For an online store in Australia it is not a matter of just having a website. Retailers here have to contend with everything from onerous delivery routes and exorbitant shipping to international rivals, wary consumers, cyber risks and shrinking profit margins. There is a way to make these issues more manageable though; when a store puts its technology, service, logistics and trust under one roof as part of a single system, most problems are easier to put right. Businesses can also benefit from professional ecommerce website development Sydney.
My name is Elara Fairchild. I write from Melbourne and my experience has been in retail and small-business operations as well as salon administration. I have seen my share of customers in a shop checking prices on their phone, or putting down a card number only after they have satisfied themselves the payment page is secure. I have also seen a basket abandoned because of a delivery charge. Online retail has its conveniences but there is no magic to it. Some order is “somewhere near Wagga Wagga” and needs an explanation, returns have to be put through the mill and parcels have to be packed.
Why Australian Online Stores Have Unique Hurdles
The geography of this country is such that ecommerce businesses have to work across several climate zones and vast distances with a population that is not evenly distributed between the regions and the big cities. Put all that together and it has an impact on your advertising spend, customer service, delivery times and where you put your stock.
You cannot plan a national delivery in the same way as a metropolitan one in a country of 7.7 million square kilometres. Getting a parcel to the Pilbara or a community in remote Tasmania is not the same kind of job as one bound for inner Sydney from Melbourne.
Then there are the vagaries of the weather, school holidays and household budgets which will see Australian shopping trends ebb and flow. A retailer might have a run of good sales ahead of Christmas but demand can be slow in between and the rent, wages and software bills do not wait. The trick is to be able to fill orders in a consistent and profitable manner, not just to get them in the first place.
One Market, Many Delivery Conditions
In the major cities you have dense networks and carriers making regular collections. Out in the regions the routes are longer, surcharges are higher and there are fewer windows for collection. Throw in the wet season up north or a summer bushfire closure and there is added uncertainty.
The mistake is to regard “Australia-wide” as a blanket service. What is a sound shipping rule in Melbourne could cost a store money in regional WA. It is best to have a process in place for any odd addresses and to give realistic estimates so an order does not turn into an expensive headache.
Shipping Costs And Long Delivery Times
Perhaps the most obvious of the challenges in Australia is the cost of shipping. Carriers will price by weight, size, fuel and the complexity of the delivery while the customer wants it free. When you put those figures side by side the margin is gone before the order has left the warehouse.
The last mile is where it gets hard. An apartment block, an unsafe place to put a package or a long drive to a home can make the final leg problematic. Australia Post and the private carriers have wide coverage but that does not equate to equal cost per postcode.
| Challenge | What It Causes | Practical Response |
|---|---|---|
| Long interstate distances | Slower delivery and more freight charges | Postcode-based rates and regional estimates |
| Bulky or fragile items | Dimensional-weight fees and claims for damage | Put your protective packaging to the test |
| Remote addresses | Surcharges and failed attempts | Be clear on exclusions, offer collection if you can |
| Peak-season | Congestion at the warehouse and carrier delays | Ramp up dispatch capacity and set cut-offs |
| Returns | Double the freight and handling | Have a no-nonsense policy in plain English for the customer to see at checkout |
An Honest Approach to Delivery
Divide up your costs for the metropolis, the regions and remote areas. Unless your model can stand it, do not bury every expense in an overpriced product. Customers may not like a regional surcharge but they will have less faith in you over an unexplained delay.
There is room for free shipping if the average order value is there. Make sure the threshold is sensible and keep an eye on whether you are simply prompting small, costly purchases. “Free” is for marketing purposes.
Should your fulfilment be based in one capital city, let the other states know what to expect. If you have more than one location, weigh up the savings on delivery against the outlay for rent, technology and the risk of splitting stock. The lowest rate on freight does not necessarily make for the cheapest operation.
Delivery and service: what customers now expect
It is a different matter for the consumer today, able to put delivery promises side by side in an instant. In some product categories the Amazon effect has set the standard for speed; you will find a small Australian operation making fast delivery seem de rigueur even as it puts together orders in a spare room or from a warehouse of modest proportions.
