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>Shipping fees.>People hate paying for shipping. They despise it. It may sound banal, even self-evident, but understanding that was, I'm convinced, so critical to much of how we unlocked growth at Amazon over the years. >People don't just hate paying for shipping, they hate it to literally an irrational degree. We know this because our first attempt to address this was to show, in the shopping cart and checkout process, "People hate shipping charges irrationally", because they perceive them as unfair additional tax that distorts price and makes it harder to compare prices.If price was including shipping/vat/taxes as single variable no one would be confused by it.Its not a magic asymptotic limit, its basic psychology:People want simple interfaces, simpler solutions, simpler interactions. | | |
I just got back from Europe. I loved the way that the price of each object was exactly what I paid. The coffee for 2 euros? It actually cost 2 euros.Now I am in the USA. I go to buy a large coffee for $2.79 and I end up paying $3.10. I hate this very much. | | | |
Here right now and it’s nice being able to actually use coins rather than have them be ever-accumulating nuisances as they are in the US. Not that often will you receive/need 0.01 coins and almost everything is priced in multiples of 0.10 outside of supermarketsCurious how this affects the velocity of M0 money | | | |
Well, when you hand over 2 euros that is inclusive of VAT (which if US resident you are not required to pay/entitled to rebate from the government) so the cost of a coffee is not really what's shown.edit: all the downvotes.. want to reply instead? | | | |
I did not downvote you, but I can imagine people are down voting you because you seem to be making an effort to miss the point. The point is taxes are included in prices in Europe, but taxes are not included in prices in the USA. | | | |
The biggest issue with taxes, and shipping fees. Is that it becomes this last minute price increase at the very end of your shopping experience. We all know it's there, but it sucks seeing a shipping fee that is half 25% the cost of the item. Give us the full cost up front, if we want it, then we'll take it. But stop wasting our time with only finding out after we've filled our carts. | | | |
The tough part about this is you can't calculate the shipping fees until you know where the customer lives. And there's no better way to make customers leave your webstore than requiring a name and physical address before you're even allowed to browse (or be shown prices). | | | |
nah zipcode is plenty sufficient. You can easily provide a little message on product pages saying, "want to know the full price?", with an input box for your code. Save it in a cookie. Or location aware? | | | |
It's the same as all the prices should be with tax | | | |
The problem is that it's hard to make it really look that simple. If you order a number of items at once, the shipping costs can probably be amortized throughout them. It's difficult to make an incentive system that makes customers want to do that without shipping costs. | | | |
"People want simple interfaces, simpler solutions, simpler interactions."Under what circ*mstances? Numerous airlines, Southwest excluded, come to mind as an anti-example--moving toward a more complicated, convoluted pricing and buying model for tickets. | | | |
What consumers want != what corporations want.If that complex scheme is more profitable, it will be used.Perhaps this interface to buying tickets allows them to segregate the market better or exploit some psychological flaw. | | | |
I agree that what consumers want!=what corporations want.The implicit point in my post above is that consumers are voting with their wallets for the low-cost fares, that are complicated and convoluted. So in this instance of airline tickets, there is large consumer demand for cheap tickets, simplicity be damned. Southwest is the option for those who want simple and are willing to pay for it. Amazon gave consumers simple and cheap. | | | |
And airlines one of the most hated experiences. It's proving the point. | | | |
What about tipping culture then? I wonder if that will go away as ecommerce becomes the norm. | | | |
Possible difference: - Shipping charges are presented to the buyer in a visceral way before they commit to the transaction. - Menu prices (sans tip) are presented to a diner and then they commit to the transaction. Later on, the tip rears its ugly head. This time delay is possibly enough for people to separate the tip as "later me's problem", or at least blissfully ignore it. | | | |
Also restaurants aren't all exactly the same, so lack of tipping can't be used as a strong point of comparison against their competition.Two TVs for the same base price, one with $49.99 shipping from Best Buy, and one with free (with prime) from Amazon? I'll go with Amazon because the product is exactly the same. Those two Italian places down the street, except one of them doesn't do tipping? Sure I'll take that into account, but more importantly, which one has better food? And which has a better base price? Which one is quicker (or maybe which is more relaxed)? Which one gets my order right? This is all just as or more important than whether or not they a part of the tipping culture. | | |
FAQs
The cost of shipping remains a key factor for both consumers and retailers. 62% of shoppers said they won't consider purchasing from a retailer that doesn't offer free shipping.
