Min order values

[gibby]

Im just wondering how others get on with placing a min order value on websites?

Do you find it hits business or does it increase it with customers buying more to hit the level?

We are just putting up our xmas products & hit an issue last year that many customers purchsed just one item for £5.
The challenge was that on its own we lost money on these orders due to courier costs.
As we are always so busy over this period we don't really have the time for silly small orders.

Cheers

G

 

[berts]

Are you offering free postage on these products?

Surely you should just make sure that you have enough margin on the product to cover the courier costs if you are offering free postage. Or alternatively can you not just charge them shipping?

I've always thought that minimum order values are for companies dealing with the trade. I've not really come across it on retail sites.(presuming you are a retailer)

 

[gibby]

yep we are retail & yes we charge a courier fee of £4.99 to be competitive but it actually costs us £5.99 so it costs us £1 per order on courier fees plus any pakcing charge etc.

The item is around £5 & we make £1.50 per item.
If its purchased on its own we scrape a small profit but it its easily damaged so packing time & packagin blows out the profit.

I know the obvious answer is use royal mail to send them but last year around 20% went missing or were damaged on arrival when sent with royal mail

What we want is customers to buy these along with other products & we do sell alot of them.

Thanks

G

 

[berts]

yep we are retail & yes we charge a courier fee of £4.99 to be competitive but it actually costs us £5.99 so it costs us £1 per order on courier fees plus any pakcing charge etc.

The item is around £5 & we make £1.50 per item.
If its purchased on its own we scrape a small profit but it its easily damaged so packing time & packagin blows out the profit.

I know the obvious answer is use royal mail to send them but last year around 20% went missing or were damaged on arrival when sent with royal mail

What we want is customers to buy these along with other products & we do sell alot of them.

Thanks

G

Who is your courier? We use parcelforce and from memory i think we pay around £4.00 ex vat for the first parcel. We've been quoted similar rates from dhl aswell.

We price our products so that we will wont make a loss if a single unit is purchased, because theres no point sending stuff out at a loss. There are companies in our market that are cheaper on the same products, but ultimately if you can't make profit on it why sell it?

I would be tempted to put the single unit price up, and then see if you can do an offer on it when you spend x pounds, or do some sort of multi buy offer if its purchased with another product

 

[gibby]

Thats a really cheap rate for delivery. I think we have a rate of £4 for very small packets with Interlink but these items do need packaging to stop damage.

It is an issue with alot of the items we used to do. Customers normally spend £60 upwards but last xmas these sold like crazy.

With similar items like this we have tried upping the price but it stops selling as so many other stores compete.
The trick appears to be deterring customers from placing such small orders.

The item is worth having as it also pulls in customers who order other items but I agree its not worth sending orders if they don't make a profit

G

 

[berts]

We do a lot of fragile items, and have the bubble wrap and air bubbles costs. One thing we did recently to compensate for this was increase our postage charges and also increase our free carriage rate from £60 to £95. I was quite nervous about doing this as i thought it would reduce the amount of orders. Its not affected the number of orders that we are taking at all, and if anything we are increasing business.

Maybe you could add 50p or £1 to your postage charge and trial it for a few weeks to see if it reduces your sales. Also i would think next to that product heavily advertise other products.

We have three postage categories on our main website for each product. Small items, medium items and fragile items. If we have a low margin product or a fragile item it goes into the fragile items category and the customer is charged a higher postage rate, but the initial price on the site is still competitive. This compensates for the lower margin, and enables us to make a profit, whilst trying to compete with other people selling too cheap!!!

 

[gibby]

Thanks for that some really good tips.
Its quite daft but we are one of the cheapest for delivery amongst our competitors but customers do keep complaining that we are more expensive than others.

When we reduced our delivery prices down from £5.99 to £4.99 some time back, orders really jumped up but we may try putting them up again & watch what happens.

We do offer free delivery on orders over £60 but we also get alot of orders where customers order more than one size & return those that don't fit.
This means we do get hit for delivery on many order under the £60 limit when we take the returns into account.
Im thinking of putting this up to see what happens

G