(Australian Retailers) Increasing stinginess with shipping limits

rawm on 25/11/2016 - 09:44
Last edited 25/11/2016 - 09:44

Hey all,

I love free delivery. The fact that many stores include shipping in the price of their goods is what makes it clearer, simpler and more effective to know how much you're paying. To have to trawl through pages to find the shipping rates etc is the bane of my life.

Just an observation over the last 2-3 years; I've noticed countless Australian retailers increasing the 'minimum spend' for free delivery.

BigW, Target, ASOS, ABC Shop, Connor, Tarocash - Look at 'Dusk' for example https://www.dusk.com.au/ ; they now have a minimum spend of $150!…the list goes on.

Why don't more Australian Retailers bundle the cost of delivery into their offerings? (Apart from the obvious) Why are they slowly increasing the basket amounts and turning many people away from purchasing online with exorbitant minimum spends to get free shipping?

General Discussion

Comments

  • Clear on 25/11/2016 - 09:56
    +9

    Shipping costs going up? By combining shipping and price together it makes their products look more expensive than the competition. I look at the price long before I consider shipping.

    • rawm on 25/11/2016 - 09:59
      +5

      Potentially it will make prices higher but the main point of my argument is that Shipping cost is ultimately a huge barrier to buying online. Removing this barrier and incentivising online purchasing with simplifying the costs would be more effective no?

      Thanks for sharing your view :)

      • MrBear on 26/11/2016 - 22:34
        +2

        It is probably cheaper keeping stock in a warehouse and having it boxed and shipped straight to the consumer for free, rather than having the item boxed and shipped to the store and them having to pay rent and wages for the store.

        • rawm on 27/11/2016 - 08:06

          Exactly!

    • [Deactivated] on 25/11/2016 - 11:21
      +5

      that may be the case, but there have been plenty of times i've had a shopping cart full of stuff only to abandon the purchases when at the checkout stage because of the excessive shipping costs

      • Clear on 25/11/2016 - 11:32
        +2

        Yep. Some sellers really have their calculator off or are wanting to profit from their shipping.

  • bobbified on 25/11/2016 - 09:59
    +14

    To start with, Australia Post is a pain in the butt - they've increased their prices and also increased their delivery times - that forces some companies to use couriers that cost more.

    Buying cheaper items might mean that there's not enough margin in that product's pricing to absorb that extra $10 or whatever it costs for postage.

    Would you prefer if they increased the price of a $50 item (plus $10 shipping) to $60 which then included "free" shipping?
    (If they did that, the people who walked into their physical store will be paying $60 instead of $50 too).

    • apple2016 on 25/11/2016 - 10:25
      +3

      Also take into account all the missing / damaged deliveries. Unfortunately in this case the delivery guys (Australia post) walk free but the retailers take the cost on them selves to maintain customer goodwill.

    • MrBear on 26/11/2016 - 22:34
      -5

      It is probably cheaper keeping stock in a warehouse and having it boxed and shipped straight to the consumer for free, rather than having the item boxed and shipped to the store and them having to pay rent and wages for the store.

      • MrBear on 28/11/2016 - 11:10
        -1

        Cool, downvoted for some reason, but upvoted further up. Does what I say not make sense somehow?

        You guys are a treat.

  • dasher86 on 25/11/2016 - 10:01
    +4

    you're asking a few different things here so ill try answer them in point form.

    1. the cost of delivering goods has increased over the years. Stores need to push this back onto the consumer somehow. so to qualify for free shipping they need to increase the minimum spend amounts to cover the increased costs.

    2. if stores are bundling shipping into the price of goods consumers are actually paying more for each individual item. this has it's pros and cons.
      Pro is that if you want one item you get shipping included.
      con if you're purchasing two or more items you're effectively paying for shipping multiple times and forgoing any bundling discount.

    • rawm on 25/11/2016 - 10:08
      +1

      Both very valid points, but surely this 'cost of delivering goods' is a bit of a cop out in the online shopping segment. Imagine how many more thousands of transactions are done online now to say, 2012? Maybe I'm being too narrow minded.

      • bobbified on 25/11/2016 - 10:37

        Someone still needs to pay for the shipping regardless of how many orders there are - there's actually the additional cost of packaging as well. The boxes and padding inside don't cheap.

        Most people that buy things online want their items as quickly as possible. When it doesn't arrive quickly (usually due to Australia Post), customers will call and they will be quick to complain if no-one takes their call. So the business needs to make sure that there's enough staff to take customer enquiries too.

        So yes, it's not just a simple case of "postage" costs.

      • ihbh on 27/11/2016 - 06:35

        Maybe I'm being too narrow minded

        You just haven't thought things through.

