E-Commerce Spending Down?

[GT Bulmer]

E-Commerce Spending Down vs. Last Year

Hello, Forum Members:

Click the link above for some interesting statistics and insight regarding e-commerce spending and online sales and marketing.

The info comes from comScore, Inc., "a global leader in measuring the digital world and (a) source of digital marketing intelligence."

E-commerce spending may be down, but do not worry ... coming in at $29.6 billion this reporting period, it's "only" down 2% from the same period last year.

One interesting trend revealled in the report indicates that "Free Shipping" is on the rise. I've read elsewhere, too, that free, or reduced, shipping is becoming a factor in online marketing.

- Any forum members have statistics to share on changes (positive or negative) to your e-commerce sales this year?

- How about the issue of shipping and free shipping? What's your experience or your opinion?

GT

[Kevin Lee]

How about the issue of shipping and free shipping? What's your experience or your opinion?

GT

Hi GT,

Being a guy who buys things quite often online, I'll typically shop at the places that I trust, offer the quickest shipping and lowest price. For instance, free shipping can sometimes take longer than paying a little more for delivery (and I'd rather have my item 1 week sooner than later). In addition, on eBay, the shipping cost can sometimes be free/lower to attract buyer attention, but then the still cost more than another seller who charges more for shipping.

[GT Bulmer]

Hi, Kevin:

I am a bargain hunter ... but still, I hear what you are saying about sometimes being willing to pay a little more to get something quicker. It depends on the item and why I want it. When I purchase online, I weigh all of those factors - comparative cost, sgipping charges, etc. - and in cases where all factors even the overall cost out between vendors, I will favour the tried and tested seller over a new supplier.

I find that some vendors add the shipping cost on at the end, while some build it into the item cost to try to hide it or lessen it. It sometimes pays to research the field before ordering, but again, for me, that depends on how badly or quickly I want the item.

For me, I prefer having the item cost and the shipping cost separate. However, maybe there is a shift in consumer thinking and maybe online retailers are finding that consumers respond more favourably when it appears that shipping is "free"?

GT

[David Hurley]

In addition, on eBay, the shipping cost can sometimes be free/lower to attract buyer attention, but then the still cost more than another seller who charges more for shipping.

When I sold manga and Japanese "hanafuda" playing card decks on eBay the competition would often offer a lower product price and jack up the shipping and handling so that the total would be more expensive than my "higher priced" items!

Shipping weighty products such as mj sets from Japan by Express Mail Service means free shipping is definitely not an option.

This year my turnover has been par for the course, except August and September... August was one of the best months ever, September one of the worst! Now we seem to be chugging along at a regular rate again... despite hiking prices to adjust for the strong yen against the ever-weakening dollar.

[MichelleJ]

I have noticed quite a few places on the internet offering free shipping for products, but mostly this applies to shipping in the USA or Canada. When you live in an outlying place like South Africha the shipping costs can be exorbitant. For example buying books from Amazon.com sometimes the shipping costs more than the book.

MichelleJ

[GT Bulmer]

... For example buying books from Amazon.com sometimes the shipping costs more than the book.

MichelleJ

Hi, Michelle:

Even in Canada, I have experienced that, too (with other suppliers). Once again, it comes down to how badly I want the item. I can't even imagine some of the shipping challenges you face outside of North America!

GT

[Kevin Lee]

When I sold manga and Japanese "hanafuda" playing card decks on eBay the competition would often offer a lower product price and jack up the shipping and handling so that the total would be more expensive than my "higher priced" items!

Hi David,

I find that mainly only sellers in China/Asia use this tactic on eBay to attract buyers.

For instance, I wanted to buy a Naruto keychain set which was priced at $0.99, but shipping was $8.99, haha

[Kevin Lee]

I find that some vendors add the shipping cost on at the end, while some build it into the item cost to try to hide it or lessen it. It sometimes pays to research the field before ordering, but again, for me, that depends on how badly or quickly I want the item.

I just don't like how some US sellers will charge $5 ground shipping or make it FREE to ship to anywhere in the US... and then shipping to Canada is $30+ (it doesn't make any sense for the price jump). In the past, I've sold tennis racquets to US residents and it only cost about $17 for shipping in a large & heavy cardboard box.

So why should a t-shirt in the US (from an eBay seller) cost $30 USD to ship to Toronto?

[Alan Mater]

Spending might be down, but there's still plenty of spending being done. Only a 2% decrease is hardly anything to worry about.

As Kevin pointed out, I've noticed eBay sellers offering free shipping, but increasing the starting cost or Buy It Now price. So, in reality you're still paying for the shipping.

I'm one who likes to buy online, mainly because it's a lot easier and I don't have to deal with the mad rush at malls and shopping centers. I'll shop around for the best price online, mainly looking at eBay or Amazon.

However, if I happen to get into a crunch, then I'll just suck it up and go to the store and pay full price. Sometimes you just have to, but I try to avoid that situation.

As Kevin also mentioned about shipping prices on eBay, I, too, have noticed that some sellers really inflate the price, even for US shipping. I avoid those sellers unless I can still get it cheaper through them than someone else, but most of the time you won't. It doesn't make any sense, and I would hate being out of the country and getting completely ripped off.

