After only the refund, the compulsory freight insurance becomes a "powder keg" between the platform and merchants again?

E-commerce platforms strengthen freight management, crack down on merchants' abnormal freight behavior, and improve user experience. Merchants are facing new challenges as their freedom to set freight rates is limited.

The latest operation of the e-commerce platform regarding shipping costs is here again.

On June 19, Tmall officially announced that it will regulate merchants’ abnormal shipping fees. Specific measures include adjusting the upper limit of shipping fees, which is aimed directly at merchants’ illegal business practices of setting excessively high shipping fees.

Since 2024, a series of bargaining has been launched between e-commerce platforms and merchants around freight rates. This time is just a continuation of a series of operations. Before this, the policy of compulsory freight insurance also caused quite a stir in the circle, which in turn triggered a series of reactions.

Why has freight become the focus of attention?

1. Frequent Rashomon incidents behind freight disputes

The platform took action because the user experience was indeed negatively affected by the malicious setting of the cap.

On Xiaohongshu, some people complained about merchants maliciously setting high shipping fees and then blacklisting and running away:

"The shipping fee for a short-sleeved shirt from Xiamen to Zhejiang was as high as 500 yuan. I contacted the customer service and they said the price was what it was. Then they changed their answer to say it was a problem with the platform, and finally changed their answer to say it was a problem in my region."

Image source: Xiaohongshu

What’s more important is that the consumer finally asked the platform, “Doesn’t the platform have any management?”

In the comments section, the consumer described the details of what happened, "I ordered clothes from her store, but the merchant falsely shipped the goods and filled in a fake logistics number. Because I had the logistics information, I couldn't complain, so I ordered again. The merchant deliberately changed the shipping fee by 500 yuan and blocked me directly. It was useless to complain to the system. The platform determined that my order was risky and refused to compensate. I could only get a refund."

Coincidentally, some consumers also reported that some merchants defrauded them of shipping costs. They bought a large number of knitted bags on a certain platform. The initial shipping cost was 173 yuan. Before placing the order, the consumer consulted the merchant about whether the goods were in stock and the delivery time. He proposed to change the logistics channel to SF Express. The merchant immediately stated that he needed to pay an additional 600 yuan in shipping costs. However, after the buyer called SF Express customer service for consultation, he learned that the two shipping costs were 134 yuan/139 yuan respectively, and the merchant charged a total of 500 yuan more in shipping costs.

Similarly, consumers eventually ended up on the platform: "I contacted the platform's customer service, but they still favored the merchants."

From Taobao's proposal of "returning to users" last year, to JD.com's Xu Ran repeatedly stating that improving user experience is the endogenous driving force for growth, to Douyin, Kuaishou, and Video Account all expressing their importance to users, now that low prices have reached the extreme limit, everyone is putting their chips on how to attract buyers back.

In this case, if this happens too often, it will undoubtedly be extremely dangerous for the platforms that place great emphasis on user experience. It is only natural to control it.

2. The freedom to set freight rates was once a weapon for merchants

Xiao Tao has been working in e-commerce for ten years. He told us that merchants have been micromanaging shipping costs since e-commerce became popular. At that time, the high shipping costs deliberately set by merchants were called "anti-bidding prices" in the industry.

For some products that require high timeliness and are shipped to very distant regions, the delivery cost is high, so setting high postage is inevitable. However, sometimes there are special circumstances, such as during the Spring Festival holiday, when many merchants do not want to accept orders or ship goods, so they will set the shipping price to be visibly outrageous.

Xiao Tao said that merchants also have their own difficulties, "because if someone places an order, they have to ship the goods. If they don't ship on time, the store will be deducted points by the platform, affecting their own traffic and customer sources from other channels."

Since the merchants are afraid of people placing orders, why don’t they just remove the products from the shelves? Xiao Tao’s answer is that the cost of removing products from the shelves is very high.

"It is very unwise to remove products from the shelves. First, if you remove the products, the traffic during the Spring Festival will have nothing to do with you. Everyone knows that the traffic during the Spring Festival is very good, which is equivalent to you withdrawing from the competition. Second, removing the products from the shelves will cause the weight accumulated by the link before to be lost, and it will be very difficult to restore the previous weight later."

Including daily operations such as through trains and super recommendations, it takes a lot of time and money to cultivate a good link. The time and money costs behind this are so high that merchants have come up with the idea of ​​setting extremely high shipping fees to force buyers to give up.

Not only that, Xiao Tao further admitted that in the past, the pre-sale period of big sales was the time most often chosen by merchants to raise shipping rates.

In the past, e-commerce platforms would set up a pre-sale period to warm up for the Double 11 and 618 promotions. Goods during this period often require additional marketing and storage costs, and high shipping costs can help spread these initial investments to a certain extent. By setting higher shipping costs, merchants can ensure that costs are partially covered even when sales are uncertain.

In addition, the pre-sale model allows merchants to adjust production or procurement according to order volume, reducing the risk of inventory backlog. High shipping costs can inhibit orders from consumers who are not in a hurry to buy or are price-sensitive, thereby reducing production and inventory risks.

"If there are more orders, it means my products are well-recognized. For the same total price, in the eyes of some people, a product with free shipping for 100 yuan is more cost-effective than a product with a price of 90 yuan plus 10 yuan for shipping. Then I will adjust the demand by adjusting the shipping price, so as to better manage costs."

