Shopping online for a gift, a woman finds the perfect jewelry box for her friend. Satisfied with her discovery, she clicks the checkout button only to learn her order is below the minimum purchase requirement. Searching the site, she can’t find anything else she likes, so she buys a similar jewelry box from a competitor who doesn’t have quantity stipulations.
What happened here? The first ecommerce vendor imposed a mandatory minimum to check out, which cost them the sale. Below, we’ll examine a few of the pros and cons of minimum order requirements.
Pro: Covers Shipping Costs
The primary reason e-store vendors employ mandatory minimum order requirements is to cover their shipping costs. Think about it, if you are selling novelty socks, the price per product is probably too modest to absorb $7 for shipping. Similarly, selling floor samples online might put your business in the red if not for mandatory checkout requirements. So, in many ways these stipulations are a necessary evil to keep your business in the black.
Here’s a pro tip: If you must use checkout requirements, let your shoppers know about it before they check out. Add a simple warning to the top of each page or next to the ‘add to cart’ button to prevent surprises.
Con: Drives Shoppers Away
One of the biggest concerns regarding minimum order requirements is that consumers will jump from your store to a competitor (just like in the above example). These concerns aren’t unfounded. According to Multi Channel Merchant, “ease of doing business” is a key factor in a buyer’s decision to purchase goods from a company; and, in this regard, minimum purchase requirements are seen as an obstacle.
Even worse, this problem might derail long-term customer loyalty. Sometimes consumers like to test the waters. If a shopper is prevented from buying one low-cost item from you today, they probably won’t come to your e-store the next time they need something. However, if they make a $10 purchase this week and really like it, they might be more inclined to spend more next time. Neither outcome is guaranteed, so you need to consider the consequences for each action.
Pro: Opportunity to Up Sell
Of course, there are creative ways to coax customers beyond the minimum order requirement without thwarting their enthusiasm. Let’s say you want to create an ecommerce website that sells and delivers flowers. A $15 bouquet might fall under your $25 order requirement, but a few suggestions to make the gift extra special could score your store some extra cash. Walk your customers through the process of ordering a $5 vase, a $2 card, a $4 balloon and a $10 stuffed animal. Presto! You’ve turned a $15 request into a $36 order (without shipping).
Another idea is to just charge the consumer the difference. Believe it or not, a time-pressed consumer might be willing to fork over an extra $10 just to get the process over with.
Con: Barrier to a Quick Checkout
It’s important to keep in mind that order minimums violate one of the cornerstones of ecommerce etiquette – keeping the path to checkout free of obstacles. Truth be told, 27 percent of consumers abandon their shopping cart because the checkout process is too complicated. This includes stipulations about how much a customer needs to buy before entering their credit card information.
If you want to implement a minimum order requirement without overwhelming your prospective buyer, you should try including a “you might also like” button on your check out page. It often takes just a few cheap goodies to push them over the limit. This way, shoppers won’t have to leave the checkout page to add new items to their cart.
In the end, the way you run your store is completely up to you. Just don’t forget to think about your customers when making the final decision about imposing minimum order requirements.