Forum Moderators: buckworks
I’m debating which method to pick for my website; if I should offer free standard shipping or not. Do you offer free standard shipping on your website? What do you guys think are the pros/cons of offering free standard shipping?
If I DO offer free standard shipping:
Pro:
- The customer might feel more enticed to buy; seeing the total final price they will have to pay if they pick the “free” shipping method.
- Advertising free shipping might generate more traffic to the website.
Con:
- My product prices will be higher because I have to build into the product price my shipping price.
- The shipping price I build into the price will have to be the same for all products no matter where the delivery destination is.
- Product prices will be set higher than competition because shipping rate is built into the price.
If I DON’T offer free standard shipping:
Pro:
- Product prices will be lower and will be able to match closer to the product prices of my competitors.
- I will be able to offer the based possible shipping rates to customers because they will be calculated based on location and weight of the order.
Con:
- I don’t know if by not offering “free” shipping customers won’t bother entering the checkout stages of the website to see what their shipping amount would be.
- Might generate less traffic to the website; since I’m not offering free shipping.
I’m leaning towards NOT offering free shipping; it looks like the better method when you look at the pros/cons, but I do like being able to advertise “free” shipping to customers…
I don’t know which method to use and would still entice customers? What do you guys recommend?
Thank you,
olimits7
(2) Average order size decreases
This seems very counterintuitive to me...then again, 'people' are always on the lookout to ruin the best laid plans.
I've not tried free shipping site-wide. I offer truly free shipping only on items where my margin easily covers shipping cost (i.e. gross margin = $500, shipping = $60, net (gross less freight in this simple example) = $440).
I think that:
(3) I make less money on that day, and swear I'll never try it again.is all in how you frame it... While I could say, according to my previous example, that I have lost $60 (12% of my gross), I prefer to think that I am making an extra $440 on the sale of a widget I may not have sold otherwise. Then again, my offers are based on selling high margin widgets out of season.
if the shipping charge is over a certain percentage of the price of the goods, the customer will abandon the cart and look elsewhere. What percentage is the deal breaker ?
For my own sites we charge 'actual cost' and play it big as a deal closer. All of our competitors in all of our niches pad shipping with handling charges or otherwise use shipping as a part of revenue. This is a very exploitable ethical issue that we look for when looking at new opportunities.
Shipping is never free; though customer ignorance of some of the things that go on is always an issue. It is charged (or more likely, charged +) in the cost of the product. We play it as an ethical issue and put it front and center.
Actual cost shipping becomes problematic on small dollar niches. I think that most in this situation go for overpricing the product, and then lowballing the shipping so that it doesn't look so bad. We've done pretty well with minimum orders and guaranteed actual cost shipping; explaining that this is a deliberate choice in the manner in which we conduct business.
Yes, we lose orders on the small dollar stuff where people don't want to make the minimum order. However, we hold the ethical high ground and we'll make that trade-off with our competitors every time. They can have the small stuff and scam the shipping. In the meantime we feel like we usually do a pretty good job at picking off and keeping bigger customers because we aren't picking their pockets at the same time.
We also lose some orders because charging an honest price appears to cost more, even though we are cheaper at the checkout. We are always tweaking language, links, and location of same, to make our case efficiently and clearly.
We've got a couple of small item, moderate cost widget lines that really lend themselves to the USPS Flat Rate boxes at $9.30 and play that up as strongly as we can. We tell the customer straight out that one widget is going to ship Flat Rate box to most states, that they can order as much or as little as they want, but that we can fit as many as eight widgets in the same box for the same shipping cost. It's a big credibility booster for us most of the time, especially since we like (love) markets where shipping schemes are rampant.
I think the 2nd one sounds good to me as a customer, especially when I have many more similar sites to compare.
However, you lose high value orders simply because you cannot avoid building costs into the price, and you costs are callibrated to a low order value
i.e you anticipate covering your shipping at £40 worth of product (say 5 units), so £40 included £5 shipping and £35 worth of product.
Say a competitor itemised his cart. He would sell 5 units at £35 + £5. He would sell 10 units at £70 + £5. Thus, you will drive some £30 orders up to £40, but lose a few £75 order.
Free Shipping and Free Tax
Woohoo! Things are getting tight. When you are dealing with MAP there are only two things left that you can use to promote a savings; Free Shipping and Free Tax.
So, my client says to me, "Let's do the Free Tax for everyone outside California." Okay I say. But wait, you smart arse! That's the way it is now. And of course he proved his point. The Free Tax is only appealing to those who are local, ha!
That's okay, that Free Tax won't last long. I can see the writing on the wall and we will soon have a flat rate Internet Tax. The Government needs to get money from somewhere and the Internet is one of the last things they don't have their fingers into. Well, I think we should prepare for some serious involvement from Uncle Sam in the next year or so.
Free Shipping, Free Tax* and No Handling Charges
That's the new tag line. :)
* Free tax applies to residents outside the State of California.