[Kevin Lee]

However, if I happen to get into a crunch, then I'll just suck it up and go to the store and pay full price. Sometimes you just have to, but I try to avoid that situation.

Hi Alan,

But another thing is that if you want "quick" shipping, you'll often have to pay for air delivery which will run the cost up by a lot.

Moreover, places like Amazon or Chapters.Indigo.ca, etc... may offer free shipping on orders, but there's a stipulation of having to spend over a certain amount. And it's even worse at clothing retailers who want an order of $75-125 minimum... and in that case, you're almost better off paying the $5.95 for ground shipping instead.

[Alan Mater]

However, if I happen to get into a crunch, then I'll just suck it up and go to the store and pay full price. Sometimes you just have to, but I try to avoid that situation.

Hi Alan,

But another thing is that if you want "quick" shipping, you'll often have to pay for air delivery which will run the cost up by a lot.

Moreover, places like Amazon or Chapters.Indigo.ca, etc... may offer free shipping on orders, but there's a stipulation of having to spend over a certain amount. And it's even worse at clothing retailers who want an order of $75-125 minimum... and in that case, you're almost better off paying the $5.95 for ground shipping instead.

Yeah, I hear ya on that, Kevin.

It really depends on how bad you want the product and how long you can wait to receive it. Let's say, for example, you're looking for a Christmas gift (Not too far from now), and you're running out of time. You can either: a) Pay the high shipping price; or, b) Go to the store (if that's even an option).

Perhaps you can "kill two birds with one stone" and buy something you personally want just to satisfy the purchase amount requirement.

[David Hurley]

Here's my perspective on high "shipping" costs, as someone who ships high quality mahjong sets across the globe from Japan...

"Shipping" costs amounts to more than just the price you see on the shipping label! (That's why we call it shipping AND handling!)

For example, if you want one of my top-end mahjong sets it will cost around $65-$95 to have it shipped to you.

About $12-17 of that is eaten up by Paypal transaction charges.

The rest goes on Express Mail shipping, and NO I don't offer other methods because they do not offer any security for either party.

A set weighing 3-5kg when packed will cost around 5000-7000 yen to be shipped to the USA, more to non EU parts of Europe, and more still to South America.

And the dollar is only worth 87 yen on Paypal at the moment (down from 120 yen a few years ago...).

I haven't mentioned the cost of getting the sets from the supplier to me, or the packaging costs.

I regularly find myself "subsidising" the cost of shipping sets to places like Russia - even though Russia is one of Japan's neigbours!

The other day someone wanted to buy three high quality sets but hated the "shipping" cost - so the order fell through. No worries. I don't have time to waste on those who think shipping should be free. International shipping is an amazing service - and an expensive operation! Don't take it for granted.

[Alan Mater]

Here's my perspective on high "shipping" costs, as someone who ships high quality mahjong sets across the globe from Japan...

"Shipping" costs amounts to more than just the price you see on the shipping label! (That's why we call it shipping AND handling!)

For example, if you want one of my top-end mahjong sets it will cost around $65-$95 to have it shipped to you.

About $12-17 of that is eaten up by Paypal transaction charges.

The rest goes on Express Mail shipping, and NO I don't offer other methods because they do not offer any security for either party.

A set weighing 3-5kg when packed will cost around 5000-7000 yen to be shipped to the USA, more to non EU parts of Europe, and more still to South America.

And the dollar is only worth 87 yen on Paypal at the moment (down from 120 yen a few years ago...).

I haven't mentioned the cost of getting the sets from the supplier to me, or the packaging costs.

I regularly find myself "subsidising" the cost of shipping sets to places like Russia - even though Russia is one of Japan's neigbours!

The other day someone wanted to buy three high quality sets but hated the "shipping" cost - so the order fell through. No worries. I don't have time to waste on those who think shipping should be free. International shipping is an amazing service - and an expensive operation! Don't take it for granted.

That's just crazy. I do think people expect shipping prices to be low, for some reason. You see the same thing on eBay, although, as already mentioned, some people inflate the shipping higher than it actually is.

When I ship items sold on eBay, I ad a handling fee to offset charges. Plus, with eBay's new policies, we can't offer insurance as an optional option to sellers. This means that we either provide it or don't provide it. Well, I'd much rather provide it than not offer it at all. So, the cost for insurance also gets added into the handling fee, otherwise I'd be eating that cost.

I can see where it would be tough in your case, David, where you have to deal with currency conversions and international rates. You're right about not having any security on other delivery options. I once sold a very high priced item on eBay to someone in Japan, and when I shipped it, I was told there would be no delivery confirmation or tracking once it left the country. It was even shipped Priority Mail. Not sure why that is, but the item got there safely, nonetheless.

[Kevin Lee]

I regularly find myself "subsidising" the cost of shipping sets to places like Russia - even though Russia is one of Japan's neigbours!

Hi David,

With your customers in Russia, can't you just charge a higher rate rather than having to subsidize the extra cost out of your own pocket?

[Kevin Lee]

Perhaps you can "kill two birds with one stone" and buy something you personally want just to satisfy the purchase amount requirement.

Hi Alan,

Either way, it's just marketing tactics compelling us to spend more money based on our "wants/nice to haves" as opposed to "needs".