People hate shipping fees. They rank up there with getting a root canal. A customer will choose a store that claims to have “free shipping”. But is it really free?
Not really. The shipping fees are embedded into the products. That way, the checkout can show “$0 shipping”. The customer is still paying for shipping and in some cases, far more than what they would pay if shipping was calculated at checkout.
So how do you embed shipping costs? These are some of the more common strategies out there.
Some suppliers provide Shipping & Handling costs for each product. This is the simplest case, you can simply add this to your store price.
Other suppliers will provide a weight-based formula that you can apply to each item. This allows you to embed the cost by running a calculation for each product.
In some cases a supplier will provide rates for dimensional weight. They will also provide the length, width, and height of each product in their data feed. You can use this, along with the dimensional factor, to calculate the shipping. i.e. (length × width × height) / (dimensional factor).
Then there is good old algebra. Perhaps the supplier has really weird, non-standard shipping rules. In these cases we can use the supplier’s shipping chart and create a formula that approximates the rate for each product. i.e. store price = weight * factor + minimum shipping fee. It is a ‘best fit’ calculation where the input is the product weight and the output is the approximated shipping rate. This type of system requires a bit of give and take. Some orders will have shipping calculated a bit too low, others too high. The average will settle to a profitable range.
One of the common problems in running an e-commerce store is the oversell. It happens when a customer buys something which is not in stock. All web stores and marketplaces track inventory but it is only as good as the data that the merchant provides. If a web store believes that there are 1000 Purple Plastic Cupcakes in stock but the merchant sold the last one an hour ago, any further sales will be oversells. The store will continue to oversell and promise customers prompt delivery even though this is clearly not possible.
The consequence is a lost sale. The merchant tells the client that the item can not be delivered as was originally promised. The customer goes elsewhere to buy his fake pastries. Perhaps they get frustrated with the experience and continue to buy goods from a competitor.
Sometimes this isn’t the only penalty. Some drop-shippers will penalize the merchant’s account when an oversell occurs. Most marketplaces also track this kind of problem and will score it against the merchant’s record. It works against the merchant’s long term reputation.
A simple solution to this problem is to ensure proper synchronization between the merchant’s store and the supplier. For a simple store with a few products this isn’t really necessary. But for larger stores where there are hundreds of products and frequent changes to stock, it is critical.
Our system processes thousands of products per day from a wide variety of suppliers. This ensures that our clients have fresh inventory numbers and avoid the dreaded oversell.
If an online product falls in the forest…
One of the most overlooked problems in e-commerce is what we call “Abandoned” products. These are products which at one time existed in a supplier’s data feed. Imagine a kitchen furniture supplier who has a Butcher Block Family Table product. It sold very well for a number of months but then it was removed. However, any merchant who uses the data feed has already placed this product on their store. How can a merchant tell if he has products in his store which can no longer be fulfilled?
Some drop-shippers provide a separate data feed of retired products. This can be used to weed out any abandoned products in the store. However, it is quite rare to find this in a supply feed. Even with that information it is still only relevant to merchants who actually listed those products.
Abandoned products are part of a broader service that we call Catalog Synchronization. The product catalog is comprised of all the possible supply data merged with the store’s product set. New products can be added dynamically, changed product data is updated, identical products are left alone, and abandoned products are hidden or removed based on the merchant’s policy.
Catalog Synchronization goes hand-in-hand with inventory synchronization. Both processes are critical to running an efficient e-commerce store.