Why do people charge so much for shipping? ›
The major causes for higher shipping costs are inefficient cargo ships, shipping container shortage globally, limited supply of commodities, and increased consumer demand. Each of these factors add pressure on the international shipping rates. Why do companies charge so much for shipping? Shipping is a complex process.
How much are customers willing to pay for shipping? ›
In a recent survey by First Insight, a third of the respondents – 62% more than last year – said they'd be willing to pay shipping costs of at least $10. Three out of four Gen X and Boomer respondents (roughly ages 60 to 75) said they'd be okay paying $20 or more.
How do you explain shipping costs to customers? ›
Be transparent with your shipping costs
Though leaving them out at the beginning may make your product offer more attractive, in the end, it will cost you potential customers for good. Be upfront, break down your total costs clearly so that people know what to expect, and have no awful surprises at the checkout.
How do I avoid paying for shipping? ›
Picking up your item at a store also lets you avoid shipping charges. If the item you want is available at a nearby store, you can pick it up as early as the same day. If the item isn't available nearby, you can opt to have it shipped to a nearby store for free. It should arrive within five to seven business days.
Do customers care about free shipping? ›
Reasons to offer free shipping
According to 2022 data, 62% of shoppers won't buy from a retailer if it doesn't offer free shipping. This is up from 52% the year prior. Free return shipping is important to 45% of online shoppers.
Why is shipping so expensive right now in 2024? ›
Scarcity of Goods Supply
The production and shipment of goods both domestically and globally are experiencing significant growth. With fewer commodities available for shipping to an expanding pool of buyers, the prices of these commodities have surged.
How much should average shipping cost? ›
On average, a small package can cost about $8, while large packages can cost about $18 to $21 for shipping.” To determine what your individual business shipping rates may be, answer questions such as: Speed: Are you expediting shipping to get the package to your customer quicker?
Who pays the shipping fee? ›
Para sa Taglish version ng article, basahin dito. Shipping fee is the cost incurred by a seller when delivering a parcel to a buyer. As sellers will prepare and ship their own parcels, buying from different sellers means you will have to pay different shipping fees charged by each seller.
Should buyers pay for shipping? ›
The Buyer always pays for shipping, unless you have decided to offer free shipping on an item. The cost of shipping is added to the order during the checkout process, ensuring that the buyer sees the same item price regardless of where they are located.
FOB destination, freight collect: The buyer pays for the shipping costs, but the seller retains ownership and responsibility for the goods while in transit.
Who is cheaper to use for shipping? ›
USPS Priority Mail is generally the cheapest shipping service for 2-3 day shipping. FedEx, UPS, and other courier companies offer delivery services with similar lead time expectations, but USPS offers the lowest rates.
Should customers pay for shipping? ›
Customers are more likely to complete their purchase when they don't have to pay for shipping. Competitive Advantage: Free shipping can give you a competitive advantage over other online retailers who do not offer free shipping. This can help you attract new customers and retain existing ones.
Why are shipping costs so high? ›
Shipping has become expensive in 2021 for several reasons: lack of shipping containers, unexpected delays, and inefficient cargo processing. The lack of shipping containers was initially caused by millions of empty shipping containers in Europe and the US waiting to go back to China.
How do you negotiate shipping costs? ›
Here are a few ways to do this:
- Ask for a grace period. ...
- Ask to be grandfathered in. ...
- Shop around. ...
- Establish a relationship with an account manager at each carrier. ...
- Offer to use them as your sole carrier. ...
- Understand the way they operate. ...
- Check with your associations for discounts.
Do items with free shipping sell better? ›
Definition: Free shipping is an increasingly-popular option for online shopping, where customers do not have to pay an additional shipping charge. Free shipping is attractive to customers who appreciate simple pricing structures, which in turn makes it a potential competitive advantage for online businesses.
Why is shipping so expensive for small business? ›
Shipping costs FAQ
Shipping costs can seem high due to the complex nature of the shipping process. Multiple factors such as labor, fuel surcharges, parcel weight, package dimensions, item value, and destination all contribute to the shipping rates determined by couriers.