Whats all this gouging the customer with shipping costs anyhow

Don Bell has an interesting blog article on ecommerce sites, many of which imho are doomed to failure. Some folks believe in boosting their shipping costs in order to make money, rather than doing so on the product. Don’s not thrilled with that concept, and neither am I.

The lost cost of entry to ecommerce often times sets one up to failure, as few will spend time researching their business case. When it costs you 5 to 7 figures out of pocket, you will make darn sure the case is a good one. When its $50-$100, most people won’t.

One can go to any number of ecommerce hosting sites, and for a few bucks to quite a few bucks have a ecommerce site set up for you. Or, you could go download os-commerce, and spend a couple days twiddling and have a site up and running for no out of pocket costs (provided that you already have a domain name and space somewhere).

All examples of failure to research ecommerce, and ones market and potential. As a result, they build it, and no one comes… not even google or slurp bots for a while. Desperation sets in, and all of a sudden they get a few orders, and then realize gee, I’m making negative money. So, rather than adjusting business practices, lets fix it by gouging for shipping.

I think its a hold out from a ebay mentality. Sell the item for $0.01, but with $50 shipping. Personally I like the Dilbert rebate, sell the new widget for $1,000,000 with a $999.990.05 rebate, and hope some rich guy forgets to send in his form!!!

Then there is the matter of drop shipping, eg where you place an order, and an oem, or fullfillment house takes it from there, thus saving you the headaches of inventory, warehousing, pick lists, packing, shipping, tracking, and insurance. Outsourcing such functions does have a cost to it for sure, just as doing so internally does. However, most drop shippers have logistics down to a science and their costs are very low. In fact HF shipping used to be no charge for orders over $50 until fuel went nuts. Now when an ecommerce site uses a drop shipper, and they pad the shipping fees, savvy customers will find this out, and guess what, zero recurrent business.