        If shipping costs were a variable cost, then shipping costs should reduce with increased sales.

        But they are a variable cost. Perhaps slightly mixed if AP/couriers provide a small volume discount.

  • lupiter on 25/11/2016 - 10:07
    +1

    Many of the stores you listed also have physical stores. The cost reflects the price if you buy it there. I agree that online-only stores might find an advantage in offering "free shipping" with the cost of shipping bundled into the item price, but physical stores don't. A store like Target will sell many many times more product through their physical stores, so advertising (and yes, online prices are advertising for going into the store) should reflect that price.

    • rawm on 25/11/2016 - 10:13

      For eg - could Target have a 'Target Online' and a 'Target' presence with separate prices and offerings? If I was a B&M retailer these days I'd be winding my physical presence down slowly. One of the big retailers is sure to go 80/20% online by 2020 IMO.

      • bobbified on 25/11/2016 - 10:39
        +7

        "Target Online" and "Target"? - the first thing potential customers will do is compare the prices and notice they're different.

        Then there'll be a lot of complaints: "Target Online" claims free shipping when they actually just add the postage cost to the retail price that "Target" is selling for!

        No doubt there'd be a whole Ozbargain thread dedicated to that topic!

      • lupiter on 25/11/2016 - 13:41
        +1

        Maybe by 2040, but not in the next 4 years, no way.

        There's plenty of stuff I, as a young hip online-shopping type won't buy online. Because I need to know the size, or the weight, or the fit, or I want to check the quality.

      • greatlamp on 27/11/2016 - 15:36
        +1

        Dick Smith used to do that. They wouldn't match prices with their own online store.

        It was a disaster

  • djsweet on 25/11/2016 - 11:23
    +5

    A <500g item costs around $10 to pick, pack and post in Australia. Obviously the minimum spend must be fairly high to absorb this kind of cost.

    I hate how I can buy a book for $10 delivered from BookDepository in UK, but can't even post it for that much here. Australia Post has increased its price for local businesses but hasn't for overseas postal services (probably because of long term contracts). This is extremely unfair for Australian businesses and pretty much kills small-time eCommerce. What are retailers supposed to do other than pass that cost on to the consumer? Its not stinginess, its necessity.

    • PJC on 25/11/2016 - 12:59
      +3

      And Australian postage was quicker 100 years ago.

    • altomic on 25/11/2016 - 15:34
      +7

      I just bought a 2nd hand novel from the UK for $7.25 delivered. Less than the cost of postage alone in Australia.

      • captobvious on 27/11/2016 - 01:52
        +1

        and i bet you it got to Australia quick but aus post dragged their heals.

  • spackbace on 25/11/2016 - 11:35
    +3

    Red Rooster online - prices are jacked up to incorporate 'free' shipping
    Dominos online - just look at the price difference between pickup and delivery. But y'know, 'free' delivery…

    If retailers lifted prices up to compensate for delivery costs, when they have a real B&M store to compare those prices to, they wouldn't get business and we'd get posts in here bagging the crap out of them for those practises.

    Until the shipping/freight costs are reasonable, I don't see this changing.

  • altomic on 25/11/2016 - 15:35
    +1

    Why is it called shipping when it goes by truck?

    • roddy84 on 25/11/2016 - 15:50
      +6

      Because about 1 in 10 people don't say trucking clearly and it comes out sounding vulgar.

      • altomic on 25/11/2016 - 22:08
        +1

        that's trucking ridiculous………….I see what you mean

        • greatlamp on 27/11/2016 - 15:38
          +1

          He's just shipping you

      • captobvious on 27/11/2016 - 01:52

        What the truck you talking about?

  • lainey13 on 25/11/2016 - 21:21
    +1

    Yeah, I don't shop online as much as I did in the UK. Been spoilt there so now I refuse to buy anything substantial that has a shipping cost, and if I can't do a free return. Online shopping is just too risky without having the ability to shop risk free.

  • Lostatsea12 on 26/11/2016 - 09:00
    +7

    I am in the online world and run several stores.

    Your complaint should be not with the retailer but with the Australian Government and it's monopoly in Australia Post, the only viable solution to moving large volume at reasonable prices.

    Here are some facts

    • I can get items shipped to me from China faster than I can get things shipped across 2 suburbs from Australia Post.
    • Australia Post is the second most expensive postal service provider in the world on a per population basis.
    • The consumer is obsessed with price not quality, this is driving down margins to the point that there is not enough to subsidise your "free shipping"
    • Australia Post has increased its prices dramatically in the last 6 months and randomly choose the way they charge (weight or Cube or flat price).
    • The average order costs us about $5 more to ship than you actually pay.
    • Some orders to remote Australia can cost the retailer $150 over what you actually pay in shipping under Aus Posts new regime.
    • Courier services in Australia are absurdly overpriced, slow and unreliable (except for Startrack that is owned by, you guessed it, Australia Post).
    • Express Post is a joke, less than 20% of parcels actually make it the next day if they are moving between major centres and the "guarantee" is for the cost of postage only.

