An idea to make e-commerce frictionless

Let’s say you’re on an e-commerce site like Amazon or BigBasket. You’ve decided to buy a particular product. There’s still too much friction.

You have to add it to the cart, choose an address for delivery, then choose a shipping method like Standard or Expedited. I realised that on Amazon, Expedited [1] often costs the same as Standard, in which case why are they confusing us by giving a slower option?

Then you have to decide whether to add other items to the cart to reduce shipping fees. But sometimes that doesn’t work, because those items ship from the seller, not from Amazon. There are sellers who scam you by listing the product at a low price like ₹200 with a shipping fee of ₹100. Or even more than the product’s price, like ₹300 [2].

Some items on amazon as marked as being from the Pantry, which has different policies. For example, free shipping is available only from ₹600.

I used to be an Amazon Prime subscriber, thinking I’ll get products without a delivery fee, but Amazon still charged me a delivery fee for most items. It turns out there’s some fine print saying delivery is free only for items fulfilled by Amazon. Amazon has become like your bank, promising something and cheating you out of it by putting in a lot of exceptions in the fine print. As they keep doing this, people’s positive feelings towards them erode. They became another corrupt old-world company.

A Solution

I have a solution for this. This is a different way for e-commerce sites to work. In this model, there’s no shopping cart. When you find an item you want to buy, you click a Buy button, and pay no more than MRP including shipping. There wouldn’t be a separate shipping fee for you to deal with. You’d confirm the order on one screen, with all information shown on it, rather than having to go through an onerous four-step process.

If you have balance in your wallet, or if you’re in a country where the store can automatically charge your card, that will happen. Otherwise, the order will be placed as a cash on delivery order and you’ll then get an option to pay online [3]. ZopNow does this, and makes the process of placing an order simpler.

You may think this is similar to Amazon’s 1-click, offered in some countries, but 1-click imposes a “per-shipment fee for each shipment as well as a per-item fee for each item in your order”. You pay two fees, in addition to the price of the product itself. Nobody wants this kind of fine print. People want to buy products knowing how much they’re paying, and knowing that it’s no more than the MRP they’d pay if they went to a physical shop. This proposal gives you convenience and a fair, transparent price.

How will the economics work?

This is all well and good, but how will it be economically viable for the shop to deliver without a delivery charge?

First, prices on e-commerce sites are often so low that even when you add the shipping fee, the total price turns out to be same as or lower than the MRP. So they’re not losing by charging the MRP.

Second, this proposal won’t be applicable to ultra-low value items like a shampoo sachet for ₹3. That won’t make sense to deliver free no matter what. In those cases, you’ll have to go through the traditional flow of adding things to a cart and dealing with a separate shipping fee.

Third, to make the economics work out, we’ll ship from a nearby shop, like one within a km. This means only commonly used products will be available under this scheme. Unless the price is high enough, like a ₹1000 iPhone XS case, which is probably economic to ship for free from the other end of the country.

Fourth, if you buy a few more items before the delivery boy starts, if possible, he’ll combine them. Just because you clicked the Buy button 10 times doesn’t mean that he has to make 10 trips, which wouldn’t be viable. The shop can also decide to wait for a few days to see if you’ll place more orders. If you want quick delivery, you’ll be charged extra, again to make the economics work.

Fifth, we’ll minimise overhead like a cardboard box, a printed label, a multi-page bill in the box, sellotape, and plenty of padding that’s often used even for items that don’t require it, like tea. The delivery boy will come with a big bag with everyone’s items in it, take out your items, give them to you, and leave, with no waste [4].

Sixth, the delivery boy won’t make multiple trips. If you’re not there, he’ll leave your items with security, throw them in through an open window, leave them with your neighbor, or leave them at your doorstep [5]. If they’re stolen, the site won’t be responsible. Or he’ll go back, but charge you for the trip, say ₹49 or ₹99.

Seventh, the delivery boy can also bring one or two items you buy regularly and offer them to you, to increase revenue without having to make another delivery. If you don’t buy, he can offer them to the other people whose houses he visits.

Eighth, the manufacturer of a product can offer to pay the e-commerce site the shipping fee, as a promotional scheme. Imagine an ad that says, “Buy Surf Excel on Amazon, with no shipping charge!”

Ninth, the shop that delivers the products can also use this as a promotional opportunity, say by giving you their business card or a voucher.

Tenth, this business model has a positive feedback loop. If someone near your house is ordering, it becomes viable to deliver to you without a shipping charge. This network effect can further extent the reach of e-commerce into low-value items purchased regularly, as opposed to higher-value ones purchased occasionally. In fact, every house in every road is a customer, not just the well to do ones.

Eleventh, this is not a new business model. Physical shops have long offered it, like free delivery above ₹200 at a medical shop I know. So, this model is already validated.

Twelfth, this can be an open platform where local shops can participate and define their own threshold for free delivery. That way, if free delivery of an item worth ₹49 becomes unviable, shops will naturally increase their threshold to ₹79 or ₹99. The system then becomes a self-adjusting system [6].

[1] That’s a bad name because it doesn’t tell me when I’ll get it. Call it “5-day delivery” or “7-day delivery”. Companies should use terms their customers think in terms of, not their internal jargon.

[2] Amazon should fix this by listing the total price. After all, that’s what you pay. Rank items by total price. If I sort by price, sort by total price. If I ask for items that cost less ₹200, make it ₹200 including shipping fees.

[3] The suggested payment amount will be more than the order, with the rest getting added to your wallet for future orders without the hassle of a second online payment. Maybe to cover your next month’s estimated spend. This will be presented clearly, so that people don’t feel they were misled into paying more.

[4] This will also reduce environmental damage and annoyance, since your personal information won’t be printed on the box for you to carefully tear into pieces.

[5] If it’s an independent house, he’ll try to leave it at the back door, to reduce the chance of theft.

[6] Say you bought an item worth ₹100. There are two shops in your area, one that promises free delivery of any item worth ₹70, and the other, ₹60. The e-commerce site should then route the order to the second shop. Otherwise, every shop will be incentivised to set too high a threshold to accept only profitable orders, thus picking and choosing, with the result that low-value items that people want to buy will no longer be available in the system, hurting customers. In any kind of marketplace, you need to have incentives to encourage the kind of behavior you want. In this case, the behavior we want from shops is reducing the threshold for free delivery, and the incentive offered is that you get more orders if you do that.

On-demand Leader. Earlier: IIT | Google | Solopreneur | Founder | CTO | Advisor