Groupon says its focus is on the bottom line, rather than top-line growth.
Conversion rate went up immediately when SortingWithStyle.com reduced shipping charges.
Shoppers who abandoned their carts at SortingWithStyle.com usually did it after seeing the shipping charges. So Sayeh Pezeshki, CEO of the online office supplies retailer, lowered the fees—and immediately more shoppers began completing their purchases.
“I’ve been taking notes from Amazon and all their free shipping,” Pezeshki says. “We can’t do free shipping, but we can certainly reduce it, and we’ve seen a great increase.”
The e-retailer reduced its shipping charges in early December to two flat-rate fees. The site charges $2.95 for shipping via the U.S. Postal Service for items up to a pound—a good portion of the orders for SortingWithStyle.com, which sells such lightweight products as sticky notes and labels. Other orders ship via FedEx for $4.95.
Previously, Pezeshki says, a consumer might be faced with a FedEx shipping charge of as much as $11 or $12. Moving to the flat rate charges in early December increased the sites conversion rate by three-tenths of a percent. While Pezeshki would not disclose the site’s conversion rate, she says the increase was significant.
She also made sure to let shoppers know about the lower rate. The home page of SortingWithStyle.com features a sizable box that declares: Flat Rate Shipping on all orders only $4.95! The box notes that the flat rate does not apply to orders shipped to Alaska, Hawaii and Canada.
Pezeshki says she builds the shipping cost into her pricing. She says the $2.95 fee roughly covers the cost of shipping small orders via the U.S. Postal Service. The $4.95 does not cover her FedEx shipping costs, but those larger orders typically provide higher margins. “If it’s a big order,” she says, “it’s OK for us to absorb some of the shipping costs.”
SortingWithStyle Inc. is No. 827 in the Internet Retailer Second 500 Guide.