For the most part customers are after a no-nonsense experience: they want their order confirmed without delay, stock figures to be right on the money, tracking that is of some use and an easy line to support. A clearly made promise will see them put up with a less rapid delivery. But if a store touts its speed yet offers nothing in the way of an update once payment is taken, frustration is the result.
Being predictable with every order
There is a distinction between “dispatched in two business days” and “delivered in two business days”, so make sure to show dispatch and transit times as such. An email to confirm the order should lay out both, followed by a message with the tracking once the parcel has left your premises.
Then there are the usual complications: authority to leave, getting to an apartment, a wrong address, damaged items or a package that says delivered but is nowhere to be seen. Customer service must be on top of these. A calm, brief reply will preserve a relationship where a cut and paste job that does not address the customer’s concern makes for a rough time.
I am apt to see small businesses concerned with how fast they respond but not with the quality of the resolution. To have a customer bounced about three departments is poor service whatever the speed. One should be looking at repeat contacts, refund times and the like as much as response time.
The global ecommerce market is a competitor
You have local specialists, department stores and marketplaces to contend with in Australia, as well as international retailers. Shoppers have been conditioned by the likes of Temu, Shein and Amazon to do their comparing of reviews, terms and products before they buy, and price has never been more visible.
A small store can be hard pressed by this. The big platforms put forward a wide range at lower cost while the local customer still wants the reliability of Australian support and returns. It is a quick way to erode your margins to compete on price alone.
Why a customer should stay with you
What a local store can bring to the table is knowledge of the product, curation, a recommendation one can put faith in and an answers that are faster and less like shouting into a void. Let the product page tell the story: who it is for, what it will and will not do and how it stands up to other options.
With an international retailer there are risks in the handling of warranties, returns and currency conversion. Do not put it to the Australian customer to decipher the fine print post checkout. Make those things plain.
Handle reviews with care. Some verified feedback and a good photograph go a long way to allay any doubts. There is no point in fabricating urgency or putting forward claims the product cannot back up; the distrust is not worth the click.
Narrowing profit margins and cost pressures
Inflation is being felt by the retailer as much as the customer. You may see a shopper put off a purchase or trade down for something cheaper. Meanwhile the bills for rent, wages, freight, insurance and software mount up.
Sales can be up and yet the store is less profitable. Between the discounts, the cost of free shipping, payment fees and any stock that is returned or damaged, what is left of an order is diminished. Revenue is a noisy figure, the contribution margin is what warrants a serious discussion.
Get to know the cost of an order
Factor in everything from acquiring the customer to picking, packing and shipping, through to the support and returns you can count on. Look at it by segment and category since a high value item does not of itself mean high profit.
Apply that discipline to seasonal changes. In the run up to a big sales period your stock estimates should be based on what demand has been and supplier lead times and cash flow. Overstock is money tied up, understock will leave you and the customer wanting. Either will do a small business harm.
Have a range that covers repeat purchases and various price points, with some bundles thrown in. Resist the urge to discount across the board; a site-wide sale only conditions the customer to wait, whereas a targeted offer is better for the margin.
Secure payments, fraud and cybersecurity
Any Australian ecommerce store holding payment details or names and addresses has to think about cybersecurity. A data breach or an account takeover is not just a financial hit, it undermines trust with the customer for good.
Digital payments are convenient but they add to the systems to be run. Each one, be it a card, a bank payment or a buy-now-pay-later service, has its own fees and signals for fraud. Offer what is appropriate but do not put friction in the way of the checkout.
Protect Data And Customer Trust
One should make use of an established ecommerce provider like Shopify, and for good measure keep integrations current and limit what information staff can get to. Strong unique passwords are a must, as is multi-factor authentication; when an employee departs, do not be slow in revoking access.
There are telltale signs of trouble: orders that do not follow the norm, a run of failed payments, billing and delivery particulars that do not add up, an out of the blue high-value purchase or an address change post payment. While such things are not conclusive evidence of fraud, they warrant a human to have a look before anything is dispatched.
