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Plain-spoken Online Sales Newsletter - covering online conversion techniques, web design, usability, and consumer psychology.

Shipping Cost Sticker Shock

Sure, folks perceive the Internet as an opportunity to shop more conveniently, but not at any price. Shipping costs are part of the total value proposition your customers are weighing as they decide whether to click on that Submit Order button. Listen! You can hear their brains working. "I really like those roller blades, but the shipping is going to cost me $14.95! Sheesh, I wouldn't have spent a quarter of that on gas to the sporting goods store! And look here. For just 25 cents more, these dudes would ship the same package internationally? Like because I’m in the next state, I'm next door to London? I don't think so."

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Best of 2000: WINNER -
Grok Dot Com



Yes, I’m from Mars, so maybe that’s why I find this so bizarre: "Right now, about a third of U.S. e-tailers use shipping as a profit center."1 That’s a business model? And a way to keep customers? Some people out there clearly need to know, "60 percent of those who abandon their online shopping carts did so because shipping costs were higher than they had expected."2 And there’s no way to really know how many customers did complete their purchases, but were outraged when they discovered later they had been hit with outrageous shipping charges that were not disclosed A bunch of those folks won't be coming back, ever.

A friend of mine needed a special microphone line level adapter for a Macintosh and had to have it within two days. Nobody locally carried this $20 item, so she went cruising the Internet. She found several companies who would supply it, for roughly the same cost, within the two-day deadline. One company located only a state away wanted to charge her $30 for 2nd Day Delivery. The other company, on the opposite coast, offered to send the item for just $12.60, the amount the carrier would charge them for the service. Guess who got the sale? And guess who is never going to see my friend as a customer again?

Your customers aren't fools, and it's a rare customer who isn't going to scratch his head when confronted with a shipping charge that looks way out of line. Folks expect to get charged something for shipping - after all, it's a trade-off for the convenience of not having to drive anywhere or hassle with crowds. That's worth something, and customers, for the most part, are fair-minded. But they’re not willing to get taken to the cleaners. When you pull this sort of sticker shock with your clients, your credibility isn’t just weakened, it’s destroyed.

What can you do? You certainly don't need to ship at a loss (although 50% of e-tailers lose money this way - another brilliant strategy). But you can charge at your cost, possibly with a nominal handling fee if absolutely necessary. You will make it up on more sales volume (assuming you’re selling your product or service at a fair profit, of course). Or, you can build your shipping charges into the price structure of your products. Another option is a "flat-rate" shipping fee, which represents the average of all your shipping costs. Naturally, you need some good historical data to set this fee wisely, but your prospects do perceive a lot of value in policies that promise "$3.99 shipping to anywhere in the U.S." (or wherever).

Equally, if not more important, don’t make your customers wait or guess about shipping charges. Most of them won’t; they’ll bail. Make shipping charges (and any other extra charges) clear before you ask for credit card information, make sure the charges are fair, and make the bottom line worth the convenience of foregoing a trip to the store.

Whatever you do, don't abuse your customers with unreasonable (or hidden) shipping costs. Do so and they'll quickly become customers of someone who doesn’t.

1 "Five Battle-Tested Rules of Online Retail." Paul Kaihla, eCompany, April 2001. <http://www.ecompany.com/articles/mag/0,1640,9599,00.html>.
2 Paul Kaihla.


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Another Out-Of-This-World (And Free) Source of Valuable Knowledge

In my never-ending search to bring you the very latest and best e-business info in the galaxy, I've come across a truly exceptional resource. MarketingProfs.com is a terrific site written by some really smart (and really great) people, and it has a ton of practical stuff you can use to increase your business right away. They also put out an excellent newsletter that I look forward to and read diligently (don't even THINK of interrupting me). To learn more and to subscribe, check out MarketingProfs.com.

The Grok

Hey X10, Pop This!

Hey, X10.com dudes! What is with you guys? I hear you're getting more traffic than Amazon, but we all know only one metric counts. So … anybody buying? I got an idea for you. Want to convert more folks to buyers? Here’s the deal: you promise if we buy even one of your products then we never have to see another unwanted pop-up from you again! Personally, I'd leap at any chance to get rid of those awful annoying ads! Who wouldn't?


All You Gotta Do Is Answer the Question

Remember the Dick Van Dyke Show from way back? I wasn't in this sector of the galaxy at the time, but your late-night TV never seems to get tired of this stuff. So, not too long ago, I got to watch an episode that a) had me rolling on the floor and b) got me thinking how humans have an uncanny habit of missing the forest for the trees and making mountains out of molehills (I'm getting to like your clichés a lot!).

Here's the scenario: Little Ritchie comes home and asks Mom and Dad where he comes from. Rob and Laura immediately launch into fits of excruciating angst - "It's the "S" question!! What do we tell him??" After lengthy agonizing, they decide on a course of discreet honesty, plunk their lad onto a living room chair and spill the beans. Ritchie bemusedly takes it all in and concludes, "Yeah, okay, but …" Turns out the neighbor kid comes from Chicago, and all Ritchie wanted to know was his own geographical origin. Rob and Laura, never assuming the answer was that easy all along, look at each other with a mixture of relief and embarrassment. And sometimes real life is even funnier. At the age of 11, one of the Future Now guys saw the word “prophylactic” on a toothbrush at the drugstore and, being a bright and inquisitive kid, came home and innocently asked his parents, as they were watching TV together, what “prophylactic” meant. Just imagine that scene. Rob and Laura had it easy!

Don't see where I'm going with this yet? Stick around.

