Trade Me targets ‘shipping shock’
Trade Me wants to reduce ‘‘shipping shock’’ for shoppers by encouraging retailers to send items for free.
‘‘Shipping shock’’ is what some customers experience when they reach the online checkout and realise the shipping costs are more than first thought.
From March 13, retailers trading through the auction website will be charged higher fees for selling an item if they do not offer free shipping.
First Retail Group managing director Chris Wilkinson said this move was a bid to stay relevant, and retain customers, as the threat of Amazon looms.
‘‘They, like eBay in Australia, are rolling out initiatives to remain relevant and in consumers’ consideration set.’’
Trade Me announced on Monday that it would start taking success fees from the item sale price and the shipping cost for retailers using the site.
However, if retailers provided ‘‘free and fast shipping’’ to buyers, they would be entitled to a 10 per cent rebate on the success fees.
Trade Me head of marketplace Rick Davies said the move was to encourage more of its 19,000 retailers, also known as ‘‘in-trade’’ sellers, to provide shoppers with free shipping and transparent prices. The change would also help ‘‘deter ‘shipping shock’ at checkout’’, he said.
‘‘We see some opportunistic sellers reducing their item prices, then loading up the shipping fees which freaks buyers out when they come to pay.
‘‘We want our marketplace to be easy and transparent for buyers and we also expect sellers to sell more when buyers know what they’re paying upfront.’’
The changes come into effect on March 14. The change does not affect casual sellers.
‘‘Buyers have told us high shipping costs are their number one annoyance when buying on Trade Me, especially when purchasing a new item,’’ Davies said.
‘‘The expectations of Kiwis shopping online have soared in the past few years and we don’t want our professional retailers lagging behind.’’
Wilkinson said shipping costs were ‘‘without a doubt’’ the biggest barriers to completing sales.
‘‘So Trade Me’s encouragement will go some way to helping shoppers spend more with local businesses,’’ he said.
‘‘[However], the greatest challenge will be for retailers in absorbing shipping costs within, in many cases, already tight margins.’’
Overseas retailers often had more efficient distribution systems than New Zealand businesses for their online stores. They also had more competitive freight choices, he said.
It was likely Trade Me’s ‘‘most savvy traders’’ would be planning to have a strong presence on Amazon, Wilkinson said.