Not only that, merchants can also set psychological expectations by using high shipping costs during the pre-sale period, and then create the illusion of "discounts" by lowering shipping costs during the official sales period to stimulate purchasing desire.

High shipping costs can be used as a strategy to differentiate itself from competitors, especially when products are highly homogenized, to attract consumers through differentiated services. "I put part of the profit into shipping costs, so I can attract people with a price of 90 yuan, and the customer flow will naturally be better than that of 100 yuan."

Although this has invisibly increased the possibility of potential disputes among merchants, buyers, and platforms, it is undeniable that the freedom to set freight rates given to merchants by the platform has indeed made things more convenient for them.

3. Mandatory freight insurance + only refunds, merchants have a hard time

Looking back at this 618, there is a new operation - cancellation of pre-sale.

Objectively speaking, with the cancellation of the pre-sale system, it is no longer meaningful for merchants to have the freedom to set shipping fees as high as before. But at the same time, the platforms have other operations.

We all know that in the past two years, the e-commerce industry has become a tangled knot, and since the second half of last year, the tangled knot has become tighter and tighter. In order to grab users, major e-commerce platforms have used every possible means.

At the end of last year, Taobao changed its return policy to support refunds only. Prior to this, "refunds only" was a proactive after-sales mechanism launched by Pinduoduo. In September, Douyin e-commerce also updated a rule about "refunds only".

Not only is there a refund, but mandatory shipping insurance also comes with it.

First, Douyin’s 38 promotion stipulated that merchants must provide free shipping with freight insurance, and the price must pass the low price verification. Later, Taobao, JD.com, and Video Account also joined in, and even directly upgraded to the level of mandatory freight insurance on 618.

In fact, before the mandatory buyer freight insurance, the price of freight insurance provided by insurance companies to sellers had already risen sharply. On Xiaohongshu, many merchants said that the price of their freight insurance for each order was 3 to 5 yuan.

Image source: provided by the merchant

After the mandatory freight insurance, the threshold for returns has become lower and lower. More and more users are buying with a try-and-see attitude. After all, if the purchased product is useful, you can keep it for use, and if it is not useful, you can return it and there is no loss.

As a result, since this year, the merchant return rate has been pushed higher and higher.

Some merchants who make custom handmade products said that their return rate was about 1% in the past two years, and this year it has reached 10% to 20%, while some clothing merchants have seen their return rate rise from 20% to 50%. There was even a time when a women's clothing merchant said that his return rate reached 80%, saying that the online store had become a "cyber dressing room."

Mark: Return rate is over 65%

The direct consequence of the increase in return rates is that insurance companies are charging sellers higher and higher prices for freight insurance. Some merchants even said that their freight cost per order was only 4 yuan, but the freight insurance cost was 4.7 yuan, and the average customer order was only a dozen yuan, which was equivalent to losing money to gain publicity. When everyone is trying to gain publicity, the sellers are left with only losing money.

Even if it is not during the 618 period, it will be a "disaster" for sellers if they do not purchase freight insurance on a regular basis.

One merchant said that he was engaged in custom-made tiles and shipped the goods after confirming the model. The customer received the goods but did not like them and decided to return them. However, the platform insisted that it was the merchant's problem and ordered him to bear the round-trip shipping fee totaling 3,600 yuan.

"My total payment for the goods is only 2,900 yuan, and you want me to bear the shipping fee of 3,600 yuan. It would be better for me to just deliver the goods to the customer directly."

In this case, the merchants can only raise the freight rates to cover the increased costs of freight insurance. As a result, the cycle of revenge continues, and the merchants are left with a spiral of losses.

Merchant Li Wei told us, "We have no choice but to do this. If we don't raise the shipping fee, we won't make any money at all."

Not only that, compulsory freight insurance also brought about loopholes in the rules, and some people even started the business of taking advantage of freight insurance.

Image source: Xiaohongshu

Li Wei told us, "We negotiated cooperation with online stores with large shipment volumes, and worked with express delivery stations to lower the unit price of shipments. One order only costs 3 yuan, and the freight insurance compensates me 8 yuan. I placed an order and refunded it directly upon arrival. I made a net profit of 5 yuan without any cost."

In the final analysis, merchants also have their own difficulties. Apart from a few bad merchants who maliciously set high shipping fees, for most merchants, as costs in various aspects increase and their own profit margins are constantly compressed, their efforts to cover part of the costs from other aspects naturally fall on shipping fees.

4. Final Thoughts

Not long ago, Fang Jianhua, the founder of Guangzhou Huimei Fashion Group, the parent company of women's clothing brand Inman, published an article entitled "Calling on relevant departments to intervene in the crackdown on "mandatory freight insurance", which touched the hearts of many merchants.

But to be honest, at this stage, the implementation of freight insurance is only superficial. In essence, whether it is the increase in freight rates, the sharp increase in return rates, or the closure of merchants, behind them are the trade-offs of the overall environment where consumption momentum is missing, market growth is no longer there, and competition among various entities is intensifying.

Of course, while major platforms are pushing freight insurance and refund only, they are also trying to balance the platform's tilt between merchants and users by providing sellers with freight insurance and freight subsidies during the 618 period.

However, in the zero-sum game, merchants should realize as soon as possible that only by finding real users and real traffic methodology can they coexist with the platform. Otherwise, if they are overly dependent on the rise and fall of the platform, merchants will always be the weak party that cannot survive independently.

Author: Guangchen

Source: WeChat public account: " Xinou "