Shipping is the bane of existence for many e-commerce operators. We have heard for years that both wholesale and retail customers want fast and free shipping. That is not necessarily a problem for big-name operators whose annual sales are in the tens of millions of dollars. Offering both isn’t so easy for smaller operators.
How do you feel about fast and free shipping? Perhaps you are willing to offer one or the other, but not both. Trying to offer both would mean having to increase your prices to a level you are not comfortable with. Ultimately, offering both could put you out of a business.
There is no easy answer to the fast and free shipping conundrum. Every e-commerce operator must approach shipping based on current circumstances and future goals. Despite being one of America’s leading suppliers of wholesale sunglasses, even we need to constantly evaluate our shipping policies.
Customers Want Free
The issue of whether e-commerce operators should offer fast and free delivery dates to the last few years prior to the COVID pandemic. Back then, e-commerce was in the midst of what was being dubbed the ‘Amazon effect’, a scenario in which online shoppers were beginning to expect all retailers to deliver as quickly as Amazon.
The Amazon effect was so profound that a 2019 survey ranked fast shipping as the leading factor in determining whether a customer purchased or not. More than half of the survey customers indicated that 2-day delivery would convince them to buy. Approximately 39% said that next-day delivery would do it for them.
Things have changed since the pandemic. A 2021 Shopify survey showed the tide had shifted. Not only were customers more inclined to be tempted by free shipping, but they were also willing to wait longer for it. What happened? A surge in online retail meant longer wait times during the pandemic. People got used to waiting longer for deliveries. Once that happened, their focus turned to free shipping.
Shipping Affects Pricing
Everyone in e-commerce is aware that shipping affects pricing. If we offer free shipping, we need to build that expense into our wholesale prices to some degree. We cannot afford to absorb the entire cost of shipping and still make our margins. You are in the same boat. Offering free shipping at retail requires you to adjust your pricing accordingly.
When you throw speed into the mix, you’re talking about additional price increases. Why? Because the fastest shipping options cost the most money. You might spend $3.75 to ship a package USPS first-class. But ship it overnight instead, and you’ll easily pay twice that amount.
Your thing is that you know how much your customers will pay for designer sunglasses. You also know the kind of margin you need to make doing business worthwhile. We have the same considerations as a wholesale distributor. Sunglasses still need to be paid for and we still need to make our margins.
It’s an Individual Decision
We wish we could tell you that all e-commerce wholesalers and retailers should offer fast and free shipping. But we can’t. Some should offer fast but not free; others should offer free but not fast; still, others can afford to offer both. Every business must make that decision individually.
For our part, we continually strive to offer the absolute best wholesale prices on designer sunglasses for men, women, and children. We do what we do because we want our business to make money. But we also want to see retailers who buy from us succeed. Hopefully, we are helping you do just that.
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