Free Shipping Increase Sales on Amazon + eBay ??

[danny156]

Hi,

I was wondering if anyone has experience of this on sites like eBay + Amazon ??

Does offering free shipping have an increase in sales - does it have a negative effect ?

One of our competitors has recently done this to us and it is hurting our sales + also some lines we currently run high volume low margin and so offering free shipping does push them right to the wire but due to competitors pricing we can't really afford to increase otherwise we will lose sales - but if we had free shipping and an increase in sales I think it could balance out

I have done some sums and we are looking at 22% increase in sales in order to cover the cost of free shipping this sounds high to me ?

Cheers

Danny

 

[Krash]

I can't comment on amazon but I do know that on eBay if you offer "free shipping" then that listing will go ABOVE those that don't offer this service.

Of course this is mostly due to the fact that then eBay can take a cut on the FVF including the shipping.

If you think it is worthwhile then by all means match them - but I would also be looking for another way to differentiate yourself.

 

[kulture]

On ebay, I am beginning to see a trend of people offering free shipping then saying in their listing text that they charge shipping. No doubt this is to raise their position and save FVF. It loses my custom though.

 

[Chris Ashdown]

Hi,

I was wondering if anyone has experience of this on sites like eBay + Amazon ??

Does offering free shipping have an increase in sales - does it have a negative effect ?

One of our competitors has recently done this to us and it is hurting our sales + also some lines we currently run high volume low margin and so offering free shipping does push them right to the wire but due to competitors pricing we can't really afford to increase otherwise we will lose sales - but if we had free shipping and an increase in sales I think it could balance out

I have done some sums and we are looking at 22% increase in sales in order to cover the cost of free shipping this sounds high to me ?

Cheers

Danny

How do you know they are getting the sales, do you have proof

Can your advers be better to show maybe a more proffessional adver and image of your company

A large proportion of sales is confidence with the seller

There will always be someone cheaper so hold your ground and give the right image

 

[kulture]

On amazon, stats show time and time again it is the company with the blue buy now box that gets the majority of the sales. Unfortunately Amazon decide who gets that box and it has little to do with your customer service and any other unique selling point you may have. It is mainly done on price. Although if you are within a few percent of the cheapest then other factors may come into play. Price however is the most important factor, and you have to make sure that however you choose to display the price, including or not the postage, that you make a profit after ALL costs.

 

[SamStones]

Hi,

I was wondering if anyone has experience of this on sites like eBay + Amazon ??

Does offering free shipping have an increase in sales - does it have a negative effect ?

One of our competitors has recently done this to us and it is hurting our sales + also some lines we currently run high volume low margin and so offering free shipping does push them right to the wire but due to competitors pricing we can't really afford to increase otherwise we will lose sales - but if we had free shipping and an increase in sales I think it could balance out

I have done some sums and we are looking at 22% increase in sales in order to cover the cost of free shipping this sounds high to me ?

Cheers

Danny

Just add the cost of postage onto the cost of the item and say it's "free shipping" . We get it all the time...
Customer: "x company is offering free shipping on the widget, but you're charging less overall, can you give me free shipping"
Us: "Yes, the price is now £x and shipping is free"
They soon get the idea.

 

[better]

A number of our competitors are offering free shipping, on quite a lot of there items they will be making a loss (a number have gone bust), when you add the commission fee Amazon charge, you need to make sure your still making money. We have pretty much stopped using Amazon as it just wasn’t worth the effort once they have taken their 15%.

I really can’t understand why so many people devalue the shipping part of your business. Our shipping (postage and boxes etc.) accounts for about 8% of our turnover that’s without any wages. I think for most businesses permanent free shipping is bad mistake.

Why don’t you try a special offer period and see what happens.

 

[kulture]

There is no such thing as free shipping. You have to build it into your costs and hence price somehow.

 

[cjsdh]

Free delivery is a means of promotion, it is recommended to send some gifts, perhaps it would a good point

 

[danny156]

I have always thought it was psychological

£10 + £2 p+p
or
£12 + free P+P

Although this is the same it looks different

I understand the value of using it as a marketing tool - we looked at doing it a few years back but decided we couldn't afford it but now our hand is being forced a bit to do free shipping or lose a good chunk of turnover and sales

 

[MatthewOgborne]

Howdy,

There is a +10% increase to eBay's "Best Match" algorithm, so there is a "search" benefit to offering free shipping.

If you're using more than one eBay ID then, you can mix strategies up, one account free, one account lower (but loaded into the price) and another at true shipping.

I covered it a while back in two articles for multiple eBay ID's and part 2 is here.

Hope that helps.

Matt

 

[danny156]

Howdy,

There is a +10% increase to eBay's "Best Match" algorithm, so there is a "search" benefit to offering free shipping.

If you're using more than one eBay ID then, you can mix strategies up, one account free, one account lower (but loaded into the price) and another at true shipping.

I covered it a while back in two articles for multiple eBay ID's and part 2 is here.

Hope that helps.

Matt

Cheers Matt, you always come out with great comments!

Does anyone 'know' through experience if this gives the buy box a boost on Amazon ?

 

[MatthewOgborne]

Cheers Matt, you always come out with great comments!

