To Ship Free or To Not?

[gilliankehler]

I've been selling my unwanted new and used goods (clothing, shoes, bags, jewelry etc) on eBay for about 5 years now. I recently switched all my listings to free shipping (worldwide) after reading extensive articles on how free shipping is a good idea. And I must say my listings have been receiving a lot more attention, and I've been making a lot more sales, since I switched. Whether that has to do with the free shipping, or some other factor such as increasing seller rank or more sought-after products, will remain undetermined, unfortunately!

But lately I've been contemplating going back to charging for shipping because of my extremely low profit margins. I don't expect to make pure profit due to the nature of what I'm selling, and the fact that this is more my hobby and not my official "job", but I get to keep literally 20-40% of my sales after shipping and ebay/Paypal fees. And when I get an unhappy buyer I have to refund, it puts me out BIG TIME. Some items I instantly lose money on because the buyer lives in a remote location and shipping just so happens to be astronomical to that little villa in the middle of nowhere, so as soon as I get to the post office I've already f-ed up the sale...  if the buyer is unhappy, I'm double f-ed!

My secondary concern with free shipping is that the buy-it-now price sometimes appears ludicrous when the shipping is factored in, and in comparison to other similar products, mine looks far more expensive when in fact it's cheaper due to no shipping charges.

Just wondering if I could get some input on whether a seller such as myself should be doing the free shipping thing? Or am I better off charging for it? What is working for you? I want to be as successful as I can be.

[ricarmic]

Regarding free shipping parcels, despite the fact I'm one of those stamp guys, each trip to the PO I normally have from 1 to 5 boxes up to the size of bankers boxes with me, all "free shipping" (to USA or Canada) purchases.

Everything I list is flat rate "standard shipping". (or stantard int'l shipping).

I sell on .COM so the free package price includes what I need to get on average for that box to a USA address.

My Canadian "free shipping" is also covered by the US amount, often more than covered however "stamp people" expect me to cover the taxes so the overage generally covers the taxes that I eat for my fellow countrymen.

I do charge extra shipping to foreign addresses enough to cover the additional shipping and a slice of the "cookie jar insurance" needed for international sales.

(Note that because I'm on .COM and I have free shipping domestically (to the US), I pay no FVFs on international shipping fees)

The aspect up in the air is whether or not the free shipping price is too much out of line with others.... including an averaged out flat rate shipping amount on its own should not do that if the base price was competitive.

[sylviebee]

The question whether to ship free or not depends entirely on the item being sold.

For rare and/or in demand items (with the exception of stamps, post cards etc.)  there is no point in using free shipping and it might even give the appearance of cheapening the item.

However, i do think it's important to ship to the US at a cost very close to what US sellers charge their own, and not CPO costs.

That said, I also think that if one wants to appeal to overseas buyers that moderate shipping costs will help sales.  Free is not necessary.

This is especially true now that so many US sellers are using the GSP.

Moderate shipping costs give a nice edge to overseas sales.

[pierrelebel]

"there is no point in using free shipping and it might even give the appearance of cheapening the item."

It seems that 63% of all sellers think differently as 63% of all eBay.com transactions (all categories) are sold on "free shipping" basis.  Do not take my word for it, check the information from eBay:

https://static.ebayinc.com/static/assets/Uploads/PressRoom/eBay-Factsheet-Q3-2015.pdf

The world of mail order through the internet has changed in the last few years and the trend towards "free shipping" is growing.  There is no point denying it or bucking the trend.  Successful online sellers are offering "free shipping".

[sylviebee]

I'm not about to argue with you Pierre.

You know your category, and trust me:  I know mine.

[ricarmic]

Hi Silvie!

For fun I took a look at other items that have sold that are similar to things you've sold (purses etc).

Generally yes everyone is selling with shipping added afterward (although most are auctions as opposed to buy it nows), however, I would see this as a potential opportunity!

Especially for your items priced over $200, including the "$12" to the price is negligible, and I would be of the strong belief that making it "free shipping" after adding $12 to the price would significantly increase its exposure because I really believe free shippings get placed above shipping added in searches and almost nobody is selling free shipping it seems in that category, so theoretically it should give you a good visibility boost! I can't imagine adding that wee amount into the final price would affect its competitiveness.

However as you know I'm a stamp guy not a purse selling guy so it is really just a thought.......

[pierrelebel]

Hi Ric

Following your suggestion, I did the same: search for purses but having the buyer use a US address:

http://www.ebay.ca/sch/192038-20s-Depression-/74964/i.html?_sop=16&rt=nc&_dmd=1

It is amazing how many sellers offer "free shipping" to American buyers but charge a shipping charge to Canadian buyers.

And I think that is what eBay's stats show as the information is based, as usual, on the American marketplace.

