How to offer Free Shipping


#24

Skip lunch today?
You’re aware most products just build shipping into the cost and then market their price with free shipping to attract buyers? There are dozens if not hundreds of studies that “free shipping” does, in fact, fool people into thinking they are getting a deal.


#25

Yeah, There’s a fool born every moment.

I’m looking at FREE SHIPPING from the perspective of the seller…

When your shoes are returned and you have to refund the customer, how do you recoup the outbound shipping costs if that’s incorporated into the list price?>

I guess it’s not a problem if you’re selling high-end goods, then you can scramble and recover some costs with the restocking fee. Otherwise, you can’t recover the shipping costs, and even if you could (partially or in full), you’re going to take a financial hit.

This is my 17th year doing online commerce. Seen a lot of free shippers come and go…


#26

Another responder suggested adjusting prices accordingly for the “free” shipping you wish to offer - which is definitely recommended for the reasons they already posted.

Most buyers on this platform are concerned with Speed of delivery and not so much whether they or we pay for it.

They understand free shipping is Baked In to pricing of those stores offering Free. It doesn’t matter much or have any influence to buyers these days, cuz they’ve got apps scanning lowest total price piggybacked onto amazon and the other sites they shop.

If you can get it to buyer at same rate of speed and efficiency as Amazon Prime order, they don’t much care if the invoice says $25 and free ship or $20 + $5 shipping.

Where this matters is to You, the Seller. As others have mentioned, when you start getting returns for discretionary reasons (not seller faulted), you will need to be able to recoup your original shipping, and the free return label amazon issued the buyer regardless of reason when you buyer opens the return request.

As far as how to adjust your shipping settings, i’ve been a pro store seller since day 1 and have not a clue how to adjust for free on the basic subscription. Should’ve been in the help section though?

Hopefully you’ve already got online selling experience on the bay or elsewhere. If not, we’ll probably be hearing from you again in a matter of days or weeks, as you will have more urgent matters to tend to than how to create free shipping templates.


#27

The Free Shipping Window at the Post Office is Hidden…

Only a few people know where it is and They AREN’T TALKING! :rofl::rage:


#28

I like the fact that when I order from Zappos, if it does not fit, there is no additional cost to me. Yes I know it is baked in, but it is the same argument as buying from a “seller who is honest and is charging for shipping, if the price differential is not too great”.

Additionally, ordering from a 3p seller is a crap shoot, so knowing up front I will not lose the initial shipping cost if I receive a piece of crap is assuring. If the seller charges me a restock fee for merchandise I return in new resellable condition then to me that is a scam.


#29

As are the rest of us, I imagine.

When your shoes are returned and you have to refund the customer, how do you recoup the outbound shipping costs if that’s incorporated into the list price?

Clothing and shoes are a unique situation, because people can’t try them on to know if they fit when ordering online. Because apparel sellers would expect a higher rate of return than others, they would build that into their selling strategy.

However, apparel aside, you can recoup your outbound shipping charges through a restocking fee. That leaves you, the seller, in the same position financially, as if you’d charged outbound shipping and refused to refund it on a return. Since this all comes down to what a buyer “perceives” what do you think is going to look worse to the buyer? Paying for shipping and not getting it back on a return? Or getting free shipping and paying a restocking fee on a return? The correct answer will vary for each person. There is no one “right” way, which is why so many people objected to your blanket statement that offering free shipping is always a bad business decision.

So, as far as returns go, a seller who charges shipping but withholds it on returns is in roughly the same position as a seller who offers free shipping and charges a restocking fee on returns.

But… as someone else mentioned, there have been studies that show that offering free shipping does lead to a higher conversion rate. So the proper business decision would be to ask yourself if the increase in sales you see by offering free shipping more than offsets any potential losses you’d take through returns? If the comparison leaves you coming out ahead, then free shipping is a good choice for you. If not, then it’s not. Here’s an article with lots of good points, it was written in 2015 but you can search yourself for more.

The (Many) Benefits of Offering Free Shipping
OCTOBER 1, 2015 • ARMANDO ROGGIO
Free shipping is a competitive necessity for some online retailers. While there are certainly costs associated with free shipping, there are also some reasons to feel good about offering it.

When companies like Amazon first introduced free shipping several years ago, it might not have made sense for every ecommerce merchant, particularly small ones, to follow suit. But with scale and growing customer expectations, free shipping has become both common and beneficial to some sellers.

  1. Free Shipping May Increase Sales, Revenue
    Free shipping is popular with your shoppers. This is so obvious, in fact, that you are unlikely to find any statistical data or survey results to support the claim directly. Researchers simply don’t bother asking shoppers if they would rather pay for something or get that same thing for free.

There is an important note here: Some shoppers will, in fact, pay for faster shipping when the situation demands it — perhaps a last minute gift. But otherwise, delivery times being equal, your customers would rather not pay to have an order shipped.

In 2014, Business Insider reported that for the first quarter of last year, 58 percent of U.S. ecommerce orders included free shipping. Thus the service seems popular.

What is popular with your customers may also be good for your business. There have been several, albeit anecdotal, reports of free shipping offers increasing sales conversions and revenue.

Last year, Stitch Labs found “that retailers who always offer free shipping can directly increase revenue by 10 percent.”
Brandon Eley, owner of 2 Big Feet, reported in 2012 that free shipping had boosted his site’s conversion rate 50 percent.

In a 2014 case study, Red Door Interactive said that a free shipping offer had increased ecommerce orders by some 90 percent.
In a survey from 2010, 93 percent of respondents said that free shipping encouraged them to buy more online.
Monetate released a case study in 2011, reporting a 48 percent increase in new customer acquisition with a select free shipping offer.

