To free P&P or not?

[oatz]

What's the best approach from a marketing point of view?

1) To offer free P&P (perceived to be free, in other words include this cost into the sale price of the product making the product more expensive)

OR

2) Add P&P afterwards as separate cost?

Any one with any experience on which method works most effectively would be greatly received? In other words, which strategy yields the best response rate/sales? Oh and I'm selling clothing that I design and therefore isn't available elsewhere for a lower cost

Cheers in advance!

 

[marketimpact]

If you look at amazon or play.com you will see that they offer FREE DELIVERY. They are obviously a huge company and they can afford because they buy in bulk and at low prices.

If you have your own company where you make bespoke clothing and offer FREE DELIVERY this would I think personally increase sales. The structure of your webshop is very important and you have to make it clear that you have FREE DELIVERY everywhere to make it easy for people to understand.

I have a few online shops and I offer FREE DELIVERY because I use dropshippers who in turn they offer FREE DELIVERY. IF I had stock and FREE DELIVERY could be used I would (only if you can afford to do it and have a healthy profit margin)

 

[fiona davies]

I also think free p and p is important if you can do it. I have often shopped online, added things to my cart and thn not completed because of high p and p. Make sure it is obvious on your site.

 

[BarnyB]

Hi there,

I'll be honest, i'm still very new the world of ecommerce, but when we debated the whole free postage issue we decided in the end that the margins weren't there for us to offer it. If your making your own bespoke products, which aren't available for price comparison, I'd include the cost of P&P in your product price and offer it as free.

Postage won't add too much to the overall cost of your products (will it?), and everyone loves free P&P!!

Just my thoughts on the subject.

Good luck whichever you choose!

 

[deniser]

We started out with free P&P over a certain amount but found it ate too much into our profits. We took it away and there was no difference to our sales at all. But it was £2.95 originally (now £3.50) so cheaper than other companies so no-one minded paying it.

The problem is if it is free and items are returned (a percentage of which they will be with clothing) then you have to refund all the purchase price with nothing to deduct for postage - which you can deduct normally (unless people cancel within 7 working days which they don't usually if you give them a nice long returns period).

 

[edmondscommerce]

Yep for the SME level I think you are better off keeping your product prices down as much as possible and adding on shipping - this helps you to look competitive

I think people realise that it does cost money to ship stuff and are happy to pay a reasonable amount.

If you try to make profit on your shipping charges though that's another issue.

 

[MDG]

We offer free shipping on sales over £50, many people do seem to buy a few extra things to push their order over £50 to get free shipping so I think it does influence buyer behaviour.

 

[Billmccallum]

The issue of free delivery can be a delicate issue for small businesses, everyone knows that when free delivery is offered, then the cost has to come from somewhere, so the price goes up to cover all costs.

As has been noted, if an item is returned, you have to refund the cost price, so for some businesses (where a higher level of returns can be expected) its best to keep it as a separate item on the final bill.

It comes to the fore when some businesses (especially on ebay) sell items at very low cost and hike up the P&P to £3.99 to send a package that costs less than a pound to post. (been there and paid through the nose).

The critical answer is in the volume of deliveries you have to make. Small quantities means buying packaging in relatively small lots or buying in bulk and taking all year to use it.

 

[webgeek]

None of the online shops we manage use free delivery. Why? Because a significant amount of traffic and sales come from Google products. If a customer searches for a blue widget, the first pages of results (when sorted by price) will not have any free shipping vendors.

Customers will rarely surf down 2 or 3 pages, looking for a free shipping vendor who happens to have higher prices.

If you're not planning to use Google products, then ignore the above strategy and use free shipping - because customers love it!

I know of a few companies who run multiple stores all with different domains, colour themese and pricing, then market through different channels. This way, each store can maximise the strengths of the pricing model they follow. Food for thought...

 

[GeeWizz_Designs]

I like the idea of charge for postage normally but offering free postage incentives.

It means youve always got a selling hook....Spend £x amount, get Free shipping.

Buy between 2 dates, recieve free shipping etc etc.

People can sympathise with smaller companies online who charge for postage as everyone needs to cover their costs, so long as your costs are realistic.

 

[deadgoodundies]

There is also a third option

3. Charge postage but offer free returns

 

[edmondscommerce]

I know of a few companies who run multiple stores all with different domains, colour themese and pricing, then market through different channels. This way, each store can maximise the strengths of the pricing model they follow. Food for thought...

Magento is awesome for this kind of set up

 

[phil battison]

We ran with Free P&P for around 5 years and then finally decided (with some real concerns) to introduce a £1.95 1st class postage charge on orders below £30. We should have done it years ago.

I don't think we've lost business and its has helped us compete on sales of multiple items becuase the unit cost is now far more completitive. With the postal charges about to go up again soon the challenge is keeping the charge to a level which looks fair whilst actually covering our real P&P costs.

 

[Astaroth]

If you are selling unique items then free P&P can be a nice promotion (or free if over X value).

Whilst your designs are obviously unique, just how "unique" are they really? Whilst no one else is selling something identical are people creating something similar that someone may be comparing your products/ pricing/ service to? If I were selling canon dSLR cameras I wouldn't only look at the prices of my competitors selling canon but also those that are selling the equivilant cameras by the likes of Nikkon etc.

Are you intending to list on price comparison sites? If you are then item price becomes more important as whilst some allow them to list by complete price it is more common to list by item price (ie exc P&P for those that charge seperately).

 

[Cloughie]

Customers LOVE free p and p because in their eyes its an EXTRA cost they have to pay to get the product even though probably if it was bought in a store it would total more. It;s something pshychological about paying it which customers hate.

So, if you can build the cost into your product, be competitive and offer it, do it in my opinion.

 

[gois333]

If you're going to absorb the p&p prices in your product prices, don't forget if you're going to be marketing through channels such as google product search, it may not necessarily be obvious to the buyer that the p&p is free when they are comparing the product with a bunch of others in a long list on screen. Generally when I search through google shopping, I sort by price, low to high and start looking at the lower prices that match the product description. If your p&p is part of your price you would appear to be more expensive than others.

 

[edmondscommerce]

Yep thats the rub basically...

These days a lot of traffic is going to come in direct to deep links (product pages) from price comparison sites and the like.

On those sites the product price is the key.

When I think about it I think all of my high turnover clients charge for shipping, though they don't charge much.