Should you offer rush orders for a fee?

11Jan10

Suppose that you’re a typical online retailer, and your official policy is to ship orders in 24-48 hours. Sure, you try to get the product out the door as fast as you can, but you don’t guarantee any exact turnaround time for shipping a given order.

Now, what if a customer says they really, really need the product immediately, and they’re willing to fork over the money for overnight shipping and even a “rush” fee? Is this something you should consider doing on a one-time or even company-wide basis? There are several aspects to consider:

– Are you physically able to process the rush orders that much faster, e.g. all rush orders received by 2 pm will ship out that evening?
– Can you charge enough in rush fees to make up for the extra stress on your staff, along with the inevitable customer service calls from people demanding the latest status on their rush purchases?
– Will the benefits (to customers and your bottom line) make up for the small number of people who pay for the rush fee but don’t get the order on time, and then make it their personal mission to tell everyone how much you suck?

Given these complexities and pitfalls, most retailers are probably better off without a rush order option. In fact, the only company I can think of that offered rush orders was Newegg, though I don’t know if they still do it anymore. In general, you’re better off investing in good systems and practices that let you fulfill orders quickly and predictably for all customers, rather than trying to segment orders into two or more classes and dealing with all the resulting hassles.



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