You (Mom and Dad) are bustling about your cyber-store, minding the shop and waiting for prospects. Your customer (Little Ritchie) arrives with an implicit question: "Can I safely, confidently, easily and happily get what I want to get from you?" What do you do? These days, the Rob-and-Laura approach to e-commerce seems to be to take your prospect by the eyeball and lead her around the store. "Check out this really eye-catching Flash presentation … we make sure you can't avoid it. Oh, and get a load of these totally nifty, strobing icons that draw your attention to our product categories. See, if you let your cursor hover over the category, it turns into a picture of the product rather than that boring pointing hand … our programmers worked a full three days on that one alone!"

This lunacy is perpetuated by the assumption that when your prospect arrives, her principle desire is for entertainment. You think you enhance your brand, your image and your appeal by offering it as an inducement, when that clearly is a distant second to her desire to make a purchase. Every study of online buying behavior proves it. Yet there are folks out there telling you that simple design simply bores your prospects and sends them racing to your more clever, more creative competitors, ergo you need to be more clever and creative with your own site. And isn’t it funny how most of the people who try to convince you of the need for gimmicks are the people who sell the stuff, actual online sales data be damned?

As for the pundits, Martin Lindstrom would have you believe:

"What's more, the rising generation craves constant diversion, change, surprise, and innovation. … The sites that offer surprise and creativity will be the ones that capture consumer attention and brand loyalty."1

Nick Usborne, a guy we admire a lot, is also concerned about homogenizing the online shopping experience. "Every site seems to be in a mad rush to have the exact same systems as everyone else. And in the process, they're in a mad rush to make the customer experience the same. Undifferentiated. Boring." To counter this dreadful fate, Usborne advises, "I think one of the first targets one can aim for is to surprise people."2

Nick is on the right track in being concerned about sites becoming boring, but we need to be careful to distinguish between being refreshing and being surprising. Trust me, the last thing your customer wants when she is in the process of making a decision to purchase is to be surprised! Cute and sexy may have a place, but not when she's deciding whether to trust you over an Internet connection with her credit card number.

What you really need to ditch, if you are interested in making your e-commerce site sell more, is the idea that tools need to look and function like something other than tools. Think of it this way: when did you last see a carpenter's hammer in the latest designer colors that plays a medley of MP3 faves every time you whomp a nail? Sure, it might have novelty value, but after a few days, its real value is going to depend solely on how well it whomps nails. If it can't whomp nails, all that frippery is going to become a liability that singles you out from the crowd in a truly embarrassing way! When you go to Nordstrom’s, do their salespeople sing, dance and do back flips before they’ll help you find what you came for? How would you feel about going in to shop there if every time you wanted to buy something, you had to wait while they did?

Scads of research out there says it plainly: when folks go online to shop, they want to find what they’re looking for, quickly and easily, feel secure about the process, and buy - with no confusion, delay or hassle. You want to distinguish yourself? Then pay attention to the questions your customers are actually asking. Give your prospects true value, safety, confidence, clear and concise options, intuitive navigation. Instruct them, help them, ensure their privacy - in short, convince them you understand and respect their needs, not that your main interest is in parading the latest gizmo.

You don't have to be "boring" about it at all. That's the delightful challenge of Design: how do you accomplish the basic tasks supremely well while wrapping it with appealing, distinctive style? And there is even a role for surprise; it was Rudyard Kipling who said, "Words are, of course, the most powerful drug used by mankind." So, by all means, in the copy and content of your site, harness the magical power of the word to inspire, delight, persuade and even surprise your customers!

But don't get lost in the wrong question here. Everything you do on your site must support the sales imperative, not the entertainment imperative. Think of it as your “prime directive.” You choose among possible layouts, the only question should be which one will sell better (and while not the only factor by any means, an important ingredient of that is which one will download faster). You pick a particular color - make sure it's a color that's going to support sales (you do know color theory, right?). You choose a word - it's gotta be a word that advances your prospect closer to a buying decision. And it's important to keep in mind the great power of any successful process (be it hyperlinks or a shopping cart or anything else) does lie in standardization: people come to have clear expectations of how things work, at which point you can use that to your advantage, or not. Reinforce them and sales go up; “surprise” them and sales go down. The choice really is that clear. When they don’t have to figure out how you’ve twisted the basics, then they are free to focus on shopping. Buying. Spending money. On your site.

Back to Nordstrom. Heed these words of wisdom from CEO Dan Nordstrom, "You don't get paid for innovation …," Mr. Nordstrom says. "You get paid for execution."3 This is a man well-grounded in old-fashioned retailing, who admits he is definitely not a technological visionary, wants to avoid the dangers of frivolous design, and yet has managed to make Nordstrom.com a hugely successful proposition. How? By sticking to the basics and executing perfectly.

The vivid history of the past year ought to teach you Little Ritchie is going to sit there nodding in bemusement while his parents tap dance around his question only for so long before he decides to bag it. Funny though this might be in a sit-com, in the real world, watching an e-business go belly-up because it’s busy getting in the way of what its customers really want isn't very funny at all.

1 "Where Are All the Sexy Surprises?" Martin Lindstrom, ClickZ, August 17, 2000. <http://www.clickz.com/article/cz.2241.html>

2 "Buying Online is Boring." Nick Usborne, ClickZ, March 24, 2000. <http://clickz.com/article/cz.1479.html>

3 "Shop Talk: Nordstrom.com says execute, don't innovate." Ken Yamada, Red Herring, October 17, 2000. <http://www.redherring.com/industries/2000/1017/ind-shoptalk101700.html>


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GROK is taken from the landmark novel "Stranger in a Strange Land", by Robert A. Heinlein. It is a Martian word that implies the presence of intimate and exhaustive knowledge and understanding. Our "GROK" is a keen observer of the world around him and he takes a particular interest in the World Wide Web. The folks at Future Now like him a lot because he's taught them that "sometimes the price of clarity is the risk of insult."

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