Free Shipping?

[Jayser100]

Hi Chaps,

I've offered free shipping for years on Amazon UK but due to rising costs I am thinking of making a £1.00 charge per order. Does anyone think this will adversely affect my sales? What are your own experiences?

To clarify, I sell my own unique branded products and so there is no competition for the 'Buy' box on anything I sell. Obviously there are rival (sunglasses) products challenging for the same business.

Do you think people really spend time working out the cheapest deal by checking shipping info, or do they just lazily go for the cheapest product of a type in the list?

Thanks in advance for your comments

John

 

[bharris]

If you are going to charge shipping then i would charge a price that pays for the actual shipping cost. Can you post the sunglasses as a small packet, if not then i would charge £2.50-£4.00 for postage. If your Sunglasses are only sold by you then what makes people choose yours, If you have good USP then i would charge for postage. More and more websites (non Amazon/eBay) are now charging for postage its to expensive to give away, unless you can hide it in your product price.

 

[Raw Rob]

Wasn't there some study where Amazon were charging something like 20p shipping in one country (maybe France?) where other countries the equivalent was free and it made a massive difference to conversion rates. (Can't remember the details, maybe you can google it.)

If you're only going to charge £1, personally I would go for increasing the price of your products by £1 instead. (Although only you can know if that makes sense or not.)

 

[Pish_Pash]

I think it would be a big mistake to charge shipping - just build it into the price. Not so sure about Amazon product searches, but on Ebay, some customers search only for those items that have free shipping. People are unfeasibly tight.

 

[mrvillicus]

I used to charge shipping but after some quite deep research I came to the conclusion to offer free shipping and factor it into the cost, if like me you have an extremely unique/niche product then as long as the retail price is attractive (including your shipping fees) I think its the better option to choose. Personally when buying online if I find an item which is reasonably priced with free shipping I'll choose that option under the thought that as long as the product is priced competitively, then I'm kind of getting something for free!! Since choosing to offer free postage my sales have increased and the feedback I have is that my products are more attractive to the buyer with free postage. Good luck

 

[14Steve14]

Nobody has yet mentioned that there is no such thing as free postage. It has to be paid for somehow. If its not included in the product price its added as an extra. Assuming that you only sell one product to each customer at a time, then it is probably easier to include the postage cost in the product price. If you generally sell multiple products to the the same customer in the same order, then you may be better charging for postage as an extra, as I doubt you could work out a fair way of discounting the postage costs on multiple products. If you do not discount the postage costs on multiple product orders then customers will see your postage included costs as a rip off and will shop elsewhere.

You know your customers and market better than anyone so you really have to make a decision based on what your customers want.

 

[IanDade]

I read an article somewhere a while ago about buyers thought processes with regard to shipping costs.

Put 2 of the same item for sale on eBay/Amazon. One for £75 and free shipping and one £50 with £25 shipping. Same price, same product.

When the customer who purchased the £75 item with free shipping, when they are down the pub and telling their mates about their purchase, they tell them that they paid £75 for it.

When the customer who purchased the £50 item with £25 shipping, when they are down the pub and telling their mates about their purchase, they tell them that they paid £50 for it, no mention of shipping costs.

This would suggest that customers disregard the shipping costs from the overall cost of the item. In a similar way that when an item costs £9.99 people tend to say it cost them £9 rather than £10 as they disregard the pennies.

By no means is this an answer, but i thought it was an interesting take on the whole free/paid shipping debate.

The correct answer is that their is no correct way, what is correct for one seller is wrong for another.

 

[Pish_Pash]

The one downside of building the ahem 'free shipping' into the sale price, is that obviously it takes the 'price paid' point up in the buyers mind (as we've all gathered, customers really do think the shipping is free), that raises the bar in terms of what they expect from the product.

Example, widget 'A' sells for £10 + £2.95 postage....it's already priced at the top end of similar competing products...but in the buyer's mind he has paid £10 for the product. if you then build the actual shipping cost into the price & then sell the same item for £12.95 delivered, the buyer thinks he has paid £12.95 for it (!) ...almost a whopping 30% more for the product ...accordingly his expectations are higher for the product (& the potential for "not worth it" type comments in your feedback trail!).

[Slightly off] I always want to yell when I see such "not worth it" type comments, of the £12.95 a customer paid, £2.95 was postage & a further £2.16 went to HMRC ...essentially that values the product sold for £12.95 at just £7.84.

