Why is flipkart charging for shipments.?? & Change in Flipkart Packaging.?

Madani

[ Edit: Recategorized ]

Hi,

Well, i am one of the guy who reads books so often that no sooner than the minute i reach the last page of a book i'm holding i order another book so that it reaches on time for me to start reading again.

Now, that i've told you about it, Flipkart. The best e-commerce store is now charging me Rs. 30 to ship any order in case the total order is lesser than 200.!

Wel, amongst the 230 odd books that i have purchased on flipkart, less than 5% of the books were of cost above 180..!! So, what i dont understand now is why is there a shipping cost?

Did the strategy to give away books at the cost lesser than manufacturing cost make some losses for flipkart.?? or did the strategy to throw away all other competitors pay off well for flipkart & now they are charging their customers.?

If you have any answers or assumptions please let me know. b'cuz i want to know if selling for a lower price was FLIPKART's marketing Gimmick.!!!

sinha

@madani - Great thread. Flipkart started off the race with 'we are the cheapest' and is (probably) now facing the heat because of that positioning (though the positioning of being cheap was never stated directly).

@naman - Flipkart not only sells costliest gadgets, but also costliest books (Steve Jobs biography costs 559 on Flipkart, and only 519 on Infibeam).

What madani is referring to is very simple - how do you keep early adopters' happy and ensuring that somebody who has bought 230 books continues to buy from Flipkart only? Or maybe Flipkart's initial customers (the old timers) are turning into a liability (with same old expectations)?

I once wrote an article around this whole confusion:When is the right time to let go of your first customer?

naman

Shipping a Rs.100-200 item for free was never feasible. But I guess the law of avgs. evened out the cost for them as they made some money on higher value items and the lower value item worked as "trial pack" or user acquisition mechanism.

It is marketing but not a gimmick. Instead of coupon codes and pseudo discounts, FK worked on what really mattered.

I have seen FK packing last week for a book and another for a phone, I dont think it is shabby by any standards. Infact the way it was packed seems to be taking extra care. Bubble wrap etc. is a standard for any ecommerce shipping. One reason for your experience could be a different warehouse .

Now that they have all the money that they want to raise, they don't need to impress any investor but have to build a real profit making business. That will happen only by making profit on every transaction that they do.

Infact not many would have noticed that FK actually sells one of the costliest gadgets. Most mobiles are about 4-10% costlier on FK as compared to the cheapest offer online. I believe they have proved that selling cheap and undercutting the competitor isn't the only way to acquire customers in ecommerce. Nobody is happy doing that but some foolish investors have taken superficial view to numbers like transactions and gross revenue as a key measurable metrics and invested in startups, hence everyone else is taking that as the easiest route to impress investors.

Jimish

Interesting thread. I had observed low prices (relative to other websites) on Personal & Health Care, Kitchen & Appliances categories, when the categories were first launched... The moment, the category got some traction, i guess, their prices were raised... Seems this strategy of theirs works well for them, since they have a loyal customer base....

I would not be surprised, if Flipkart comes up with Prime membership or something along the lines of what Amazon has to waive off the shipping charges for regular members... Seems like the next logical move for them after adding the shipping charges :)

I am infact surprised that no one has done something like that yet... IMO, For books, its the best thing to retain early adaptors... They feel happy that they dont pay shipping charges like others do and get the lowest price (even if its not the lowest compared to other websites)... Understanding the psychology of buyers is such an interesting subject, isnt it? :)

theswamy

IMO the eCommerce industry has done a terrible job of spoiling customers - and its good that Flipkart is taking the first step of straightening things out for themselves, as well as the industry.

The benefit of eCommerce to consumers isn't lowest price - its lowest COST of obtaining the goods and that includes personal time, transportation, parking, multiple trips to the store that didn't have the goods, etc.

For a short period of time, yes, people will jump from Flipkart - but in the long run if everyone does charge for shipping things will even out...

Sagar

I wouldn't call it a gimmick really. Initially the shipping was free for orders more than Rs 100 and now it is Rs 200. I think it was an expected step. What I find worth appreciating is that they have done this after demonstrating sufficiently that they have a really wide range of products, solid delivery times and no-frills no-nonsense support. They would have no doubt taken a beating on profits initially so now seems like a good time to start recovering those.

Madani

@ Sagar,

Alright. Lets take it for granted that Flipkart was bound to do the increase in shipping order price. But, guess what? Their packaging has become Shabby.! I used to receive my books covered with recycled paper boxes with flipkart written all over. today, i've received my books in a dirty looking pale yellow cover with plastic sponge stuck inside it. !

None-the-less, no more books from flipkart from now onwards.!

Sagar

@Madani - That's sad! Although I would suggest you reach out to them and let them know of your not so good experience. They do respond and take note of customer issues - this I can tell you from personal experience.

saipothuri

Well.. Its like they have to take care of packaging system too. as they are focusing on many products and ship them in time to customers is not a easy issue also.. But Hope flipkart can standardize the quality measures

sameerparwani

Free shipping above Rs. 200 is still a very low price point. For comparison, Amazon.com free shipping is only above $25 in comparison and they didn't introduce that until many years into their existence.

ash4cam

Somebody mentioned about the first step in pricing arrangement's, its not that.

I know that a Major brand had stopped flipkart's billing for 1.5 months because they were selling cheaper.

Its not only the profit thing, but also the companies of branded products who are setting the terms for online sellers.

One of the official of a big electronics brand i spoke to, told me that still 95% of their sales are coming from Offline channels and only 5% from online and they can't let go their 95% volume customers for the 5% . they have simple funda for this, if you want a customer to buy from you, attract him on the basis of your service and not price.

There was a time, when Fk was selling every thing at Min. 2% loss but that's gonna change now. For some companies, they are doing it for years, but for some companies they are implementing it now..

Madani

I thank all of you for your time on this thread.!

Now am getting to understand how clever one should be in an ecommerce start-up to stabilize the company.

Well my next book shall arrive in the next 2 or 3 days, but if the packaging turns out to be bad then i'd better change my eCommerce store.! Lets just wait and watch for their next move.!

gowthamanb

@Madani

sometimes someone else ships instead of flipkart, long back i ordered a book, which was send from some press in hyd in exact same packing as you described, not sure if that was the case with you

harshamv

@Madani you bought 230 books. Damn you read a lot :P

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