    I am not suggesting for a minute that I don't make money, I do, but neither I, nor any other retailer, are making money out of postage in Australia.

    I agree that it would be great to see our online world include "free shipping" in the price, just like Bricks and Mortar include their rent, power, wages etc etc into their prices but until it becomes universal across all stores, the customer will search for the lowest price first and foremost and the problem still remains that I can ship an order to a Metro Area for under $15 but if the shopper happens to come from say remote WA (just as an example) that shipping cost becomes $150. The items I am talking about are $20 - $40 with less than 20% margins.

    As a consumer, I 100% agree, I love free shipping, as a retailer, I know how hard it is to satisfy that desire in the consumer given the services we have to work with. This is the major reason why online is still under 15% of most stores turnover.

    • Roney on 26/11/2016 - 16:28

      Fully agreed re Aust Post's absurd services and cost. This also paves the way for courier services on pricing.

  • donnashuggy on 26/11/2016 - 09:30
    +1

    The truth is the buyer is better off paying for postage as a separate component.For a free postage item the postage component is built into the selling price which is fine but if you purchase for example 5 of that item you are paying the postage 5 times, this is fact.

  • Spending2Much on 26/11/2016 - 11:53
    +1

    A few bike stores I shop around at to get what's on special (rarely there are any specials) one has a $20 spend for free shipping, the other, $90.
    Most of the time your adding items to the cart to reach the free shipping value. I now generally order from the $20free ship store over the $99, BUT, I have to be prepared to wait. Order placed last week Sunday, 13th, sent 14th, still not here yet. Hoping by Monday. The $99 spend, shipped on Monday 21st, arrived yesterday.
    That's pretty good considering shipping from over east to country WA takes longer than normal and I don't expect it to arrive with any haste.
    Whether Australia post actually attempt to deliver is another story. Most times a cars gets deposited in letterbox for collection of package from depot rather than any attempt to deliver to the house.
    I donrnlaybany blame on the ship/sender for Australia post incompetence or excess charges

  • tommy-darko on 27/11/2016 - 09:21

    Just bought a new fridge from Appliances Online with free delivery, installation and removal of old fridge. Pretty happy about that! Granted, that's shipped via courier and not Aus Post.

  • charzy on 27/11/2016 - 10:45
    +1

    Just wait until Amazon comes to Australia next year.
    If the current retailers do not change their attitude towards shipping, Amazon will destroy them assuming Amazon provides the Prime service as they do in the US.

  • NickosFoivos on 27/11/2016 - 11:00

    Aussie Retailers have been playing monopoly with the customers. You do not get the price-diversity as you used to.
    They trying to be smart @sses. I usually try to support the small businesses.
    Auspost is utterly sh!t.

    Many things can be said. Waiting for Amazon!

    • BertieBrown on 27/11/2016 - 11:46

      Truly I'd love the opportunity to support smaller businesses, particularly family owned and run retailers in my local area, however my experience; just as likely the opposite of others I understand has been that larger retailers service, price and returns policy has always been far better. Now, price I appreciate may not be something that can be easily adjusted to compete with larger businesses but service and returns policy is. In my mind, I would probably pay a small difference in price to support small local businesses, provided that the service and returns procedures and policies was second to none. I can't support shopping with small businesses just because.

      • NickosFoivos on 27/11/2016 - 15:33

        Return policies have been exploited to another level. Am not sure if it is an Aussie thing, but is sorta redicilous. Had been working for Zara for many years and people wanted to do any kind of returns. And tbh, was really embarrassing. From my retail experience, only 10% of the returns were legitimate.

        Anyway, each to their own.

  • [Deactivated] on 27/11/2016 - 12:23

    I think a large part is that people are rorting the returns system. If people browse, say Target, and buy whatever and return what they don't like in reality, it costs the retailer a lot for processing, postage and staff and there is no loss for the flippant customer. Setting the mnimum spend would shield against some of the annoying tyre kicking.

    • rawm on 27/11/2016 - 12:28

      Agreed, but then include high returns penalties or all together remove this 'free returns' concept to shopping online.

      Shopping online is different to buying B&M. Yes, it comes with risk. Yes, you can't physically touch/try on the item. But the big Pro should be the lower price compared to physical stores.

      With retailers offering easy returns it makes it easier to game the system with simple 'change of mind/it didn't fit me' responses.

Login or Join to leave a comment
Login Join