- Original Poster
- #1
Well not much anyway, according to the latest marketing email I've received from Ebay. The email is trying to convince sellers to offer free shipping on a 3 working day or less service. Here is a paragraph of the email:
' Free postage and packaging plus fast delivery are often the final consideration for buyers when deciding to buy an item. Therefore we created eBay FAST & FREE to help promote your listing to buyers when an item has free delivery and is likely to arrive within 3 working days. And it works! A test, conducted from 11 Feb to 10 March 2013 on www.ebay.co.uk, in which 40% of buyers were exposed to listings with the new FAST & FREE logo, showed an average increase in listing conversion of 3% with some sellers seeing an increase in sales of up to 14%. .... '
Now this to me says that offering free postage and daring to state that the package will definitely get to your customer within 3 days will only increase your overall sales by 3%. It hardly seems worth it. I would be interested to know what my drop in sales would be if I was to offer free postage and add the postage cost to the sale price, plus add another 12% on top of that to cover the extra Ebay costs (Ebay charge costs of 12% on the sale price but not on the postage costs that you charge). I bet I wouldn't see a 3% increase in sales then.
This just proves to me that offering free postage is not worth it. Let's be honest people who shop online are internet savvy, price savvy customers. They are not that daft, they know that £14.99 + Free P&P and £9.99 + £4.99 P&P is the same (apart from the 1p).
In my honest opinion having the prices separate looks cheaper even though it isn't (apart from the 1p). I charge my prices separate because of how it looks on the screen, and because on Ebay you save money on fees allowing you to pass on that saving to the customer. It also gives the customer bragging power when discussing their purchase with friends and family. Let me explain:
You know you get those people that go on the fruit machines in the pub, not the hardened gamblers but the ones who spend more than a little flutter. Well when they get a jackpot they will tell you how much they have won but when they tell you how much they won they won't tell you how much they put in the machine to get the jackpot. So they might win say £70 but they put £50 in to get the £70. So really they only won £20. They are conning themselves to clear it in their own minds that it's ok to spend £50 in a fruit machine and they are conning the people they are talking to as they want all the attention and to look good in front of people. You get the same in casinos, lottery players (scratch carders, might buy £20's worth a week, they get a £20 win and they shout about it), basically they only tell you the good bits that sound good and make them look good. Well I think the same happens with online shopping.
I think if you advertise say a budget digital camera as £9.99 and £4.99 P&P then their will be some customers who when their friends ask them how much they paid for their camera they will happily say they got it for £9.99 and brag about how cheap it was and how much of a good buy it was. In effect they are not lying because the camera did cost £9.99 and their friend did ask how much the camera cost. It makes themselves look good as they got a good buy and people respect people who get 'good buys'.
Now the type of people that are like this are going to be in the minority but I bet it's more than the 3 in every 100 that would be swayed to purchase if you had so called 'free' postage.
Another thing to note as well, that correlates quite nicely with my gambling example. Notice how the marketing email states that the results showed an average increase of 3% and could be as high as 14%. Notice how they are as bad as the gamblers and the bragging shopper by not telling me about the ones that didn't have an increase in sales, not telling me about the percentages of sellers that had an increase and the percentages that had a decrease.
You then start to wonder how many of these surveys they carried out, was it a bit like the Irish Euro yes or no vote where if you don't get the answer you want you do the vote again until you get the right answer?
Another thing to note, is it best to have the customer be surprised to find out that it's free shipping, or be surprised to find out that there is an added shipping cost? Both scenarios have to inform the customer, in the 'Free' shipping scenario if you don't get the free shipping message over to the customer you could then lose them to the competitor who charges separate pricing as the customer could be viewing your prices thinking they need to add postage costs on top.
So you can see offering 'Free' shipping to increase sales is one of those things that nobody really knows the true answer to, especially on Ebay where there is very little customer loyalty to think about. I just go off my gut instincts and my gut instincts with the Ebay marketing email, tell me it has got little to do with survey results and has got everything to do with trying to increase their own profits, but I think they have done a very bad job of trying to convince me, it's actually done the opposite
Chris.
