Some advice please - from Americans in particular!

[Nick Fiddes]

We've been considering making a significant change to our charging model (but only an idea!). And I'd be really grateful if anyone could give their gut feeling response... In fact, it would be especially if you were able to give TWO responses: (1) your own; and (2) how you think most ordinary American web users would respond.

The background to this is that as some of you will know, we get quite a lot of flak from customers in the US and Canada who resent paying import duties and/or shipping charges. (And PLEASE let's not rehearse all the old Fedex/DHL arguments again here... pretty please!). And neither we nor they much like airmail either, untracked, with a delivery schedule that can take weeks.

Added to this is the fact that Americans are, by and large, not very used to dealing with overseas businesses. So there's often a bit of a fear factor to overcome too.

We've considered setting up a US distribution hub, to address this. But the logistics just don't add up. So we're now considering another approach.

This would be to change our pricing model for our customers in the USA and Canada, to INCLUDE both rapid courier shipping, and all import duties. We'd also offer firm prices in US dollars, so that the price you saw was the price you'd pay, in your local currency, with 1-2 day delivery (from stock) to pretty much anywhere in North America.

Obviously this would mean putting our prices up to compensate, but only by the additional costs, and on average these prices would be much the same as UK pricing including our own VAT and delivery. And by and large our pricing is pretty low, so I think an increase of maybe 20% would still leave us quite competitive with local US based retailers, even on headline pricing.

We would, however, have to remove the option of slow airmail, with a good chance on escaping the import duties altogether. This option would in fact still be available to American customers by choosing to view our site in UK pounds and doing your own arithmetic... and we'd make sure that more informed users like the XMTS community knew to do this if they wished to...

My own gut feeling is that a lot of Americans would be much more comfortable with a pitch that guaranteed NO additional charges, and FAST 1-2 delivery, and that by taking away a lot of the fear factor with overseas shopping we might more than compensate for those customers we lost from higher headline prices.

But I'm only guessing! What do you guys think? Again, please if you can give me your take on how you think Mr or Mrs Middle America would respond, as well as your own view. (And again, it would be great if we could refrain from letting this degenerate into another rehash of the old arguments about shippers and customs policies etc.!!)

Thanks!

Nick

[davedove]

Nick,

My own preference would be to know the total costs up front. Although I know that there will be customs charges when done through Fedex, etc., it is frustrating not knowing just what that charge will be. By including it in your total price, it would make budgeting much easier and there would not be the hassle of making the second payment for the customs charges - one payment and you're done.

[Geoff Withnell]

I would tend to agree that most Americans would prefer the cut and dried, "here is the price, with quick delivery and customs included" than have the uncertainty. If you go this route, make very sure that this is VERY clear, or some of my less savvy countrymen will believe that the uncertainty is still there, and will just see the price increase.

Geoff Withnell

[seanachie]

Nick:
I appreciate changing the service would incur cost to you, but 20% is a pretty significant bite even as it reflects your cost. On a Balmoral Kilt alone that's $53. I would certainly wait 5-7 business days (or whatever is on offer) and save a few dollars over the rapid 1-2 days service, although having the rapid service for someone in the event of an urgent need would be nice. That's my personal take.

Hmmh,,,,how would Americans in general take this? I can not offer a fair measure we are a diverse lot and I would expect that you would be hard pressed to gain consensus.

[bdkilted]

I agree with the above gentlemen. IF it is very clear that no additional charges will be made, then I and most others would be more likely to view your shop as a option, instead of only dealing with merchants in this country.

[artificer]

Doesn't the Royal Airmail (Parcelforce) offer tracking and insurance? I'm fairly certain it does.

My son is a big fan of British steam engines (rail), and I ended up ordering a fair number of cars and engines from the UK (Dapol and Graham Farish). I think a good number of them arrived with tracked and insured delivery via Royal Mail.

I personally think 'Royal Mail Small Packets' is one of the best delivery deals out there.

Last time I ordered a kilt from the UK it cost ~17GBP to deliver, avoided customs, and was from Scotland to me in six days.


My primary concern with your scheme is this:

For you to safely 'fix' a US price you are going to have to allow for fairly significant 'buffer' due to the variance in exchange rates (we're 1.53/1 today, down from ***.63/1 recent months).

This would mean artificially padding your price to help preserve your margins when the dollar is weaker, making the price worse for Americans much of the time when the balance is equal or shifts the other way.

I tend to buy in GBP when it benefits me (most of the time) versus sites that offer a fixed rate against the dollar (which, from recent searches, can be fixed as high as 2/1).


That said, I don't know how much I fit your "middle America" profile. I do live in the middle third of the country, but spent a good number of years dealing with international inter-modal freight and have been buying online for almost two decades- so no fear of ordering from overseas here.

So to answer your two questions;
1) I would not find it a particularly good value

2) I think for 'Average Joe' you will benefit some degree from the 'safety factor' of having all customs and shipping included- but you are still an overseas firm, and those who are reluctant to order will still be so.

You might lose a little business from those who ARE comfortable ordering internationally and are perhaps a little more savvy dealing with multiple currencies and delivery options (at least when the exchange rates shift to sour the deal).

Just my $.02 (.013GBP)
ith:

[Nick Fiddes]

Thanks all for the views so far... this is seriously helpful.

Just a quick response on the exchange rates. I don't think we'd have any buffer at all. We'd accept an element of swings and roundabouts on our margin, and then adjust pricing now and again. In the end, the prices would work out much the same as now, since the credit card companies rates change constantly too.

And as I said, as an educated buyer, you could still do it the other way by shopping at our UK pricing and getting economy shipping.

As for air mail tracking, I'd have to double check the facts (I'm not in the office). But it's certainly nowhere near as robust. And to Canada in particular it's atrociously unreliable so we barely use it there any more.

[TwoTone]

I consider myself an average American and I would be more inclined to order something from the UK if the price were listed in dollars rather than pounds. I would not like to be surprised with extra charges, so knowing the actual total is important.

The delivery time is not so much of a factor for me. I expect it to take some time to get a package from overseas.

In some cases I would be willing to pay slightly more for an item that was made in Scotland if I could say that it came to me directly from Scotland and not from an American importer.

[Nighthawk]

I would tend to agree that most Americans would prefer the cut and dried, "here is the price, with quick delivery and customs included" than have the uncertainty. If you go this route, make very sure that this is VERY clear, or some of my less savvy countrymen will believe that the uncertainty is still there, and will just see the price increase.

Geoff Withnell

This is my reaction, as well. As a society, we've become used to being spoon fed information and not having to really think too hard into what we see, so it would have be very, very clear on the website exactly why the price hike occurred, where the extra money is going, and that there will be no additional shipping/customs fees once the quoted price is paid. And to be honest, I have often thought that if I were to get my own business up and running, I would not charge a sales tax! I would just include it in the price of my goods. That way, when you see a cell phone case for $37.83, you won't have to guess what the markup with tax will be! $37.83 is exactly what you'll pay at checkout! So personally, I really like this idea of yours, Nick.

[kiltedRTR]

I like it. The way I understand it, Americans would have two choices, they can either go with the simple price up front and 1-2 day delivery, or can do it the way you've always done it which is good for people experienced with over seas companies. I think this would make customers on this side of the pond feel more comfortable in buying from you.