Free Shipping , Does It Really Get More Sales ?
If you have listed a product on Etsy you have probably been prompted to offer free shipping to help increase sales.
The problem is that free shipping isn’t free. Offering free delivery has costs for you, the seller.
People Really Care that Much About Free Shipping ?
Apparently yes. In fact, shipping costs are cited as the number one most common reason people leave stuff in their cart without completing the purchase. Some people blame this on Amazon Prime and the expectation of free shipping, but regardless — it is a real thing.
Pretending to Save People Money
You know how department stores put things on “sale” after they mark them up 400% to trick people into thinking they are saving money? That is a winning strategy that we can apply to “free shipping.”
As such, the easiest method to make it appear as though you, rather than the buyer, are covering the shipping charges is a price change.
If shipping costs you on average $10, then charge $10 more and offer “Free shipping.” I will say that, even though it seems a bit scummy to do stuff like that, you are at least being up front with the total cost - not stunning them with a big check out price once shipping is calculated.
Pro and Con Arguments for free shipping on Etsy:
Pro:
Customers Want it - and It Will Increase Sales (less abandoned carts)
Reducing the number of buttons the customer clicks also helps promote impulse purchases
Taking away even one potential objection from your customer's mind will make it easier for them to make a purchase from you.
It raises the value of your offering. Marketing a product's value, as opposed to only its features and benefits, is known as value marketing. The point is that you, as an Etsy seller, can apply these features to any product in order to increase its value. For example, if you sell a product and can boast that it is shipped for free, this is not only one less thing the customer has to pay for but also one more reason to buy from you rather than a competitor.
Con:
When you offer free shipping, you reduce your earnings.
Your price structure is the result of extensive work. It's not easy to determine the optimal selling price for an item on Etsy once you include in all of the expenses you'll incur. Also, the profits from selling off the leftovers are probably not very high.
Shipping to California is not the same cost as shipping across the street — you could get wrecked on the shipping costs if you aren’t strategic.
Strategy:
Use Data You Already Have:
If sell framed pictures. I can look at the average shipping cost in the US to ship one standard picture. It is important to look at the average cost, as shipping to Florida is not the same as shipping to California. However, If I sell less to California than I do to North Eastern States - simply because of the cultural difference and who prefers these types of pictures - the average based on my sales distribution should still even things out. If the average shipping cost is $15 - I will stay even over the year if I increase the product price by that much. I might eat a bit paying $20 shipping to California, but I’ll make it up with the $8 shipping to North Carolina. This is all hypothetical, I’m just trying to illustrate the use of an average shipping cost to you as the seller - based on data you already have.
Collect Data
If you are selling several similar items , you could consider running an “A and B” type experiment. List one with free shipping , but a slightly higher price and list the other with a lower price but no free shipping. Let it run for 30 days or so and compare.
Alternatively, you could run one product at an increased price with free shipping and compare that to a month of prior sales.
Consider This:
If you increase your total yearly sales by 25% - you may be able to buffer a slight loss in profit per item and still make more. Lets look at an example.
I sell bunny rabbit toys for $10. It costs me $2 to make them, so I profit $8 per bunny. Last year I sold 100 bunnies and cleared $800. In this scenario the customer is paying shipping.
Now I decide to offer free shipping. If costs on average $5 to ship the bunny. It still costs my $2 to make the bunny. Now I am only making $3 per bunny. BUT by offering free shipping I’ve increased my sales to 300 bunnies per year. 300 x 3 = 900 , so I have actually made more money. If I increased the price slightly to $11 or $12 per money I would have made even more.
To find the perfect balance you’ll have to try it — and tinker up and down to find a sweet spot. Remember the entire idea is making more money.
The nice thing is that Etsy takes care of a lot of this through its advanced features.
Etsy Features
A feature exclusive to Etsy allows sellers to provide free delivery to customers in the United States on certain items with a simple toggle of a switch - so that more expensive orders (those costing above $35 USD) receive free shipping.
When activated, the free shipping promise will be applied automatically to any new listings you produce, albeit it will not be offered to purchasers outside of the US or on all products.
The main purpose of this service is to facilitate the provision of free shipping on products that are appropriately priced.
However, how this will affect your Etsy search rankings is still up for debate. Some vendors claim that turning it on and off caused a significant drop in traffic and sales, while others claim that leaving it on had no effect. It seems from my research that offering this feature (which Etsy wants you to use) will boost your ranking.
Etsy makes it very easy to set this up and even calculates the price increase you need to make for you (based on closest sale, average, or furthest — you pick).
Etsy has a wizard that walks you through the process.
The wizard shows you that orders will qualify at $35.
The options are easily presented for you. You pick based on closest, average, or farthest buyer and Etsy automatically adjusts the price of your products for you.
Conclusion
Many buyers on Etsy will not purchase from you unless you provide free shipping - they are spiteful hateful people.
The expectation of free shipping has become commonplace in today's online retail market. Luckily, Etsy makes this process incredibly easy. In almost every case this seems like the right thing to do.
If you are interested in further streamlining your listing and tags - check out the listing magician chrome extension.
