Goods delivery has a great effect on operation cost of E-commerce companies. Most C2C E-commerce consumers are scattered group. Their orders are random and scattering that leads to small delivery batch and high delivery cost. Now “goods delivery” has become top-four problem of “the most untrustable issue of C2C online shopping” after goods quality, sellers’ credit and payment [1]. Next this paper will discuss China ftiture development tendency of C2C E-commerce from the perspective of goods delivery cost, delivery time and delivery quality. 3.1 Delivery cost According to the related report [1], 78.4% of online consumers choose C2C website to shop for the reason of “relatively cheap price”. By the end of 2006, the young people between 18 and 24 years old account for 35.2% of all Internet users. Main consumers of C2C E-commerce are those young people [3]. However, most of them earn a low or no income, so pursuing cheap price is their main intention of online shopping. In fact, when consumers shopping on C2C websites, they usually find that most goods always have similar purchase prices as traditional stores. Sometimes the price is even a little higher than offline shopping. Why this happens? The main reason is that online shopping has extra delivery cost. Current C2C online transactions are mainly cheap goods and the profits of these goods are very little. If adding delivery cost into the purchase price, the consumers will not take the advantage of favorable prices of online shopping, so they naturally hesitate when making online shopping decisions. 3.1.1 The analysis of goods delivery cost of B2C E-commerce As mentioned above, there are three ways of distribution adopted by E-commerce Company. The first way is mainly used in large or medium-sized companies. Taking the famous B2C website Joyo.com as an example, in March of 2002, it established Beijing Century Joyo Express Delivery Service Corporation, supplying the services including “home-delivery” and “cash on delivery” in some large cities of China [4]. Meanwhile, Joyo.com also uses the second and the third way. Joyo delivers goods by China Post in the places where no their home delivery service. However, according to postage standard of regular post service, the more goods consumers buy, the higher the delivery cost is. Sometimes delivery cost might be over one hundred RMB or exceed the value of the good itself Such high postage restricts consumers’ enthusiasm of online shopping. To solve this problem, Joyo chose to cooperate with China Post to reduce the postage since November of 2002. For a regular mail within mainland China, no matter how many goods, it only costs RMB 5. If buyers spend more than RMB 99 at one time, then they don’t need to pay delivery fee [4]. In fact, like Joyo.com, most B2C E-commerce websites have preferential delivery charge. Such as Dangdang.com, it charges free when consuming over RMB 99 one time [5]. The free level of Bertelsmann (www.bol.com.cn) is even as low as RMB 38 [6]; 2688 website offers free delivery service in most cities of China [7]. The decrease of delivery cost stimulates consumers to shop on such websites. 3.1.2 The analysis of goods delivery cost of C2C E-commerce C2C E-commerce retailers are individuals. Mostly C2C retailers sell small amount of goods with high frequency and disperse destinations. As a result, C2C retailers haven’t enough power to setup their own delivery teams, or sign a long-time contract with China Post or delivery companies. In most cases, they would choose the second or third method for delivery, so the delivery fee must be in accordance with China Post or delivery companies, so the delivery cost is high and hard to reduce. We samples retail price and delivery cost of different kinds of goods in different C2C online shops. According to our investigation data, we can get the relationship between delivery cost and retail price, shown as Fig.l. Through calculation and analysis, we get a cubic polynomial Y=4xlO””X^-10″^xV0.0101X+9.9404. Here X represents retail price and Y represents delivery cost (regular mail). y = *!;-lU* – ie-08x* * 0.010U * 9.W04 J ^ •• – ^^^’^ “- -‘^^-^-r^ r^-…-. •• . . • • =. Figure.l. The relationship between delivery cost and retail price Through colligated analysis of all the data above, we can get the delivery costs with different retail price region, as shown in Table 1. Table 1. The regular mail of different retail price (regular mail) Retail price Delivery cost 0-15 Yuan 5 Yuan 16-50 Yuan 6-8 Yuan 50-300 Yuan 8-10 Yuan 300-500 Yuan 10-20 Yuan 500-5000 Yuan 20-35 Yuan Above 5000 Yuan 35-50 Yuan Here, we advance the concept “Peijiabi”, which refers to the rate of delivery cost and retail price. As shown in Fig.l, the slope of this cubic curve is “Peijiabi”. We can see that the higher the retail price is, the smaller the slope is. Then we conclude that the “Peijiabi” of goods with high retail price is small and vice versa. In the questionnaires, we investigate consumers about “Peijiabi”. 35% of consumers will choose to give up shopping online if “Peijiabi” beyond 0.5. When the rate is between 0.1 and 0.4, 23% will choose to compare the price with the goods nearby then make the decision. As the rate is smaller than 0.1, only 2 % will abandon. We can conclude that because of the high delivery cost, the market share of C2C E-commerce has shrunk greatly. Due to low retail price, the “Peijiabi” of small-ticket items is often high. Those data confirm that the delivery cost is the key factor to influence small-ticket commodity sales online. 3.1.3 The effect of delivery cost on C2C E-commerce At present, the goods delivery costs are centralized mainly between RMB 5 and 20. The delivery cost almost equals to retail price for goods cheaper than RMB 20. This phenomenon slacks down the price advantage of C2C E-commerce and reduce enthusiasm of shopping online. However, small-ticket goods sell well now with two reasons: (1) many consumers are still suspicious of C2C E-commerce; they usually buy some small-ticket items at the first time; (2) there aren’t the goods nearby consumers want. But E-commerce platform collect many sellers who come from the whole country even the whole world, so buyers are easier to find the items they like. However, with economic globalization and growing up of E-commerce, no matter online or offline, the goods choices for consumers will be more. Moreover, B2C E-commerce companies can cooperate with distribution companies to reduce the cost by signing long-term agreement. Obviously, if C2C companies can’t lower their delivery cost, the development of C2C E-commerce will be restricted hugely.
delivery way is express delivery when shopping on C2C website”. They all express that they choose express delivery just for getting their items as quickly as possible. However, the common price is RMB 10 per kilogram through express company; the minimum charge of EMS is RMB 20. Such expensive delivery fees make many consumers lose the interests to shop on C2C website.
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