When doing searches, I often change my address to a US address to better understand the marketplace in the USA, our largest market.  To use a Canadian address may result in misleading results and conclusions.

[sylviebee · Accepted solution]

I can understand why Free Shipping works or many categories.  For my category "reasonable shipping" works better.

I've experimented on eBay with Free shipping and found that it didn't boost sales.

Placement in the search doesn't matter to me.     My buyers know how to search and control the parameters themselves, usually by selecting the Newly Listed option.

My items get views.

Of course I'm on top of completed items and understand my competition very very well.

I compete mainly with US sellers and so their shipping cost within the US is important to me.

When I look at sold items about 20% had free shipping within the States and that suggests it's a wash.

When I sell an item with free shipping it just means that I have to pay for 100% of the cost of shipping myself and so it's just a little less profit for me.

I can understand why it helps sell car parts etc..  That makes sense.   However, in my category and categories like mine there is no reason to think it boosts sales.

I also sell elsewhere other than eBay and Free Shipping is unusual.  My buyers do not expect free shipping.

Sequins initially asked the question.  IMO free shipping would help for some of her items but not for all.  She's got the right idea selling named items and many of those will sell themselves.  For others Free Shipping makes sense.

Just sayin' :  Using Free Shipping selectively makes sense for now.

That may change in time.

[musicyouneed · Accepted solution]

I agree it all depends on the category.  

One shoe doesn't fit all.  Try it one way then try it another.  As I said earlier, I am going to do both, so far I haven't noticed a big change, except I am now paying FVF on shipping

You need to figure out your bottom line including shipping and work from there.  If free shipping doesn't move the item, change it to charging shipping.  I think gone are the days that you just left a listing as is for ever.    

[ricarmic]

Pierre:  Ooops good point, I forgot I was on the Canadian site and using my address when I did the searches. 

Silvie: certainly also a good point, today that may be what makes sense but one never knows what will work better tomorrow. I usually have a couple experiments on the go, although determining what works/doesn't work is getting harder because everything seems to be unpredictable, so one wouldn't know if a burst in sales during an experiment is because of the experiment or because one would have had that burst anyways.....

[sylviebee]

Actually, I posted above that about 20% of the sold items in my category had free shipping within the States.

It's much much less than that and less than 10% of the sold items had free shipping within the States.

[ricarmic]

Hi Music! (Can you tell I'm procrastinating from book keeping stuff I should be doing!)

Regarding leaving things for a long time....

I checked and in the last 2 weeks I sold:

1item running since 2009
3 items running since 2012
2 items running since 2013

Why did they sell now? I don't know, but I like seeing the old stuff selling!

The weirdest part is that some of these items were on sale (for a couple months) up till the end of November. I postponed the sales resumption until January 1 when they will resume, so that makes it even weirder.

[pierrelebel]

"Regarding leaving things for a long time...."

Way back in 2000 I listed in my store a scarce Newfoundland stamp for $800 (fixed price)

Every year I would raise the price by $25 or so.  It eventually sold seven years later for $1,000.

The buyer was happy: he got a high quality scarce item at a fair price.

[musicyouneed]

Sometimes it's a matter of the right customer coming in at the right time. So often I hear, I have been looking for this for a long time and I am so happy you have it, mean while I have had it listed for 6 months. I say on average it takes a few months to sell something at least in my field. Mostly I am dealing with collectors of a certain band or genre.

[femmefan1946]

When I sell an item with free shipping it just means that I have to pay for 100% of the cost of shipping myself and so it's just a little less profit for me.

I don't understand.

Free Shipping doesn't mean not charging for shipping.

It means adding the cost of shipping to the asking price for the item.

Which is cheapest?

A $200 item with $12 shipping?

A $212 item with Free Shipping?

And now that we are out of the comfortable $10 item with $5 shipping I usually use in these discussions, would the item sell just as easily at $225 with Free Shipping?

Remember too that with the Free Shipping choice, you don't pay shipping FVF on your international S&H.

The FVF on selling price may be lower than of shipping FVF, depending on the category and other factors.

And as mentioned there is supposed to be a boost in Search placement.

I have been offering FreeShipping to both Canada and the USA (S&H $0.00) on most of my listings since I reopened last year and it seems to be working for me.

[sylviebee]

---

@femmefan1946 wrote:

When I sell an item with free shipping it just means that I have to pay for 100% of the cost of shipping myself and so it's just a little less profit for me.

I don't understand.

Free Shipping doesn't mean not charging for shipping.

It means adding the cost of shipping to the asking price for the item.

---

That reasoning works for items with standardized values and where buyers compare prices among several items before buying.

For some items I do just as you suggest:  Bump up the price a little and offer free shipping.

For most of my OOAK items asking $12 more or less rarely makes a difference to a buyer.

They'll buy the item either way and expect to pay shipping.