' Free postage and packaging plus fast delivery are often the final consideration for buyers when deciding to buy an item. Therefore we created eBay FAST & FREE to help promote your listing to buyers when an item has free delivery and is likely to arrive within 3 working days. And it works! A test, conducted from 11 Feb to 10 March 2013 on www.ebay.co.uk, in which 40% of buyers were exposed to listings with the new FAST & FREE logo, showed an average increase in listing conversion of 3% with some sellers seeing an increase in sales of up to 14%. .... '
Now this to me says that offering free postage and daring to state that the package will definitely get to your customer within 3 days will only increase your overall sales by 3%. It hardly seems worth it. I would be interested to know what my drop in sales would be if I was to offer free postage and add the postage cost to the sale price, plus add another 12% on top of that to cover the extra Ebay costs (Ebay charge costs of 12% on the sale price but not on the postage costs that you charge). I bet I wouldn't see a 3% increase in sales then.
This just proves to me that offering free postage is not worth it. Let's be honest people who shop online are internet savvy, price savvy customers. They are not that daft, they know that £14.99 + Free P&P and £9.99 + £4.99 P&P is the same (apart from the 1p).
In my honest opinion having the prices separate looks cheaper even though it isn't (apart from the 1p). I charge my prices separate because of how it looks on the screen, and because on Ebay you save money on fees allowing you to pass on that saving to the customer. It also gives the customer bragging power when discussing their purchase with friends and family. Let me explain:
You know you get those people that go on the fruit machines in the pub, not the hardened gamblers but the ones who spend more than a little flutter. Well when they get a jackpot they will tell you how much they have won but when they tell you how much they won they won't tell you how much they put in the machine to get the jackpot. So they might win say £70 but they put £50 in to get the £70. So really they only won £20. They are conning themselves to clear it in their own minds that it's ok to spend £50 in a fruit machine and they are conning the people they are talking to as they want all the attention and to look good in front of people. You get the same in casinos, lottery players (scratch carders, might buy £20's worth a week, they get a £20 win and they shout about it), basically they only tell you the good bits that sound good and make them look good. Well I think the same happens with online shopping.
I think if you advertise say a budget digital camera as £9.99 and £4.99 P&P then their will be some customers who when their friends ask them how much they paid for their camera they will happily say they got it for £9.99 and brag about how cheap it was and how much of a good buy it was. In effect they are not lying because the camera did cost £9.99 and their friend did ask how much the camera cost. It makes themselves look good as they got a good buy and people respect people who get 'good buys'.
Now the type of people that are like this are going to be in the minority but I bet it's more than the 3 in every 100 that would be swayed to purchase if you had so called 'free' postage.
Another thing to note as well, that correlates quite nicely with my gambling example. Notice how the marketing email states that the results showed an average increase of 3% and could be as high as 14%. Notice how they are as bad as the gamblers and the bragging shopper by not telling me about the ones that didn't have an increase in sales, not telling me about the percentages of sellers that had an increase and the percentages that had a decrease.
You then start to wonder how many of these surveys they carried out, was it a bit like the Irish Euro yes or no vote where if you don't get the answer you want you do the vote again until you get the right answer?
Another thing to note, is it best to have the customer be surprised to find out that it's free shipping, or be surprised to find out that there is an added shipping cost? Both scenarios have to inform the customer, in the 'Free' shipping scenario if you don't get the free shipping message over to the customer you could then lose them to the competitor who charges separate pricing as the customer could be viewing your prices thinking they need to add postage costs on top.
So you can see offering 'Free' shipping to increase sales is one of those things that nobody really knows the true answer to, especially on Ebay where there is very little customer loyalty to think about. I just go off my gut instincts and my gut instincts with the Ebay marketing email, tell me it has got little to do with survey results and has got everything to do with trying to increase their own profits, but I think they have done a very bad job of trying to convince me, it's actually done the opposite
Chris.
