Since the pandemic, more and more people have been buying a wide variety of products online. One click, wait a few days and enjoy from the comfort of your own home. However, one thing seems particularly annoying: the minimum order value.
The question of why
Many mail order companies tie the benefits of their online shop, such as free shipping, to a minimum order value. Customers seem to find the minimum order value annoying for various reasons. The online retailer’s website appears less user-friendly, as the buyer has to adhere to given dimensions. This restriction may result in a purchase not being made at all. The disadvantage clearly arises on the dealer’s side, because he cannot sell his goods and makes less sales. But is that really true?
To answer this question, it is important to first consider why there is a minimum order value at all. The minimum order value is primarily profitable for the online retailer. Since it doesn’t have to ship individual orders or orders with low sales, it saves money and time. The logistics effort shrinks significantly, at least in theory. In addition, the minimum order value can also be used sensibly in marketing. For example, similar products can be offered at a higher price in order to meet the minimum order value. This practice is called “up-selling.” Alternatively, suitable products are offered that complement your purchase and also help you reach the minimum order value. In this case, experts speak of so-called “cross-selling”. This increase in the average shopping cart value can, in turn, lead to higher sales for the company. This enables smaller companies in particular to better cover their monthly costs. On top of that, the environment also benefits, because fewer packages mean less pollution.
The usefulness of the minimum order value
Now that the benefits have become clear, it hardly seems surprising that companies like Zalando are now introducing a minimum order value for free shipping. The ever-increasing costs must be covered. As part of a cost-benefit analysis, it now seems sensible for large online retailers to introduce a minimum order value. Or in the case of Amazon, even increasing it from 29 euros to 39 euros.
Although the minimum order value makes sense to a large extent and has some advantages, in the end it remains a matter of consideration. The company must decide whether small orders are profitable relative to the cost.
Editorial team finanzen.net
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