Does anyone 'know' through experience if this gives the buy box a boost on Amazon ?

Howdy,

Thats an excellent question, I've never really taken "free" shipping into account for Amazon, as its always been assumed that Amazon look at the sellers performance (Order Defect Rate, Cancellation Rate, Late Dispatch Rate & Policy Violations) and the total price, regardless of shipping and then compare to the other sellers of the same item.

However... If you want the greatest weighting in your favour on Amazon, use FBA. If you watch listings that have FBA sellers on them, then their exposure is exceptionally greater than non FBA sellers. Again I documented an example on this and you'll see from the screen shots, this seller was considerably more expensive than the competition.

Matt

 

[danny156]

Howdy,

However... If you want the greatest weighting in your favour on Amazon, use FBA. If you watch listings that have FBA sellers on them, then their exposure is exceptionally greater than non FBA sellers. Again I documented an example on this and you'll see from the screen shots, this seller was considerably more expensive than the competition.

Matt

We do currently do FBA - however not all of our products are suitable for it - but we know FBA works so we thought free shipping might help as well ...

 

[MatthewOgborne]

Howdy,

If it does (which I suspect it doesn't) then its weighting would be very small, as the other factors, total price and the other seller attributes would carry far more weighting.

If this was a normal website, you'd do a "split test", some with and some without, but with Amazon that's impossible as there is only one shipping setup (unless you hack/alter the weights and I'd not suggest doing that). So maybe trying loaded shipping one week and non loaded shipping the next and comparing the results?

 

[danny156]

Howdy,

If it does (which I suspect it doesn't) then its weighting would be very small, as the other factors, total price and the other seller attributes would carry far more weighting.

If this was a normal website, you'd do a "split test", some with and some without, but with Amazon that's impossible as there is only one shipping setup (unless you hack/alter the weights and I'd not suggest doing that). So maybe trying loaded shipping one week and non loaded shipping the next and comparing the results?

I might try that - cheers Matt

Danny

 

[MatthewOgborne]

I might try that - cheers Matt

Danny

Morning Danny,

Glad I could help

Matt

 

[cjsdh]

Free shipping to attract part of the consumer groups, ultimately depends on the quality of products and quality service to win the hearts of consumers.

 

[snakeeyes121]

I have always thought it was psychological

£10 + £2 p+p
or
£12 + free P+P

Although this is the same it looks different

I understand the value of using it as a marketing tool - we looked at doing it a few years back but decided we couldn't afford it but now our hand is being forced a bit to do free shipping or lose a good chunk of turnover and sales

How couldnt you afford it? the customer is still paying the shipping, its just that its hidden.. such statements make no sense unless ofcourse you were really giving them free shipping with o cost built in to your price.:|

 

[danny156]

How couldnt you afford it? the customer is still paying the shipping, its just that its hidden.. such statements make no sense unless ofcourse you were really giving them free shipping with o cost built in to your price.:|

Because we couldn't build the price into some of out key lines due to the price increase we would have had to put in and on Amazon this would have meant a loss in sales

 

[Giggleberries]

There is no such thing as free shipping. You have to build it into your costs and hence price somehow.

I agree with this, there is no such thing as free shipping. However, I would point out that research tends to show that a shipping fee rarely puts people off

 

[BWcamcorders]

On ebay offering free shipping automatically gets you 5 star DSR's in the postage category. I found this useful as I found my postage DSR was generally the lowest, so then started offering free postage on some items to boost this.

 

[danny156]

I agree with this, there is no such thing as free shipping. However, I would point out that research tends to show that a shipping fee rarely puts people off

If that is the case why do so many larger chain stores offer free shipping ??

 

[Deleted member 61074]

When buying online I would expect people to be comparing prices so it matters little if one shop sells at £12 free postage and another at £10 plus £2.

Don't most people use the total price delivered as the comparable price?

I agree with the idea of using free delivery as a marketing tool but if the end price can be beaten by a trader who adds postage you've gained little

 

[kulture]

The OP was asking specifically about Amazon and Ebay. On both of these sites, the headline price displayed does not show postage. Postage is shown in a smaller font alongside (especially on Amazon), Thus on a quick glance the person offering free postage may look more expensive than the one with a lower item price and a small postage charge. This quick glance may be enough to get the sale.

If however your postage seems high you will more likely get poor feedback.

Off Amazon and Ebay, if you have your own web site, and publish items on Google base, then the postage does not show, so you look cheaper. Again an excessive postage cost would put people off.

 

[galii]

You may use freeshipping to attract your customers. Or maybe order two with freeshipping.

 

[leepaulkennedy]

It depends what your selling. If your selling the same products as your competitor and they are offering free delivery and your not, then obviously I will place the order with them.

Personally if offering delievery is going to put your business in risk by hurting your cash flow, then I would advise against it.

Here are my recommendations:
1. Run a weekend promotion with free delivery, see how much it eats into your margins and test it from an operational viewpoint before committing fully.

2. If you can't compete on price, try altering your values for example focus on outstanding customer services, a year long returns policy - there are lots of other ways to gain customers it doesn't always have to be price, even though most people like to think so..