Free Shipping - Yes or No?
Do I have to offer free shipping? This question crosses the minds of many sellers when they create their listing on eBay or Amazon.
While there are many reasons to offer free shipping, there are some reasons why you should consider charging customers for shipping.
In this article, we will look at the pros and cons of free shipping. eBay sellers may find this article more useful. If you are an FBA seller, all Prime customers now receive free shipping.
1. Free shipping icon or accent
Free shipping is usually emphasized in some way. Browse these products on Amazon and eBay and you will see them.
Note that for both Amazon and eBay, the word free is underlined in some way so that it stands out. On Amazon, this is capitalized while eBay thickens the free shipping offer.
eBay Fast & Free
In the case of Amazon, the Prime logo adds value to the list, since Prime members know they can use their Prime subscription to get free shipping.
Sellers with a delivery charge may deviate from the main subscribers who think they should receive free shipping as they pay for a service that advertises it.
2. Simplifies the shopping process and price comparison
Sellers need to make the shopping process as easy as possible for the customers. This means reducing the work the customer has to do to buy a product.
In our example above it is clear what the amounts will be for customers on Amazon and eBay. Adding shipping fees makes shopping a little harder.
Sellers ask customers who are shopping for the price to do some mental arithmetic. This introduces at least one more step in the trade flow.
Therefore, this reduces the likelihood that customers will purchase the product if they need to do more work.
3. Free shipping filters
Many online retailers, including Amazon, give customers the ability to filter all sellers with shipping fees. If customers click on this, your ad or offer will disappear from the results, even if your combined cost and delivery are lower than other sellers.
4. More Views
As a result of offering free shipping on your products, you will get more views of your ad. Customers will not simply bypass your ad because of a shipping fee. Of course, some of these looks will turn into sales.
1. Lower profit if you incorrectly calculate shipping fees.
If you offer free shipping and don’t exactly combine shipping costs with the price of your product, you can earn very little, if any, from your sale. Sellers new to eBay make this mistake regularly: They offer free shipping or a fixed-price list price to drive sales. But they will not invoice shipping costs to customers nationwide or residents of Alaska or Hawaii.
When sellers go to buy postage, they will be surprised to see a higher than expected shipping fee. Some sellers may even lose money from the sale.
Canceling a transaction is not a good idea for new sellers, as it would affect their performance more than a high-volume seller.
2. Fewer views
As with the advantage above, you will get fewer views for your ad simply because customers will ignore your product or filter it completely.
3. It is difficult to calculate profit
Whether you sell domestically or abroad, you will not have a clear idea of how much you can expect to earn while the product is sold. This is because of how much you pay for shipping will vary greatly depending on where the customer is located. If you have an international client, you are likely to spend even more on shipping.
The bonus is that sellers located near you may be more likely to buy from you, as their shipping costs would be lower than buying from a seller nationwide.
Whether you should offer free shipping depends on your business situation. Many small businesses cannot afford generous delivery policies, as even a return of a few percents can quickly erode profits in the competitive daily landscape.
If you sell small and light items, free shipping makes sense because the cost of them can be accurately estimated. But for sellers of large products, free shipping can be a bad idea, as customers who are further away will significantly increase shipping costs.