The Internet has been a boon and a bust for product manufacturers. On the one hand, it has never been easier for consumers to find and purchase a company’s products. On the other hand, for companies trying to sell through brick and mortar stores in addition to selling through online resellers, doing business has never been more complex. And one specific type of distribution challenge has unintended consequences that may be difficult for many companies to understand. One of those experiences happened to me today, here is that story.
I thought I broke the screen on my iPhone 11 when in actuality the screen protector saved it. I happily visited the manufacturer’s website, left a stellar 5-star review, and located the same product I had purchased before. It was priced at $9.99. I added it their website shopping card and proceeded to check out.
So, let’s analyze what just happened. In a very efficient amount of time, I located the manufacturer’s website, found the product, wrote a review and selected it for purchase. This was a frictionless customer experience so far. That is, until I saw that there was a $10.00 shipping charge.
Yes, the FedEx 2-day shipping I was forced into was for a product package that was 3-1/8″ wide x 6-3/8″ long x 1/8″ thick cost a penny more than the product that was located inside.
I had no problem paying some shipping costs. I also had no problem buying directly from the manufacturer’s website even though I knew that they would effectively be effectively ‘double-dipping’ making retail profit on top of their manufacturing profit. What I did have a problem with was paying $10 to ship something that could have fit inside a #10 envelope with a 55-cent stamp.
So I did what many others would do. I found the same product from the same manufacturer being offered for sale on Amazon with free priority shipping because of my Prime membership. This was a win-win for me as a consumer, but it was a lose-lose-lose for the manufacturer. First, they lost the extra retail profit available from selling direct to consumer. Second, they incurred whatever fees Amazon imposed for warehousing and shipping their product. Most importantly, they lost a bit of brand value in my eyes because of this silly exercise they forced me to undertake.
Manufacturers worry about how powerful online retailers like Amazon are becoming, but it is their own inattention to customer experience design that may be causing the underlying problem. Essentially, anyone who is not an Amazon Prime member or who doesn’t want to do business with Amazon is being forced by this manufacturer to pay a penalty which in this case equalled the price of the product itself. Considering the large amount of competing iPhone screen protectors out there, this manufacturer shouldn’t only worry about losing a bit of brand value, they should also worry about losing the sale outright by encouraging me to enter an environment where all of there competitors are only one click away.
One way to address this is to incorporate a more comprehensive view of a business when making decisions such as the price of shipping. Another is to approach these decisions from the viewpoint of the customer experience in relation to the brand. This is often difficult for companies to do because the individuals responsible for the decision may not have a 360° view of the business so they make decisions based on their personal and operational view. Such as making the financial decision to charge more than the product cost for shipping price even though you sell that same product through a different distributor for less profit—all while tarnishing your brand or losing the sale entirely.
The morale of the story: seemingly small business decisions can have an outsized effect on a company’s brand and revenue, therefore make decisions cautiously while thinking about the broader effect. And always be sure to view through the lens of your customer.
Author’s Note: After posting this article I had an email exchange with the manufacturing company’s CEO who ran me through the decision process of deciding upon one shipping vendor and focusing on what their company does for their main business (which isn’t screen protectors). Fair enough, companies sometimes make unpopular decisions for their greater good. If I were at the helm, I would still have figured out some way to not have shipping costs be more than the product price, but I still applaud the company for it’s great products and responsive team members. And in the end, that has way more effect on brand essence than shipping costs.