What does matter is that shipping is no higher than what buyers are expecting, and American buyers are expecting shipping costs to be similar to USPS costs.

That's why I say that Free shipping works for some items but for others reasonable shipping makes more sense.

I never even look at FVFs on shipping (or anything else really)  because to me that's of no importance.

[gilliankehler]

So after reading all the wonderful advice I received on this post, a couple days ago I switched from worldwide free shipping to just free shipping in Canada, charged for the most part a flat rate of 9.99 US shipping everywhere else, and I just made my first sale to a buyer in the US! She made an offer and I gladly accepted, knowing the shipping was totally paid for already and her offer was (after fees of course!) all for moi 🙂 Feels good. I sell maybe one or two things a week, not very often, so I'll take this as a good omen that I'm heading in the right direction with my listings.

Thanks for the advice all. I'm becoming quickly addicted to this forum!

[gilliankehler]

I think part of my issue was my prices were so low before, with the free shipping and all, buyers were probably skeptical of it being too good to be true and opted to pass, lol.

[reallynicestamps]

What does matter is that shipping is no higher than what buyers are expecting, and American buyers are expecting shipping costs to be similar to USPS costs.

"no higher than what buyers are expecting"

Exactly.

[treasure.hunter.d]

I have experimented with "Free Shipping" numerous times and have given it all the chance it could possibly need to have enough data to make a 100% correct evaluation for the type of items that I sell.

What I have discovered is that for Canadian sellers, who are using Canada Post or any other CDN courier companies, meaning really, not using the US Post through a service, the cost to ship any item over 500 grams in weight is to high to bury in the sale price of the item until you get into your more pricey items where the price is high enough to allow a large enough variance between sellers prices that the shipping price included can be glossed over as just that variance in pricing.

For example, a collectible Starbucks mug that sells for $25 US  and has a cost of roughly $13-$14 US to ship via Tracked Packet (over 500 grams there isn't sufficient difference between Tracked Packet and Small Packet Air price to bother) will sit there forever at $39.95 with FREE SHIPPING. The customer perception is that the selling price of $39.95 is excessive for that item regardless of the fact that the shipping is included in the price, it just doesn't seem to register.

I've experimented with this extensively and am 100% comfortable with the results being accurate.

Right now, with the exchange rate, the maximum charge for Tracked Packet is roughly $13 USD and then add in your costs for shipping materials and a $14.95 shipping price is entirely reasonable. However, the problem is that the item you are selling and shipping with the shipping cost of $14.95 can be purchased in the US for the same purchase price and "actual" free shipping" included in many cases. There is just no way to compete with that other than to cut your own throat a little at a time and slowly bleed out.

I have said this numerous times before and it's as true now as any of those times. because Canada Post has been left to run rampant, increasing shipping prices whenever they felt like it in what ever amounts they chose, they have destroyed the ability of many Canadian small businesses to remain competitive in the world market. Crying poor and then handing your CEO a $500k/year multi-year contract is not only despicable but given the circumstances it should be criminal.

Now, with the CDN govt having vetoed Canada Posts recent attempt to go for another letter-mail increase where do you think Canada Post is going to go to make up that difference? Yup they're going to increase parcel rates even more than already planned as the govt has no say over parcel rate increases.

In 2016 between the new changes Ebay is making for sellers and the sure to be monumental Canada Post increases, there are going to be many sellers who are done, just done, whether they like it or not, whether they want to admit to it or not. There is now a much more limited amount of items that can be sold profitably on Ebay and the blame for that is 100% on the negative impact on sellers that the many Changes Ebay has made have had and the outrageous increases that Canada Post has imposed.

Many sellers just do not have either the knowledge or the access to inventory to do an about face and start selling something else and honestly, in this case anyway, they shouldn't need to. Hard working sellers who are going to find themselves forced into closing up shop have done absolutely nothing to bring this on themselves. Ebay and Canada Post however seem to have been of the mind that they were going to do everything in their power to undermine those sellers' ability to be a viable and ongoing concern.

Thanks a lot Ebay and Canada Post. Talk about a classic case of "biting the hand that feeds" to achieve a short term gain while the long term results are waiting in the wings to bit you in the behind!

Cheers,

thD

[sylviebee]

treasure:  I think you've nailed it.

However, I would add to what you said.

You stated that Canadians can't sell certain heavier items and make a profit.  That's right on, but I would add that this isn't a new development.

The problem isn't only and maybe not even mainly a result of CPO costs.  Item prices for those border-line pieces have gradually dropped to the point where those items are sold only by sellers (including American sellers) who are willing to earn a few dollars/item.

Ten years ago eBay prices were higher.

The internet itself brought about the drop in prices because things that were once hard to get became readily available and thus no longer desirable to the collector.

Sellers who are going out of business for the reasons you suggested have had a lot of warning.

It's been a long time coming.