivery is £22.70. To overcome this one could split the order up into several parcels and send them by 1st class post or use the Royal Mail Standard parcel service.

If you can negotiate a deal with a courier then that is the best method. Then you can just say shipping is £x. Of course with many couriers you run into inflated costs for deliveries to non mainland UK destinations. Some of the courier prices I have been quoted for delivery to Northern Ireland are very steep- £23.00 delivery charge for an order with a value of £60.

It is a shame the Royal Mail have such a complicated pricing structure.