Shipping Pricing Changes - A New Strategy?

In response to the second increase in courier rates in 2025, we thought there must be alternatives to keep our products and shipping costs affordable. Firstly, keeping courier costs as low as possible is crucial for the profitability of any e-commerce business. Secondly, we try to limit the amount of increases to shipping costs to make shopping with us easy and reliable. As online shoppers ourselves, we certainly prefer it when the checking out process is simple and that there are no eye-watering courier costs at the end of our shopping experience.

In the past, we’ve been transparent as to why we’ve had to raise shipping costs. Why? We think it builds trust with your regular customers. That’s why we’ll continue to discuss courier costs and their impact on small businesses like Wild Blue Dolls.

So how can we keep our courier costs down when faced with price increases every six months? Let's work through our options.

Possible Strategies

There are several strategies we could implement:

• Review and Analyse Shipping Data: We regularly review our shipping invoices and data to identify trends and areas where we might be overspending. This data-driven approach helps to refine our strategy. A good example of this was the need to charge for delivery to rural addresses that was implemented late last year. Extra analysis would be needed to determine differences between fulfilment of orders from Trade Me versus our website.

• Negotiate with Courier Companies: As shipping volume increases, we would gain leverage to negotiate better rates with courier companies and compare offers from different providers. Unfortunately, this isn’t an option for us right now. With the cost of living crisis, it is unsurprising that the number of packages we send out has reduced in 2025. We will re-visit this option in the next 24 months.

• Optimise Packaging: Our New Zealand parcels are primarily based on size and location (e.g. metro and rural). This means we need to pack efficiently with the best size poly mailer or box. Our Aussie parcels are based on a combination of weight, size and location making it challenging to have an inexpensive flat rate. This means we need to pack using lightweight materials and with the best size poly mailer.

• Consolidate Shipments: This is something we already do occasionally. If a customer has purchased on Trade Me and on our website within days of each other, wherever possible we combine their purchases into a single shipment. This is discussed with me before placing orders on both platforms.

• Offer Local Delivery: We could provide a local delivery option for customers who live in the same city/area. This would completely eliminate courier costs for those orders. We may need to consider a nominal delivery fee depending on distance to cover fuel used, time taken etc.

• Pass on a Portion of Costs: While striving to keep shipping costs low for customers, it's sometimes necessary to pass on a small portion of the actual courier costs across all items. This model works best if customers purchase more than one item at a time. A number of large Australasian companies use this model (like K-mart and The Warehouse). There could be a risk of making a loss if a customer only orders one item, because the contribution to the shipping cost would only be a small portion of the actual cost of the courier label (depending on the type of product purchased). Analysis would be required to discover the average number of items per order to determine what the risk of that happening would be. If the risk was low, this could be a good strategy.

• Implement Minimum Order Values for Free Shipping: If we offered free shipping with a minimum order value, the increased sales volume could offset or even cover the shipping costs. This model works best if customers purchase more than one item at a time. Again, a number of Australasian companies small and large have this model. The same risk of a loss exists if a customer only orders one item. Analysis would be required to discover the average spend per order to determine what the risk of that happening would be. If the risk was low, this could be a good strategy. There may need to be different minimum order values for the different countries. Additional analysis of average spend by country will help to ascertain what the minimum spend threshold(s) should be.

By implementing these strategies, as an e-commerce business we could significantly reduce the impact of courier expenses. This would lead to a more competitive offering for our customers, which is good for business overall.

The Way Forward

After doing our research on our Shipping Data, Average Spend per Order, Average Number of Items per Order by country and platform, we’ve made some decisions about how we can keep shipping more affordable for our customers. So what’s next?

We will be:

• Optimising Packaging - to reduce weight in our overseas orders we have removed header & backing cards from our products. Any promotional materials will be smaller and/or of lighter cardstock. However, all delicate items ordered will continue to receive the same protective bubble-wrap packaging.

• Passing on a Portion of Costs - we’ve increased prices across our items to contribute to the courier costs. The amount each item has increased varies by price point. For example, stickers and shoes are generally the least expensive items available, and the shipping cost added is less on those products than on larger items such as outfits. This is a moderate risk level because customers that order stickers tend to order only one item. Whereas customers that purchase outfits tend to order more than one. We’ll continue to monitor whether this model works for those affordable items.

• Implementing Minimum Order Values for Free Shipping - we’ve implemented free shipping for New Zealand with orders over $60, and for Australia with orders over $80 for our website orders. This would appear to be a low risk as customers tend to order more than one item, even if that item was a premium product e.g. a doll, or a @BarbieStyle fashion pack. We’ll continue to monitor whether this model works and if the threshold needs to be modified in the future. Unfortunately, this offer will not be available for our Trade Me customers because the overall value of orders there are less than $60.00.

• Understanding the Differences between Trade Me and our Website - our auction-based customers tend to order less items together, so the risk of making a loss on the shipping is higher. So our approach needs to change:

• Reconsider which items should be listed over there, so the risk of inexpensive one item purchases would be less likely to happen.

• Or we could increase the amount of the inexpensive products to cover more of the courier cost, to reduce the loss if only one item is ordered.

• Alternatively, we could change the portion of courier cost that is in the purchase price to increase the advertised shipping costs. For example, instead of adding $1 to the item, we add 50 cents to the purchase price and 50 cents to the shipping cost.

• If none of these changes work, we could potentially change the minimum number of items ordered to receive reduced shipping rates. This would be quite complex to communicate and to continually support. 

The Elephant in the Room

You might be wondering why we continue to list on Trade Me, given the higher risk of loss, lower order values, and increased fees. Here's why:

• Brand Awareness: To spread the word about our existence and direct customers to our website.

• Customer Reach: Find new customers.

• Offer Afterpay to our existing customers.

• Connect with customers who prefer not to shop on other online platforms.

Wait, why would someone only shop on Trade Me?

Customers might prefer to shop on the auction site over our website for several reasons:

• Payment Flexibility: Trade Me offers Afterpay, allowing customers to spread out payments, a feature we currently cannot provide due to lower turnover compared to larger platforms.

• Trust and Security: Some customers have a strong trust in Trade Me's platform, believing it will protect their consumer rights or feeling more secure using their credit/debit cards there. Of course, as a New Zealand-based business as well, Wild Blue Dolls adheres to the country's robust consumer protection laws, including the Fair Trading Act (FTA) and the Consumer Guarantees Act (CGA). But unlike Trade Me, we offer a secure internet shopping experience where card information is not stored onsite. We use the same offsite payment processing third party as many of the large stores e.g. The Warehouse and Bunnings. Whereas Trade Me uses Ping which is an in-house application they created and continue to maintain. It is a possible point of weakness because in the unlikely event of Trade Me being hacked, there may be a risk of card numbers being stolen. 

• Awareness of Options: Customers may not be aware that our website provides various payment methods, including manual bank transactions, PayPal, and credit or debit card payments.

We will be providing more marketing material for our auction-based customers in hopes that they will shop on our website in future. 

TLDR: Long story, short

After investigating alternatives, we’ve implemented two major changes around shipping costs to keep courier costs low:

1. A portion of the courier cost is now part of the product price. The amount added to each product depends on the type of product; and

2. Free shipping is available on orders over $60 for NZ delivery, and $80 for Aussie delivery.

We will continue to list on Trade Me, but you may see different products, different pricing and/or different courier rates there depending on product type and shopper behaviour. 

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