An unexciting but important part of ecommerce is shipping. A sale is not complete until the customer receives the goods. Yet all too often we search for the cheapest delivery method.
Indeed some of the more sophisticated order management systems measure the dimensions, weight, and destination of every parcel and then compute the cheapest delivery method. The goal is to reduce costs, increase margin, and thus be more competitive.
But merchants should not choose a delivery solution on cost alone. Other factors are equally important.
One is customer satisfaction. A customer does not care about the carrier or how much it costs the merchant. All a customer cares about is a prompt, hassle-free delivery.
There was a time when pleasing the customer was the only criteria. After all, keeping customers happy means that they return to buy more. Increasingly, however, ecommerce sales are done on third-party platforms such as Amazon and eBay. Keeping those companies happy is also important.
Delivery via Amazon, eBay
Both Amazon and eBay offer delivery services. I imagine that they make a profit out of this. The price they charge is certainly competitive in the U.K., however, and I am tempted to use them.
Amazon collects metrics on its sellers. Some metrics are critical, and there are dire consequences for merchants if they break them. Other metrics, we are told, are no so critical. I am not sure I believe Amazon in this. If the metrics did not matter, why collect them? For the delivery portion of any order, Amazon tracks how long it takes to dispatch, what percentage of orders are tracked, and how long it takes the orders to be delivered. The last two are important.
Both Amazon and eBay offer delivery services. I imagine that they make a profit out of this.
As far as Amazon is concerned, a parcel is tracked only if a seller uses a delivery service that Amazon approves of — one it can interface with to confirm the tracking number and delivery. Any other service is not tracked as far as Amazon is concerned. This has consequences if you use a service that does not integrate with Amazon. It could result in a tracked metric being zero instead of 100 percent. It also can mean that Amazon does not recognize the delivery confirmation if a dispute occurs.
In the U.K., Royal Mail offers an excellent 2-3 day delivery service that is low cost and includes delivery confirmation. It is cheaper than the Amazon offering if a business sends more than 2,000 parcels a year. Unfortunately, Amazon does not recognize this service as tracked, nor does it accept the delivery confirmation as proof of delivery.
No negative feedback
Indeed Amazon is now offering to remove negative feedback regarding delivery if you use the Amazon service. Thus Amazon prefers that merchants use its delivery service. At the moment that preference is reflected only in the metrics that Amazon says mean nothing and in the offer to remove poor delivery feedback.
But I wonder if the use of Amazon’s delivery service will eventually influence which sellers obtain the Buy Box. Amazon’s goal, after all, is presumably to make more money. If a seller uses Amazon’s delivery service, why not give preference to that seller, other factors being equal?
eBay has not gone this far. It recognizes Royal Mail’s delivery confirmation. But it must be tempting for eBay to promote its own service.
If this trend continues, most merchants could use the Amazon service for Amazon sales, the eBay service for eBay sales, and their own choice for the rest.
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Degrade customer service?
This creates several problems, however.
Amazon and eBay’s services may not be the best in terms of customer satisfaction. The services may not be suitable for all products, customers, and destinations.
Amazon and eBay are effectively creating shipping monopolies. Amazon and eBay will choose preferred carriers based, presumably, on cost. The cheapest supplier could get the business. But this may result in lost or delayed parcels, degrading customer service.
By using Amazon and eBay’s preferred carriers, a merchant will have lower volumes for its own direct sales. Thus it may lose volume discounts. In the U.K., it could potentially drop below 2,000 annual parcels, eliminating the Royal Mail discounts.
I have always put my customers first. I have thus far resisted using Amazon and eBay’s carrier offerings. The potential loss in business from Amazon downgrading my listings is more than offset by customers coming back. But I will closely monitor.
The difficult decision will come when the busy holiday season approaches or bad weather starts affecting deliveries. Do I stick with my chosen supplier and take the feedback hit on Amazon and eBay when impossible-to-avoid delivery hiccups occur? Or do I switch to Amazon and eBay’s preferred carriers that are potentially worse but allow for the removal of negative feedback?
I hope to stick to my principles.