Pricing Advice: Higher Price + Free Shipping or Lower Price + Shipping


#1

I am hoping to get some pricing psychology feedback from experienced sellers. Generally, is it more effective to have a higher price and free shipping ($17.99 + free shipping) or a lower price plus shipping ($12.99 + $5.00 shipping)? These are my MF products, so we’re not talking about Prime eligible.

I’ve been getting sales with the low price + shipping option, but I wonder if buyers like to feel that they are getting shipping for free.

Thanks in advance for your thoughts.


#2

i shop fpr my pets online and always choose higher + free shipping. the other way around feels like a “dupe” when you check the lowest price only to find out shipping makes it much higher. doesn’t seem as good deal. llben uses that business model & I love it.–just my opinion.


#3

I’m by no means a big seller - but I do enough volume (60,000 orders shipped in the past 24 months) to know: Free Shipping does not work for me.

Why? The buyer is too smart. Its total price - and in a manner of speaking, free shipping can hurt you because you’ll get more 1 item sales (possibly multiple from the same customer) AND on a buyer’s remorse return you’ll be eating that free shipping (because you’ve no longer made a sale).

Figure out how to get your customer the LOWEST total price - ship as efficiently as possible and provide excellent customer service: that’s how to increase sales.


#4

Ditto. Well, without the 60,000 orders. But despite what almost everyone seems to say, I don’t think free shipping matters that much to people.

> Why? The buyer is too smart.
Boy, I’m not sure I get that impression often. Ha ha.

I just don’t think people do basic math. Maybe they’re bad at it, maybe they’re lazy, maybe they just can’t be bothered. I don’t think people do much beyond thinking or analyzing beyond accepting whichever offer is presented to them as “best” (ie the Buy Box, usually)


#5

I have free shipping on some of my items. Big reason is that the manufacture has a MAP price in place. So by giving “free” shipping when the item is light and can be sent via First Class, I gain an edge over my competitors. Even the FBA ones. I know FBA fee’s and on small light inexpensive items (less than about $20), FBA fee’s kill them.

For heavier items that require Priority Mail, this strategy doesnt work as well.

And yes, it is possible for a MF seller to get the buy box over an FBA seller. Do it every day.


#6

I do not know first hand since I do FBA. However, I read study done by Mintel and, apparently, people prefer a higher priced item with free shipping vs.lower priced and shipping fee. Department store websites were used in studies.


#7

I prefer to price the items correctly and charge the right amount for shipping.

Buyers dont like paying $5.00 for shipping when it is a 1oz item that is going to ship first class for 1.93
They also dont like paying 18.00 for an item that has free shipping knowing all along that its not free at all.


#8

My opinion is that if you offer free shipping on Amazon you are at a disadvantage.

For some reason, we have found that Amazon customers prefer to pay $15 + $3.99 shipping rather than $18.99 with free shipping. We’ve tried it both ways and that is what works for us. Your results may vary.

There is another point also that is related to this, but is not exactly what you are asking.

Amazon gives free shipping on order of $35 and over.

If there is an Amazon or FBA item for $20 and Amazon sells it then the buyer is going to be charged $5.45 shipping for a total of $25.45 if they don’t have the minimum amount for the free shipping order.

If you sell an item for $20 plus $3.99 shipping then your price is lower than Amazons FBA price.

The moral to the story is that shipping is never free. Someone always gets the bill.


#9

It depends on the item.
If you are the only seller, then the buyer may feel like they are getting more “value” by having a higher price, free shipping items.

But if there are other sellers offering at near the same net price as you, then there is no difference.


#10

That makes total sense from a psychology standpoint. When you pay for an item you actually get something to show for the money. Shipping, though it gets the item to you, is not tangible. Consumers may feel paying more for something implies that it is better than something that costs less. Raising the price and lowering shipping supports both the idea of a better investment (none of the cost went to intangible services) and a more valuable, and thus more desirable purchase to show for it.

I am a really small seller and about half of my inventory is easily shipped in a large envelope and the other half is books. At first, I had problems with people being unhappy about paying 4.99 for shipping when the actual cost was a first-class stamp. Making my shipping free has eliminated these complaints. I have seen increasing sales, but most of that is probably the result of other factors, although I am sure that free shipping did not hurt. Changes in Amazon’s tracking requirements have me looking at other models though.


#11

Here is my take as a buyer - Amazon lists items by price + shipping. So I start at the top and find the cheapest price plus shipping. No math involved.

Regardless, there are other things I look for than price - especially condition, seller rating, and distance it will have to be shipped.


#12

what about this?..i have a clothing/accessory brand registry item i’d like to get cleared out and sold with no plans to replenish. i have about 300 in fba inventory. price now is $19.95 (lowered from $23.95) couple days ago. in general is it better to run as a sale price of $19.95 (showing 23.95 with line thru it) or rather the way i have currently, simply lower the price?


#13

The turn off for me is when I see a lower price with an exorbitant shipping fee.

I prefer to purchase from sellers who make both appear within reason.

That low low price / super high shipping does not fool people.


#14

I switched over to higher price with free shipping nearly three weeks ago.
It is to early to see any data but so far…

The people who purchase with free shipping seem to be a larger problem. They more often think the free shipping comes with two day shipping.

There are less multiple sales. People generally only purchase one item. Our multi unit sales are down.

Those few sellers who have purchased multiple items are paying much more than when I combined shipping, so the profit on those few orders is much better.

The number of sales hasn’t seen any major differences. We are still averaging the same number of sales.

The average cost per package has gone up since a few people are paying more when they purchase multi units.

We are making more money as the extra profit from multi sales comes with a low cost. Postage still costs the same, but the buyer is paying more. I don’t have to purchase merchandise to in order to see an increase to the bottom line.

More pending orders. Maybe people who think shipping is actual “free” are not that good with math or money and might be over their credit limit. Maybe it has nothing to do with free shipping model and just something I’m now paying more attention to.

Overall our profits are higher but buyers might need a little more handholding. To early to know if this will result in more refunds.


#15

So the next great marketplace: A total price marketplace.

No free shipping… No shipping fee… Just a total price for the item.

I want to shop there! A simple structure. No one lying to me about free shipping that isn’t free (because there is no such thing as free shipping - ever). No one annoying me with a really low price only to checkout and find a ridiculous shipping fee. No bogus “annual fee” to get not free “free” shipping. Just a simple marketplace where products and prices are easily compared.


#16

Nobody has commented on the business aspects yet.

With a discretionary return you are allowed to withhold outgoing shipping. Not what you paid but what Amazon charged the customer.

If you get a lot of discretionary returns you will lose in outgoing shipping as you can only refund the $0 that Amazon charged for you.

This is the main reason we charge shipping and do not give free shipping except on large orders (with a large profit margin).

Free shipping helps with impulse purchases but not necessarily with items people research well.


#17

Higher price and free shipping that adds up to the best combined price.


#18

You shouldn’t be shipping using stamps or labels with price on them. Buyers should never be made aware as to how much you actually paid for postage/shipping.


#19

> Shanti wrote:
> So the next great marketplace: A total price marketplace.
>
> No free shipping… No shipping fee… Just a total price for the item.
>

If there is no shipping fee, how is this different from free shipping?


closed #20