E-tailers – To charge for postage and packaging or not

Had an interesting discussion today. Was querying the validity of offering free delivery over charging for it. Its something i probably should have give much more thought into when launching IrelandCostumes.com but since personally i hate tricky charges that end up winding up the end total when shopping online – i made a hasty choice to offer free shipping. Ok so by “free” it is factored into the price – but at least unlike some of our competitors (who charge 27 Euro to deliver – even if the item doesnt cost as much as the shipping!!!) i felt customers would get a upfront view of the costs.

Then this morning Alan Keane Co-founder of Cubic threw me an analogy that made my head spin and had me in an instant (in a kinda of Satori moment) completely change my mind.

“Have you ever heard of someone tell you their flight only cost 1 Cent with Ryanair? Well they actually paid 50quid ish in taxes, but all they think the flight cost was 1 Cent. Yeah there were other costs – but in their mind they were for other things” said Alan. And it makes sense.

So i chewed it over for a while, i’d rarely pay postage for a low ticket item like a DVD, but then again postage for these items is cheap and rarely via registered postage etc; but then somewhere like E-bay i’d expect to pay the postage and packaging. It all comes down to meeting unconcious customer expectations. Keep low ticket items, with low shipping costs free. Keep high ticket items (350+ Euro) free. And make medium ticket items (20 – 349Euro) at a reasonable, easy to understand fee, that encourages buying more items to divide the per unit cost of shipping and encourages WOM (Word Of Mouth) marketing.

So it’s been decided IrelandCostumes will change over to item price plus a fixed shipping cost in Jan. That way for price comparing customers out there its first glance cheaper and then better postage rates too should pulling in more multiple item orders.

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