Many retailers calculate their delivery charges according to
value of the goods purchased, the reasoning being that this
simplifies matters for the customer. However, as dabs.com has
realised, this means that the more expensive items attract the
highest delivery charge, even if the cost of delivering them is
comparatively small.
Some charge by the number of items purchased – but again, a
large number of inexpensive items could incur unreasonably high
charges.
Others have fixed shipping costs – which is a bargain for large
purchases, but can seem unreasonable for small orders. This
prompted a lawsuit against Buy.com, when a customer alleged that
its flat rate of $1.95 for any CD amounted to an inflated shipping
charge to boost profits in breach of a Florida law.
Another approach is to offer free delivery. But most have found
this financially unviable. Pets.com, for example, went out of
business in part because it subsidised the high costs of shipping
pet food.
The main issue for merchants is that these delivery charges, are
among the primary causes of virtual shopping cart abandonment.
A survey carried out by analyst firm Jupiter Media Metrix in
June 2001, showed that 73% of US consumers evaluated the total
price of products, including shipping and handling, before making
an on-line purchase. Only 10% of consumers believed that price and
order size should drive delivery costs.
Jupiter stressed that firms carrying out this practice ran the
risk of alienating customers, as its results showed that shipping
and handling charges had dissuaded 63% of consumers from completing
on-line purchases. But dabs.com is among a minority of merchants to
follow its advice about basing charges on weight.
Dabs.com consulted its customers and has made the change.
Delivery charges are now made in accordance with both value and
physical weight – a move that the company believes is both
"sensible and fair".
A reader writes...
An OUT-LAW reader in Northern Ireland has written to complain
that Dabs.com's now categorises Nothern Ireland as an "outlying
region" which qualifies for a £5.88 surcharge.
"This on top of the other charges makes them ridiculously bad
value for the 2 million people in Northern Ireland," he writes.
"We're not the only place to "qualify," either. Check out the list
of postcodes to enjoy this prohibitive charge [see:
this page of Dabs.com]."
