We recently got asked a question about tiered shipping rates by one of our clients in the US:

We need to set up an online store that sells a single product (a book). They are $19.95 each, or $14.95 each if you purchase 5 or more.
An additional Shipping & Handling charge of $4.95 for the 1st book and an additional $1.00 for each subsequent book will be applied.
We also need to charge sales tax for Colorado residents only.

One way you could approach this using WP e-Commerce is as follows.

1. Tiered Product Pricing

In our example we have:
1-4 books: $19.95 each
5+ books: $14.95 each

WP e-Commerce supports this tiered/table product pricing model. This is implemented via Dashboard -> Products -> Products -> Edit.

You enter the base price (in this case $19.95) in the price field.

Further down the page there is a table rate price section. This is where define a price of $14.95 each for 5 or more products.

2. Variable Shipping and Handling Rates

Although WP e-Commerce can’t directly support the tiered shipping rates, It does have a “table rate” shipping method.

Following our example we could define something like:

To set this up in WP e-Commerce, go to Dashboard -> Products -> Settings -> Shipping -> Table Rate -> Edit.

Set up the layers as per the screenshot to the right.

Note: You may wish to add more layers to cater for situations where people order more than 6 books.

This setup almost satisfies our shipping rules, apart from the 4 book scenario where the customer would be charged $8.95 for shipping instead of $7.95. In our case this was an acceptable trade-off.

3. US state-based Tax

WP e-Commerce also supports charging different sales tax amounts for different US states.

We set this up via Dashboard -> Products -> Settings (see screenshot to the right).

Once configured, the online store works as follows:

The customer adds product(s) to their cart, then once they go to the checkout they choose their destination country/state. If they choose Colorado, 10% sales tax is added to the order total. This effectively means that the prices on the website don’t include tax, and tax is added during checkout where appropriate.

So there you have it!

More information: OM4 eCommerce

Tiered pricing and shipping set up with WP e-Commerce

Recently we had the pleasure of working with Hilary Colero of Rockpool Kikoy to launch a new website for her range of Rockpool Kikoy Sarongs.

Sarongs Online: sarong.net.au

We implemented this site using the WP e-Commerce plugin for WordPress – James put quite a bit of work in to making sure it worked correctly for our WordPress and WordPress MU installations. So we now support two separate eCommerce plugins – QuickShop and WP e-Commerce.

In addition, James developed a new interface to the Australia Post shipping calculator so that during checkout customers are presented with actual shipping costs. The costs are calculated from a base postcode in Australia to any other postcode in Australia, or for international customers, to any country that Australia Post ships to.

Getting these costs requires the weight as well as the dimensions of the product, and Australia Post charges you for either the weight or the volumetric weight, whichever is greater.

The extensions have been contributed to the WP e-Commerce development team, so they should make their way into the core plugin soon.

Sarongs Online and our new WP e-Commerce Australia Post integration

For some time now we’ve been finding our accounting system (MYOB) just isn’t keeping up. Our business is online, and MYOB isn’t.

So we are making the move to Saasu (that is our affiliate link).

There were some big reasons for moving.

Like a lot of businesses we don’t just operate out of one office – our book keeper and accountant both need access to our accounting system. Saasu is online, and it is very easy for us operate in our mixed environment. We can raise invoices and record purchases ourselves when and where we need to, and book keeping / accounting access is taken care of as well. We’ve already streamlined our record keeping using GetDropBox to make sure we can all access electronic copies of important documents.

Saasu has a comprehensive application programming interface (API). Once we have the accounting bedded down we will update our website to process sales online, collecting payments, creating / updating customer records and issuing invoices/receipts directly to Saasu. No more double entry.

Saasu have also enabled multi-currency support. As we transact in multiple currencies, this is also a big one. To process multi-currency payments online and orchestrate ‘straight through’ payments (one off and recurring), customer records and invoicing (add inventory if products are involved, not just services) has more than a few moving parts – banks, merchant accounts, payment gateways and of course the accounting system. Without an accounting system like Saasu this was out of reach for companies like us. But not now.