Does the customer blame the government for the cost premium? Nope
Does the customer blame the courier company for the cost premium? Nope

it's my fault!

 

[mrvillicus]

pish pash just made me regret offering free postage!! great post

 

[silvermusic]

I too have my own product I make that's exclusive to me. In April 2014 I stopped all free P&P and put my prices up by between 10-30%. Has it made any difference, yes I'm selling the same amount but with a significantly increased profit margin, which was excellent to start with. It's all too easy to under-value yourself and products especially if you do have something different from the crowd.

 

[adamo]

If I was selling products on eBay or Amazon, I'd probably offer free postage and simply add the cost to the product price. I find that the 'free postage' mentality really works, especially when I'm shopping online. I'm almost certain if you A/B tested the same product, with one separating the product and shipping price, and the other combining both in the product price, the latter would have a higher conversion rate.

 

[silvermusic]

If I was selling products on eBay or Amazon, I'd probably offer free postage and simply add the cost to the product price. I find that the 'free postage' mentality really works, especially when I'm shopping online. I'm almost certain if you A/B tested the same product, with one separating the product and shipping price, and the other combining both in the product price, the latter would have a higher conversion rate.

I've done the testing on eBay, they're very price conscious on there for commodity products. Product + P&P or Product inc (Free) P&P, makes little difference, best overall price wins.

When you have you own exclusive product, then it gets interesting. Charging P&P and discounting or free P&P for multiple purchases works best, at least that been my own findings over several thousand sales.

 

[MOIC]

If you have a niche product, the fact is you are not competing in price with the masses, which should allow you to earn a healthy margin and accordingly build the postage into your price.

Free postage is perceived as added value if you are selling your own brand and niche product as prices cannot readily be compared to other sellers.

Depending on the selling price, free postage and adding £1 on to the price, is a better option than charging a £1 postage fee.

If you have different ranges within your brand, experiment using both formats and see the reaction.

 

[silvermusic]

I have a single fixed price for P&P no matter how many items you buy, As about 80% of packages go out large letter I can fit multiple items for the same cost to me anyway. you're right, it does depend on what you sell and how much it costs to post. My own feeling on the so called Free P&P is that customers are wising up to the fact there's no such thing, doing a discounted or same rate no matter how much they buy I personally finds works best.

With low value stuff I feel sometimes it's easy to over-think things, impulse purchases don't need free P&P, just something sensible.

 

[Mail Workshop]

Hi Chaps,

I've offered free shipping for years on Amazon UK but due to rising costs I am thinking of making a £1.00 charge per order. Does anyone think this will adversely affect my sales? What are your own experiences?

To clarify, I sell my own unique branded products and so there is no competition for the 'Buy' box on anything I sell. Obviously there are rival (sunglasses) products challenging for the same business.

Do you think people really spend time working out the cheapest deal by checking shipping info, or do they just lazily go for the cheapest product of a type in the list?

Thanks in advance for your comments

John

Hi John, am interested in finding out how many items you send per day, might be able to save you some money on your shipping as we (Parcelhub) integrate with Amazon.

 

[GoPromotionalUK]

Any e-commerce owner is going to be thrilled to raise orders/sales by this much. However, unless repeat purchases drive a large portion of your sales, offering free shipping may not be profitable. It’s not worth offering free shipping unless you can make the offer profitable. Don’t stop at free shipping alone! Once you’ve determined how much free shipping lifts your conversion rate, try adjusting your thresholds, using restrictions, and increasing your prices to squeeze some additional profits from your free shipping offer. See if you can find the ideal combination of higher conversion rate and profits that give you a profit boost and new additional acquired customers.

 

[Mail Workshop]

We found some interesting facts on whether you should offer free shipping, http://www.parcelhub.co.uk/offer-free-shipping-online-store/ such as that older buyers are more patient.

 

[ParcelBright]

You should absolutely build shipping into your price. Free shipping is hugely appealing to consumers. Even when the total price is more, people choose the option with free shipping - time and time again.

 

[mac456]

We decided to charge postage and it hasnt effected our sales

 

[silvermusic]

You should absolutely build shipping into your price. Free shipping is hugely appealing to consumers. Even when the total price is more, people choose the option with free shipping - time and time again.

Nonsense, for want of a stronger word. The only people still spouting that old line are those that have a vested interest in shipping services to cover up the real cost. The general public are far more savvy than you give them credit for, they're well aware that there's no such things as "free", the total price is what matters nowadays, comparing prices and deals on the net is as simple as a mouse click.

