Forum Moderators: buckworks
Two things have changed that are making me rethink my stance on free shipping:
1. everyone in my segment has started to offer it
2. my shipping expenses have increased by 50% because of higher fuel costs
So now I'm thinking that by charging a flat (say $6) shipping fee, then extracting shipping costs from my pricing, I have a chance to significantly undercut the advertised (pre-shipping) prices of my competition. This strategegy would not have worked back when shipping costs were nominal and easy to bury in the product price, but now that shipping expense is significant, it has a big impact when extracted from the product price.
Any thoughts or experience with rolling back Free Shipping?
And, have you considered the public perception of suddenly charging for shipping? If these are one time buys it may not be so bad but if it's the type of product that earns repeat buyers, then I think the change could lose you customers pretty quickly.
If everyone else is charging shipping
It's really a question of perception. Let's say everyone offers a product price of $60 and free shipping. My question is, can I now get a leg-up by offering a product price of $54 and a very transparent $6 shipping fee? It's an open question; I wish I had a firm opinion on it, but I don't. What do you think?
We have all over our site that we have "FREE Freight" and even go so far as to describe other people's hidden charges and for them to keep their eyes open to this fact.
We're going to incorporate with our site re-design over the next few months something that says the same thing, but differently.
We will be positioning our products more on "Lowest Delivered Price" :o with the "Highest Delivered Value Proposition".
More details to follow...........
A flat fee like you mentioned sounds good, no-one likes to have to calculate prices. I'd be tempted to hype it a little - "Low fixed shipping cost of only $6.00 regardless of order size!" Turn it into a positive instead of a negative.
Having said all that, people love free stuff. Perhaps "Free shipping on orders over $80!" Gives you the word 'free' on the page, shows you know they care about shipping and even casts doubt on the competition. "The last site said free shipping... wonder if there was a catch? How much would I have to order? Here it's only $6.00.."
Ultimately though, the best method depends on your market. If a loyal bunch of repeat buyers, ask them. Do surveys, talk to people via live chat, email the blighters.
If traffic-generated sales, try some split testing. Charge shipping for a month and closely look at the visitor to sales ratio, watch the tracking paths through the site and see what effect it has.
No-one here can really say yes it will make you more money or no it will lose you sales. It's a straightforward issue that's easy to test and experiment though.
Alternatively look for some way of adding further value to the product to justify a higher cost, such as cross-selling with discounts, including a printed manual, future shopping coupons or something?
Either way I'd be tempted to include a note with every purchase "We reward repeat customers with free shipping, hope we can serve you again soon!"
Would take all the sting out of the cost and maybe get you more repeats? But like I say, depends on the demographics, products etc.
I'd say the quick easy solution would be try it just for one week, if no change try a month, and monitor closely.
I'm fairly new to all this stuff but I know this - traffic is expensive and awkward to get, so even a slight improvement in conversion rate is worth it. Likewise a dent in conversions is expensive. Putting it simply, if you could double your conversions you could double your marketing budget - but halve your conversions and you have less cash for marketing plus what you buy will be expensive compared to conversions.
"conversion is king", to twist an old phrase :o) Don't get them there then kick them out with shipping fees.
P.
i've got a competitor that uses two nearly identical, highly optizimed, ecommerce sites and offers some of the same products i do.
if you google the product name, their two sites pop up in froogle with identical prices that do not include shipping. mine was showing the free shipping price. even though our prices were roughly the same when you total the final costs, froogle was showing:
my-site.com $900
theirsite #1: $799
theirsite #2: $799
of course, this is above the organic results, in prime real estate.
in the end, i lowered the price, and charge shipping. on our own products, where the only competition is other sites selling our products, it's free shipping all the time - people love it.
We tried with or without shipping charges on eBay. When we used free shipping, our sales completely collapsed even though the overall price was the same.
The issue is that you are not even going to get a customer to visit if your price comes out higher than your competitors who do not offer free shipping.
For a first test, I might recommend retaining the free shipping for first-class/freight/cheapest shipping method, but increasing your prices for priority and overnight shipping. Individuals requesting expedited shipping probably need these items for a specific purpose and understand that additional fees will apply for a faster turnaround time.
If you're not able to ship via multiple methods, I say just go ahead and take the plunge. That's the beauty of the internet; while you may have some loyal/repeat customers, there are thousands more that have never entered your site before and will consider these rates the norm. When you're in ecommerce, you have a new audience every day to test.
We sell products in a competitive space, but have our own brand that cannot be purchased elsewhere on the web. Cost is only one factor in the purchase decision.
Your mileage will vary depending on your circumstances, but I always recommend you test different options before concluding anything.
i calculate the cost per pound of all of my products. if it is less than $1, it is awfully tough to offer free shipping - you would have to pad your margin on the product by so much that it would look ridiculous.