Those factors were the big ones. But now I’m starting to explore more of the detailed Saasu functions I’m struck by how well the software has been put together. It is easy to understand, and that makes it easy to use. And it has the right level of help – short, sharp and to the point, and they are in tune with how our business works – an example is this help note on using Saasu with PayPal – right on the money. Impressive.

We’re going to look carefully at the Inventory module. For an SME who sells products online, there would be a lot of value in having a shopping cart that integrates directly with Saasu for sales and inventory.

When you are running a business online you can’t ignore the back office requirements. Saasu has raised the bar for SME accounting systems, and I’m very pleased that OM4 is joining them as a customer as well as referral partner* and development partner. [*Note: I've recently decided to stop participating in all referral programmes for 3rd party products that I use - nothing wrong with them overall, but I figure this way it will be clearer that the only reason I mention a product is because I think it is worth calling out.]

Planet Saasu

If you sell physical products online then you’ve probably grappled with the issue of shipping costs.

I’m an advocate of free shipping. Or more correctly, shipping included.

By that I really mean the vendor needs to sort out the complexity of shipping costs and include them in the product cost to make it easy for the buyer.

Free shipping isn’t really free, it just means that shipping has been included in the base pricing. Just like other components of cost have been included, like customer service, returns and warranty.

Evidence? Ok, I wish I had some hard evidence to back up my theory. It isn’t that easy to test the impact of alternative shipping policies. When you are launching a product online, you set the price and after that price variations need to obey the laws of the market – you can’t just change them as easily as you might change the wording or images that present your product.

You can probably see the immediate disadvantage of including shipping in your standard prices – your prices need to be higher than they would otherwise be. I’m not trying to pretend this isn’t an issue. But it might just be *less* of an issue than the alternatives.

And you can do things to counteract this. For example, sell small items in minimum quantities, or set a minimum order value.

But why is free shipping so important?

Firstly, selling a product online works better when it is simple. Easy to say, hard to do. And shipping fees get complicated real quick. When things get too complicated, some of your potential customers leave.

Sure it might be complex for you, the business owner, to figure out how to sort out the complexities of including shipping in your standard pricing. But better you sweat over it once than every one of your customers sweats over it every time they think about buying (or get close to buying). If you look at it that way, your pain doesn’t count. Sorry.

Secondly, every time you introduce someone to the cost of doing business with you, you invite them to make a choice to leave.

“Look at these widgets … beautiful red ones, just what I’ve been looking for … wonder how much they are?”
$10
“$10? Hmm, are these red widgets worth it? Maybe I’ll go have a look elsewhere …”

Every time you introduce a new cost, you create the circumstances in which a customer is likely to consider their choice.

Lets try that again with shipping costs.

“Look at these widgets … beautiful green ones, just what I’ve been looking for … wonder how much they are?”
$10
“$10? Hmm, are these green widgets worth it? Well, they are real shiny, and I can get them right here. Sure, I’ll buy them. …”

(a short time later)

“Ok, looking good, just got to complete this boring checkout. Wait, what’s this! (Sirens, searchlights activate). OMG, I’ve got to pay shipping costs! How much will that set me back?
$2
“$2? Ouch, more costs, they’re already hitting me up for $10. Hmm, are these green widgets worth it? Maybe I’ll go have a look elsewhere …”

You get the idea.

The first time you introduce the price, you better have established enough value or your prospective customer might leave.

Each time you add another cost, you ask them to roll the ‘make a decision to stay or go’ wheel once more. I don’t think it even really matters how much more money is involved. Any additional amount is just that – more money! As soon as you introduce an additional price element, you run the risk of the prospect leaving.