 

[JPMiddleton]

Nonsense, for want of a stronger word. The only people still spouting that old line are those that have a vested interest in shipping services to cover up the real cost. The general public are far more savvy than you give them credit for, they're well aware that there's no such things as "free", the total price is what matters nowadays, comparing prices and deals on the net is as simple as a mouse click.

If you are talking website customers you are bang on, less so when speaking about eBay, and a small percentage of Amazon customers too. We tend to find the savvy ones are those that come to our site, and eBay customers (whilst still caring about price) are increasingly more attracted to the simplicity with a "it's easy, I don't need loads of store accounts" attitude.

 

[JPMiddleton]

You should absolutely build shipping into your price. Free shipping is hugely appealing to consumers. Even when the total price is more, people choose the option with free shipping - time and time again.

I think that's a little naive to simple say it should be included like that.

If a customer buys 5 items at £5 plus £2 shipping that's £27. By your model I'd need to factor in an extra £1 per deck (shipping becomes better value the more you send obviously). Which means the customer pays £30. Offering free shipping OVER a certain amount spent is a GENUINE way of offering something that is closer to free shipping, of course you still factor it in overall but the customer actually sees more of a benefit and understands it's akin to a discount.

 

[japancool]

You should absolutely build shipping into your price. Free shipping is hugely appealing to consumers. Even when the total price is more, people choose the option with free shipping - time and time again.

Not if your competitors aren't doing it. The vast majority of people, in my experience, don't compare the cost including shipping, they compare the headline prices.

 

[Banksbroo]

Great conversation here. I've wondered for years whether to go for carriage included in price (free).

I sell my own range of specialist perforated paper, fairly bulky, and very heavy. At the moment I charge a flat rate £10+ VAT on all order. Shipping costs are very clear on the product pages and at checkout, but I'm sure a few customers still baulk at paying £10 when other stationery retailers offer free carriage.

My shiping costs average £9 - £14 on single unit sales, and up to £30 on larger quantities.
90% of sales from my own web site, and almost all B2B. I'm looking to put onto Amazon as well, and am seriously looking free carriage with pricing adjusted to suit. I think a lot of it comes down to the psychology of buyers. Their decision to buy can be very different to their appreciation of product value or cost after they have placed an order. The analogy of pub conversations is about how people feel after a purchase, but may not tell us much about why they did or didn't make a decision to buy in the first place.

I find that my buying decisions as a consumer are very different from those as a business buyer! Surely not logical, but that's what happens! So for example when buying on Amazon as a business, I have to ask myself if this seller is VAT registered, and will they ever be able to send a VAT invoice without me asking for it 4 times, then alculate back to net price.

 

[silvermusic]

If you are talking website customers you are bang on, less so when speaking about eBay, and a small percentage of Amazon customers too. We tend to find the savvy ones are those that come to our site, and eBay customers (whilst still caring about price) are increasingly more attracted to the simplicity with a "it's easy, I don't need loads of store accounts" attitude.

There seems to be some weird perception on this forum by some people that eBay buyers are somehow inferior, less intelligent, etc. than those that buy from either Amazon or a stand alone e-commerce site. I hate to be the one to burst the bubble but eBay buyers are amongst the most savvy , on the ball shoppers out there.

 

[Dandan2]

So after reading this thread I am still no clearer whether it's better to offer free shipping or not. Should we set up a poll?

 

[JPMiddleton]

There seems to be some weird perception on this forum by some people that eBay buyers are somehow inferior, less intelligent, etc. than those that buy from either Amazon or a stand alone e-commerce site. I hate to be the one to burst the bubble but eBay buyers are amongst the most savvy , on the ball shoppers out there.

You're not bursting anyone's bubble, you are entitled to your opinion. Mine is based on our experiences with our customers.

 

[silvermusic]

There's no one overall method that's best, experiment and find what works best for you, your products and the types of buyers and sales you do. For example if you're selling expensive items where a single product purchase once in a blue moon to the same customer is the norm, then incorporating a few quid into the price and doing"free" delivery might work best. If your customers buy multiple small items maybe a single P&P price no matter how many they buy may be a better fit. Experiment and think about what you sell and how perhaps you could gain extra sales. You might also find experimenting with different speed options as well, within 3 days, next day, etc at a higher price.

It's though experimenting I found what my customers wanted and discovered what I'd previously assumed was wrong.