An important term you should familiarize yourself with is “Abandoned Cart”. An “Abandoned Cart” is when a potential buyer adds an item to “Cart” but doesn’t go through with making the purchase. But why? What stopped them from buying? That’s what we will be discussing today.
Have you ever considered that a really easy way to make more money/ sales is to simply decrease your Abandoned Cart rate. Here’s a quick example:
Let’s say you make $2,000 in sales per month now with a 90% Abandoned Cart rate.
If you decrease your Abandoned Cart rate to 80%, you would be able to make an additional $200 every month… off the potential buyers you ALREADY HAVE.
Now imagine this on a larger scale. When we decrease our Abandoned Cart rate by only 1%, we make an additional $400-$900 a DAY. That’s an average $237,250 more PER YEAR. Thats a LOT of money!
So, let’s examine the top reason why people don’t buy:
For starters, about 60% of people are just “window shopping” with no intention of buying. Depending on your industry, you may even have 80% or more of your visitors “just looking for fun”. That means we need to focus on the remaining 20%-40% who want to buy right now, but something makes them change their mind.
The number one reason for Abandoned Carts is “additional fees”; shipping, taxes or other fees in general. “Additional Fees” are the reason HALF of Abandoned Carts occur! While you can’t necessarily change taxes, you could figure them into your price, along with most (or all) of the shipping costs. After 14 years of business we changed our site to "Free Shipping" and immediately reduced Abandoned Carts by 9.5%!!!!!!
The second major reason for Abandoned Carts is that an account is required to checkout. Todays society is so fast-paced that taking the time to create an account can be a real pain in the a*s. Additionally, please get really worried that they’re going to be sent daily spam… I’m looking at you, TicketMaster. If you're selling on a Marketplace (Amazon, eBay, etc) there’s nothing you can do to change this. This is another huge change we made in 2019; allowing Guest Checkout. This resulted in another large decrease in Abandoned Carts.
The third reason is that the checkout process is long, difficult or confusing as a whole. If you're selling on a Marketplace (Amazon, eBay, etc) there’s nothing you can do to change this.
The fourth through sixth reasons are almost a tie:
Couldn’t see the total upfront (meaning, the buyer fears there could be more charges added on)
Delivery is too Slow - this is something you may or may not be able to change. For example, right now we are still under lockdown due to COVID-19. This pandemic has caused utter chaos on the shipping industry and there is literally not a single thing we can do to get parcels to our buyers faster. BUT, if you currently ship in “3-5 Days” you can decrease the time to “24 hours” and you will immediately see a large increase in sales. If 24 hours is not realistic for you, try offering a CLEAR, ACCURATE shipping schedule, such as Monday, Wednesday and Fridays… and STICK TO IT. If there is a holiday on one of the Fridays you promise to ship, you’re just going to have to ship Weds, Thrs and Monday because that’s the absolute best you can do unless you live in a state where the post office is open on Weekends. Our local post office is not here in Michigan.
The next part of the 3-way-tie is “Site Seems Fake / Scam / Not Trustworthy”, understandable. I have personally bailed on many purchases because nothing on the site said where they were located or even who they were.
And the final part of the tie is that the site isn’t working, taking too long to load or crashing. Also understandable.
The last reasons make up a small percentage of people but include a bad Return Policy, not enough payment methods and credit card was declined. I have a couple notes for you here: Almost half of our buyers use “alternative payment methods” such as Pay Pal, Amazon Pay, Google Pay, Apple Pay, etc. If the only payment method you are offering is direct credit card, this can scare people because they just don’t want you having their credit card numbers and they do not understand that you can’t ever see their credit card numbers.
As far as the card being declined, this is a really big reason for our Abandoned Carts. Most people do not realize that their card will automatically block a payment for $300 or more if they do not commonly spend this amount. It is called “Automatic Fraud Prevention” and it is 100% operated by AI (Artificial Intelligence) through the card company (Visa, MasterCard, etc). People do not understand that all they have to do is tell their bank it really IS them trying to run this charge, then the bank will un-block the lock. However “insufficient funds” are also another common reason for our declined-transaction Abandoned Carts in addition to the buyer outright typing the wrong Billing info. For example, if the buyer’s CVC code on the back of the card is 845 and they keep typing 234, the transaction will keep declining.
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