Instead, present your product, let your prospective customer understand the benefits so they can see its value, and then let them know the cost. Once. If they like it, let them buy. Don’t trickle feed uncomfortable bits of information to them in the lead up to them buying. Just focus on removing any remaining barriers to the sale.

So there you have my rationale for including shipping in your product price. If you need to, perhaps include domestic shipping in the price and have a one off fee to add on for international shipping. Anywhere.

When you sell enough in to a new country for this to be a problem, hey, you’ll have a great problem to solve. But it will fun to solve that sort of problem, a lot more fun than staring a a low conversion rate and wondering what to do next.

Launch your product without including shipping prices and maybe one day you’ll find yourself wanting to compete with the compelling power of sites that offer the magic of free shipping. How do they do it?

Ok, so I mentioned I don’t have any evidence for this theory, but at the very least you can read what others have to say on this topic.

From a PayPal survey on the topic of Why Online Shoppers Abandon Purchases:

A PayPal (NASDAQ:EBAY) survey released today revealed that nearly half (45 percent) of online shoppers have abandoned their carts multiple times in the past three weeks due to high shipping costs, security concerns and lack of convenience. High shipping costs was cited as the largest single reason for cart abandonment.

Surprise, surprise, about 12 months earlier an eMarketer article Shopping Cart Abandonment Rises quoted:

Online shoppers surveyed by PayPal and comScore were also concerned about costs. High shipping fees were the main reason for online shopping carts to be abandoned by survey respondents. The companies estimated that two-thirds of consumers who put items into shopping carts did not end up buying the items.

Commenting on that eMarketer article and other sources Linda Bustos notes:

… e-Tailing Group’s research in late 2006 reported … 84% cited free shipping as “very to most influential” when buying gifts online. It could very well be a dealbreaker between buying from you or a competitor.

An old school article on Understanding the Causes of Shopping Cart Abandonment says that:

… according to Forrester Research, the top reasons sited for cart abandonment are as follows: [1st] 57% – Didn’t want to pay shipping costs
… How can you as a merchant prevent these reasons from getting in the way of a sale? Here are a few suggestions: Offer and advertise free or discounted shipping: Although this is perhaps easier said than done, it really is a great closing tool.”

I like this article because of the insight into what is important to online retailers – you guessed it, free shipping happens to be on their mind:

The debate about whether free shipping is a short course to ruin, or an important driver of sales, rages on. .. over three-quarters (78%) of retailers surveyed for Shop.org’s annual pre-holiday eHoliday report plan to plow ahead with popular free shipping promotions, although many will offer the service with conditions attached such as a minimum order value or product-based promotions.

And finally, because I find it consistently one of the most useful sources of information on conversion rate optimization, I’ll quote Khalid on free shipping:

.. you can claim your chunk of the growing numbers [ordering online] by offering free shipping and competing with other retailers who use it as the ultimate shopping lure.” (my emphasis)

So there you have it, my 10c worth on the topic of shipping. If you are planning on launching a new product, have a think about whether including shipping fees in your pricing might work.

Reducing Shopping Cart Abandonment Rates through Free Shipping

We’ve been building up our eCommerce capabilities for a while now, and have published new articles on how you can use them in your OM4 website.

Sidebar Shopping Cart

All OM4 websites now include PayPal based eCommerce support as a standard feature. You can manage online payments using:

• Add to Cart buttons with a shopping cart
• Recurring Subscriptions
• Donations

The shopping cart builds on the excellent work started by ZackDesign.

Here are some examples of the shopping cart in use:

• Moombaki sells wine online: Moombaki Online Cellar
• Sarah Wiin accepts payments for courses: Feldenkrais Perth
• Ningaloo Holiday Homes accept deposits and booking payments online: Ningaloo Holiday Homes
• Riverfly sells alluring flies (for Trout anyway) and books: Riverfly Online Shop

There are new articles covering initial setup, and then use of the Shopping Cart/Add to Cart options, Subscriptions and Donations.

New eCommerce Facilities