  1. Free Shipping Boosts Average Order Value
    A portion of the promised, free-shipping-induced boost in ecommerce revenue will come in the form of increased average order value.

When free shipping offers include a minimum purchase threshold — like $25, $50, or $75 — some shoppers will add items to their carts. In fact, a June 2015 study from comScore and UPS said that 52 percent of American shoppers have added items to their ecommerce shopping cart to qualify for free shipping.

Similarly, the aforementioned Red Door Interactive case study from 2014 reported a 7.32 percent increase in average order value when Red Door client, NuFACE, offered free shipping.

  1. You Can Control Free Shipping Costs
    Online retailers that sell commonly available products or even commodity products often compete on price, squeezing margins and “racing to the bottom.” Merchants in these sorts of price competitive situations can feel helpless, as some hapless competitor irrationally lowers prices. There is simply no way to control the price your competitor sets.

Free shipping costs, however, can to some extent be controlled. In fact, savvy online retailers can take actions that will significantly reduce shipping costs. Given this level of control, managing shipping expenses may even be a way to regain margin.

Here are a few examples.

Use fulfillment services. Merchants can warehouse popular items with fulfillment providers, potentially reducing the distance packages must be sent and thereby reducing the cost of those shipments, even when the fulfillment service fees are included.
Limit free shipping offers. While you certainly want to make a free shipping offer to all of your shoppers, that offer need not be the same. If your warehouse is in California, you might offer free shipping with no minimum purchase for intrastate orders. Shipments to neighboring states could have a relatively low minimum purchase requirement, while far away states could enjoy free shipping with a relatively higher minimum purchase.
Choose carriers and service levels. Try to discover the best combination of carrier and service level for each shipment. USPS Regional Rate boxes are good for nearby destinations, while ground shipping from FedEx or UPS may cost less for cross-country deliveries.
Minimize packaging. In the era of ubiquitous dimensional weight shipping fees, reducing package size can reduce shipping costs.

  1. Loyal Customers Love Free Shipping
    Although it is not clear that free shipping offers help retain customers, many marketers believe that there is a relationship between customer retention (or customer loyalty) and offering free shipping.

For example, the comScore and UPS study mentioned earlier found that 54 percent of shoppers are likely to take action when they receive a free shipping offer by email. This implies a couple of things.

First, it would seem that free shipping is a more compelling offer than a sale price since emails offering product discounts rarely have a 54 percent conversion rate.

Second, since consumers receiving emails presumably have a relationship with the online seller, one can assume a level of loyalty or at least familiarity.

  1. Free Shipping Problems May Be in Your Mind
    Many online sellers will argue that they do not need to offer free shipping or that free shipping is simply too expensive. They just cannot get over the idea of “wasting” money on shipping. But some of these perceived problems with free shipping offers may really be a result of the way we think about free shipping.

A few years ago, a Quora contributor named James Edwards wrote, “‘Free shipping’ in an online business is no different to ‘free entrance’ into a brick-and-mortar store. Just as a brick-and-mortar store incorporates the cost of sales assistants and store lease into their item price, so to can an online business incorporate the shipping cost into their product prices.”

Edwards’ argument is that free shipping is simply a cost of doing business. For example, few online retailers pass the cost of packing materials to customers. Nor do many businesses charge shoppers on a prorated basis for website hosting, payment card processing, or myriad other overhead expenses.

Similarly, many online sellers are very happy to offer shoppers 10-, 20-, or even 40-percent discounts on products in the form of sale prices and coupon code offers, only to be reluctant to offer free shipping. Ecommerce marketers will spend $5 per click on AdWords to get a shopper to the site, but won’t spend $5 on free shipping to double conversions.

The problem may be that one needs to think about free shipping offers like overhead or advertising, rather than a extra cost.

I guess it’s not a problem if you’re selling high-end goods, then you can scramble and recover some costs with the restocking fee. Otherwise, you can’t recover the shipping costs, and even if you could (partially or in full), you’re going to take a financial hit.

If you’ve been doing this 17 years, and still can’t figure out how to recoup your outbound shipping costs on the few returns you might get, you may need to go back and rethink some of your strategies. I’m not trying to be mean, but it’s hard to believe that you think an average seller can’t easily recoup these costs without winding up in a financial hole unless they’re selling really expensive stuff. That just isn’t true for the majority of us.


#30

Well, thanks for the lecture on Amazon’s talking-points vis-a-vis FREE SHIPPING. Which makes me think you’re a shill The Company.

Without conceding anything, let me add one extra objection to the FREE SHIPPING SCAM:

It encourages consumers to make impulsive purchases. Not only does this contribute to a dumbing-down of the populace, it isn’t good for the planet to have all these commodities bouncing back and forth and to and fro.

FREE SHIPPING = BIG CARBON FOOTPRINT.


#31

I’ve often wondered about this. What is better, 100 cars driving to the local mall, or 1 UPS truck driving down your street?


#32

Well, I don’t know, but we’re talking about a fleet of brown trucks, and USPS vans, DHL, Uber delivery…

According to several columns in the New York Times, Amazon’s priority, overnight, instant delivery options means there’s a lot of trucks, not even barely full of merchandise, gobbling up fossil fuels recklessly.

Word is, they’re clogging up the streets. Traffic is worse than ever.

So I guess that answers your question.


#33

Sometimes I do, if the difference in price between the same item is very large, but if there are two dealers offering something comparable with, let’s say, a dollar differential, I’ll go for the guy who charges for shipping rather than SCAM artist who’s a little too eager to sell something, and is probably going to do a shitty job of packing the book, and whose commodity is probably misdescribed. Then again, I might just sadistically order from the free scammer to return the goods in question, to spank him…


closed #34

This topic was automatically closed 180 days after the last reply. New replies are no longer allowed.