Does Free Shipping Increase Conversion Rate?

Discussion in 'General Marketing' started by monet, Aug 30, 2008.

  1. #1
    This question is for anyone with a shopping cart and sells a product.

    Thanks in Advance.
     
    monet, Aug 30, 2008 IP
  2. steveb

    steveb Well-Known Member

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    #2
    The answer is pretty common sense - Yes. People like good deals and bargains on the internet, so if a customer can save a few bucks on shipping, it just may be the tipping point.
     
    steveb, Aug 30, 2008 IP
  3. globestar

    globestar Guest

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    #3
    As a consumer there would definitely be a higher chance of me buying something it there was free shipping
     
    globestar, Aug 30, 2008 IP
  4. YouTubeMarketing

    YouTubeMarketing Peon

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    #4
    People love the idea of only purchasing what is offered. Many times you see a great product for sell, but you don't see the shipping charges until you are ready to buy, which most of the times can sour a sell. So I would say Free shipping is a big plus!
     
    YouTubeMarketing, Aug 30, 2008 IP
  5. matdwyer

    matdwyer Peon

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    #5
    Here is my take on it...

    Option a - high price, free shipping
    The sale is automatically lost by the high price, and you won't even have the item added to your shopping cart, even though free shipping is the perk.

    Option b - low price, shipping $$
    This attracts people with a low price (i.e. wow! its $xx lower than store a!) and then it gets them into the buying process (i.e. adding to cart, etc). Shipping generally wont be more than $10-20 bucks, so depending on the item, it shouldn't be a humongous deal breaker once they have already began the process. Look at ebay for an example, item is $0.99, shipping $15 (this is to avoid fees I know, but still, same philosophy).

    I would say keep price as low as possible. Everyone knows shipping costs are on the internet, and expect to pay them. Point out that they are saving gas or something!
     
    matdwyer, Aug 30, 2008 IP
  6. choice

    choice Prominent Member

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    #6
    simple answers yes it does

    you offer free shipping your always at an advantage to your competitors
     
    choice, Aug 31, 2008 IP
  7. tyzer

    tyzer Well-Known Member

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    #7
    I'd have to say yes, but i guess most retailers will have to reclaim those lost postage charges in other places, and that usually means their products will have to have slightly higher prices, so that could in turn put people off.

    -- Phil
     
    tyzer, Aug 31, 2008 IP
  8. mmerlinn

    mmerlinn Prominent Member

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    #8
    I sell many products online, but probably will never use a shopping cart. Not because I don't want to, but because my type of products don't lend themselves to impulse buying and the availability of the listed products can be very sporadic.

    However, here is my take on free shipping.

    Free shipping on lightweight articles would definitely increase conversion rates with little or no loss to the seller.

    With heavy or bulky items, free shipping would make the cost way too high for nearby locations while locations further away would get a bargain. This is especially true if you are located on the East or West Coast of the U.S. instead of centrally located.

    I ship both heavy and bulky items and sometimes the cost differential can be $50 or more East Coast vs West Coast. If I offered free shipping, I would lose most sales within 1000 miles of me due to the high prices I would need to charge to subsidize sales on the other coast. Basically it would make me non-competitive in my backyard.

    I also ship lightweight items, but for me it does not make sense to have some free shipping and some not, so everyone pays actual shipping charges.
     
    mmerlinn, Aug 31, 2008 IP
  9. mentos

    mentos Prominent Member

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    #9
    Yes i can see an increase of 10% in sales when i offer free shipping
     
    mentos, Aug 31, 2008 IP
  10. Mike Seiler

    Mike Seiler Peon

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    #10
    I'd avoid using "Free Shipping" unless you're willing to refund the full price of the product if it's returned, which of course, would include whatever you paid to ship it. It's not free if you get charged for it at any point.

    Otherwise, it's better to word it as "Prices include shipping," or something similar.

    If you sell something for $10 that costs $4 to ship, even a typical 20% restocking fee would only get you half of your shipping costs back.

    Not so much of an issue if there's a clearly stated "Absolutely No Returns" policy... but those generally scare people off more than a few dollars for shipping would. ;)

    If you must go the "Free Shipping!" route, maybe go with the old asterisk & fine print disclaimer...

    Free Shipping!*
    * = Free shipping means that we do not charge you anything extra for shipping because it's already added into the price of the item. If you decide to return the item, the cost of shipping is not refundable and will be deducted from the refund.

    Everyone loves fine print! :D

    And don't forget to limit the shipping range in writing as well, unless you want to get stuck paying for international shipping.

    You're not going to win everyone over either way. There will always be those that want to see the lowest price, even if they shipping puts the price higher than the competition. Then, there are those that like to keep things simple and take comfort in knowing the price they see is the price they pay... no adding to a cart, entering a zip code, calculating shipping, etc...
     
    Mike Seiler, Aug 31, 2008 IP