Posted by Jeremy Bodenhamer

The Amazon Syndrome

In 2005 a little company named Amazon launched a service called Prime and the world was forever changed. Today, the Prime subscription base has been reported to be as high as 50 million members.

Amazon Prime is a subscription service where Amazon members pay an annual fee to receive benefits such as free two-day shipping for Prime eligible items. After Amazon launched Prime they didn’t just improve Amazon service offerings to their customers; they changed the expectations of customers around the world.

For example, there is a remote area of China—Lhasa, Tibet—that relies entirely on Alibaba for raisins. Alibaba's raisin sellers learned a difficult lesson when the country’s infrastructure couldn’t handle fast delivery to this hard-to-reach community. When raisins didn’t arrive in two days, buyers took to the review boards and lit up a firestorm of negative feedback.

In today’s world, when customers make a purchase online they enter each transaction with a set of expectations and a set of tolerable circumstances.

Online Buyer Expectations—aka “The Amazon Syndrome”

  1. Shipping should be free — I don’t have to pay for shipping when I make purchases in a store, so why should I pay for shipping when I purchase online?
  2. Delivery should be instant — Isn’t there someone with a truck just sitting around the corner waiting for me to click Buy so I can have my purchase now?! Come on, a freshly baked pizza only takes 30 minutes.

Circumstances Online Buyers Will Tolerate

  1. A Fair Shipping Price — Most of the time, fairness is tied to the price of the item and not to a more realistic anchor like the item size, location, or value of the purchase.
  2. Delivery within the Communicated Timeframe—Longer timeframes are tolerable as long as I don’t have to pick up the phone and call for an update. It is the seller's responsibility to keep me updated.
  3. Without Damage—This is damage to my pride or my purchase. The driver better be respectful and the box better not have giant holes through it.

The advent of eCommerce has made everything in the world sellable. But not everything is accessible and, frankly, the customer doesn’t care. When they click the magic Buy button their expectations are set. To avoid confusion and keep customers happy we recommend the following best practices:

E-commerce Sellers’ Best Practices

  1. Provide instant shipping prices at the point of sale—Don’t wait until a customer has made it to the last page of the checkout process to surprise them with the cost of shipping, or worse, a message that reads, “Call for shipping quote.”
  2. Fair Shipping Prices—Test subsidies to find a shipping pricing process that works for your customers. This process may include free shipping, flat rate shipping, a partial subsidy, or full price shipping.  The answer depends on the items sold, the cost of the item, and the customer base.
  3. Transparent Timetables—Make delivery timeframes highly visible, even if they are long.
  4. Be over-communicative while the shipment is in transit.
  5. Pack Sufficiently—Invest in high quality packing materials to ensure your items arrive in good condition.

Real people feed their families by moving goods around the world, which requires expensive fuel to feed their trucks. Shipping costs money. This is a fact that will never change. The price you spend on shipping will never look as good as the fancy, new pair of boots you get to wear around town. But shipping is vital to the success of your business and to the happiness of your customers. Make sure to invest wisely in your shipping solution. It will pay off.