In plain terms set out your handling of customer data. Do not amass it on the off chance. Have backups in place and an incident response process on paper, and put training in front of your people so they can spot a phishing attempt, a fake invoice or some other delivery scam. The Australian Government has some sound advice on its Scamwatch site for dealing with online scams and putting customers at ease. As systems evolve, retailers would do well to see their privacy and security protocols are up to date.
Practical Ways To Put Your Store On A Sounder Footing
Tackling the vicissitudes of Australian ecommerce is best done by way of incremental operational changes. Concentrate on those elements a customer will see first: the quality of product information, how safe the payment is, whether you can be relied upon to deliver and the support that follows.
For all the importance of technology, it will not make up for shoddy stock control or policies that are open to interpretation. A website may be quick but if it puts unavailable products on sale it is no less of a frustration than any other shop, only better lit.
A Simple Improvement Checklist
- Do an audit of delivery costs by the numbers: postcode, category and parcel size.
- Make sure returns and dispatch times are known to the customer prior to payment.
- Put the checkout through its paces on a mobile with a poor connection.
- Have a review of chargeback procedures, refunds, fraud controls and fees.
- Once you have factored in freight, advertising, returns and the like, measure the gross margin.
- Ensure software is updated, there are regular backups and staff access is secure.
- Anticipate the demand and have plans for stock and service in place for the peak season.
Mobile And Fulfilment
It is essential to optimise for mobile given the number of customers who will browse and complete a purchase on their phone. Forms should be unencumbered, images load without issue and buttons easy to tap. Run the whole course from the product page to the confirmation email in a test, not just the homepage.
The same practicality should be applied to ecommerce fulfilment in Australia. Go through an order yourself to see where the item is, who is picking it, the packaging, the label printing and the protocol for a damaged or missing product. You will find a dashboard will not show you the delays this exercise uncovers.
Should time be short and one day be all that is available to put the store in order, make the checkout, the delivery page and the customer-service workflow your priority. They have an immediate bearing on conversion and trust. A propensity for returns calls for an examination of sizing and descriptions rather than more ad spend.
Businesses on the up should weigh up self-fulfilment against a third party or another centre. Enquire as to receiving and pick-and-pack fees, storage, the limits of integration and capacity in the busy season. Order volume and the make up of the customer base will dictate the right course of action.
Some Parting Advice For Retailers In Australia
The difficulties an online store in Australia faces are of a piece. Margins are eroded by shipping, which in turn curtails the scope for service investment; and where service is wanting, trust is lost. So too is the trust underpinning any successful transaction if security is lax.
There is no call for an Australian retailer to ape the global marketplaces. What is required is a straightforward offer, honest about delivery, with secure payments and the kind of support that is of use. In planning new ecommerce website development in Sydney or putting an existing Shopify operation in better shape, think of the customer’s journey in its entirety.
Elara Fairchild has a rule of thumb for it: put in place what can be delivered with reliability, get to the true cost of an order and put right the awkward parts while they are still cheap to fix. It is not much to write home about but it is what keeps the trolley rolling.
Frequently Asked Questions
What is putting pressure on businesses in Australia?
You will find operating and staff costs are on the rise, as are technology and shipping complexities. Then there is the matter of supply chains, the caution of the consumer and international competition. Cybersecurity is also a risk. How much of a burden these are depends on the industry and the product.
Where do companies rank their challenges?
Protecting the margin, keeping digital systems secure and living up to expectations on service and delivery are the top three for most online retailers. They are interrelated: a costly fulfilment operation will eat into margins and a security lapse is bad for reputation and sales alike.
Name five drawbacks to shopping online.
There are the shipping charges and the wait for delivery, the inability to handle the product beforehand, the hassle of returns and the ever present risk of fraud or a privacy breach. A good retailer will have policies and support to offset these.
What is the rub with online shopping?
It is the disparity between what the customer expects and the reality of the cost and work involved in fulfilment. The checkout is simple enough for the buyer but the retailer has to contend with the stock, the transport, the tracking, the processing and the rest.
Can a small Australian store hold its own against Amazon?
By being responsive and offering specialist knowledge and sound advice. Do not try to compete on price. There are customers who will appreciate a local value proposition and a human to talk to if something does not go to plan.
