Will Offering Free Shipping Increase Sales on Ebay?
Free shipping is something Ebay has really pushed over the past couple of years to Ebay sellers. The real question is, do buyers want free shipping? The obvious answer, without even doing any research, is yes. Wouldn't you want free shipping? Sure, that sounds like a good idea, but how can you actually make money on the idea of offering something for free to customers without hurting your bottom line? That's what we'll be analzying here, and we'll see if it makes sense for sellers.
Ebay itself seems to be on a big push to encourage sellers to offer free shipping to customers, sometimes with promotions that may involve more prominent display in auction search results. As time goes on, how are you listing your items, with or without free shipping, and how has it worked out for you? Let us know in the comments at the bottom of this page.
The Pros and Cons of Free Shipping
On this page, we're going to direct all of this towards the seller on Ebay, not the buyer, just to be clear. Here are some pros and cons of offering free shipping to your customers:
- Could possibly increase Ebay sales
- Possible increased traffic
- Moving more inventory quickly
- Able to buy more inventory from the quick turnaround
- A competitive edge over those not offering free shipping
- Gained prominence in search engines and Ebay search for the term "free shipping" plus whatever item you are selling
- Higher feedback score by selling so many items, gained exposure in Ebay search, higher star ratings
- Paying for the shipping yourself
- Rolling the cost of the shipping into the item, raising the price of the item
- Possible decrease in traffic from higher prices
- Possible loss of profits from offering free shipping
- Advertising costs and time to promote the free shipping sales
- Customers come to expect free shipping
It looks like there are just as many pros for free shipping as there are cons, and that might be true, but there are some variable factors here to keep in mind.
- Buyers expect free shipping. It's become almost normal to have free shipping on many items, especially around the holidays.
- Ebay is giving higher priority in search results to items with free shipping.
Therefore, it isn't so cut and dry. Ebay is slightly forcing the hand, and so are buyers.
E-Commerce Solutions for Ebay and More
How to Make Free Shipping Profitable for You
Now that we've weighed out the pros and cons, those pros seem to be fairly enticing. Increased sales, traffic, and product turnaround, maybe even a higher conversion rate on the traffic you are getting? Those all sound pretty good. Now the hard part is making it profitable. Here are your options:
- You roll the cost of shipping into the item price. Your prices go up, but shipping goes down.
- You eat the shipping costs. Your profits go down, and your paying out of your own business expenses to pay for the shipping costs.
- You know somebody at the post office who will ship your items for free.
Of course, #3 isn't an option, so you really only have two options. Option #2 just doesn't sound good at all. Paying out of your own pocket? Really? No, that won't work. Option #1 sounds good, but won't buyers notice if you roll the shipping costs into the item price? Yes. So what's the solution?
Roll some of the shipping costs into the item price. You can roll in half, 25%, 75%, whatever will still make the item profitable for you and worth the time and effort. Essentially, you are cutting your profits when you offer shipping, but hopefully in exchange, turning over more quantity (or maybe trying to equal sales from when the economy went bust).
Will it work?
Experiment with offering free shipping on some of your inventory that you have stiff competition on. See if it works. If it doesn't, consider dropping the item, or if you can, lower the price as well (if it makes sense). If it's a success, move onto some of your other big ticket items. Before you know it, you could be the leading source for free shipping on certain items, especially if you optimize an entire page of your store for that sole purpose.
- How to List an Item on Ebay
Don't know where to start with Ebay? Start here, this guide will walk you through how to list an item.
- What matters most to consumers: free shipping, low prices, or coupons?
NorskeDiv on March 15, 2012:
I offer free local pickup, and free shipping on expensive, light, items. Otherwise it is a money loser, especially on auctions where it does not seem to increase the final sale price at all.
fanfreluche from France (but Canadian at heart) on January 27, 2012:
Occasionally, I offer free shipping on lightweight item (stamps, postcard) when I KNOW it will see high because it's rare. Otherwise, no. Most of my items goes to foreign countries so it's not worth it. As a buyer, it makes no difference to me if it's free shipping or not. the only thing that makes me back of from a seller is unreasonable shipping.
funpartycentraltexas on May 09, 2011:
"Free Shipping is a BIG FAT LIE & A JOKE."
I don't understand how anyone can think shipping is free. With the cost of fuel, rates are going up and up and up. Example: I have a UPS account, USPS is a joke if you want to ship anything over 1 lb and its not going to fit in a pre-determined sized flat rate box. USPS wanted 29.88 for a 5 lb box, where as my UPS rate was only 14.20.
As far as where im selling product... I have a 10,000+ item site as well as eBay with over 300 items. eBay has given me more problems with these few items in the issue of shipping then any I have ever sold in the years that my main site has been in operation.
Here is the deal, buyers see what it's going to cost before they purchase it, if it's too much...don't buy the darn thing! Then if you do, don't complain about shipping cost (which is what it cost me) as you agreed to make the purchase! Best part, all of my eBay items are discounted 50% off and then some, it's in plain sight how much customers are saving and yet they want more...forget that free shipping idea. Ill take my chances and hope to break even. eBay can't force me to "give away" my prodct.
sultana240 on April 22, 2011:
Free shipping is not free.... someone has to pay weither its the buyer or the seller.Id rather not use schemes or scams to increase business,being true to yourself and your customers is the only way.Its Ebays way of promoting their site to compete with the others,Free Shipping is a BIG FAT LIE & A JOKE
Daz on April 10, 2011:
Free shipping does work! What you have to think about are the different levels of buyers. Yes, there are different levels in regards to what they deem as acceptable, and this is free shipping for most. Its the single item buyers that tend to not like free shipping but multiple item buyers love free shipping which in turn pushes your profits up from the additional shipping costs you have already added to your item. Using eBay's fee structure to your advantage is the only way to make sure you are in profit.
How many massive websites offer free shipping and succeed? Most of them to be fair and they also rely on their multiple orders too as well as their general lower import costs etc...but it works! The benefits of free shipping are far more attractive than those that are not. You need to sit back and think of that extra bit of money that can be made on ebay. I for one am turning over a good 4K a month on free shipping listings and my items are in the lower priced end, this is sheer profit. I do not import either. It's easy when you know how to do it and who to focus this on. My customers love the fact that they can just get lots in one order and never pay postage, but yes, they are actually paying postage for every time. I sell shed loads of stuff and it was the best thing for me to do at the end of the day after numpty after numpty kept knocking me down on postage charges that were never over priced. So since the no rating permitted on free shipping items I still maintain my top rated position. It was postage that always got knocked down on ratings because buyers can be, sorry if this offends but they can be BRATS! and some are just spiteful so and so's.
Billy on January 09, 2011:
free shipping does help to sell many items, but isn't viable on many cheaper items. You have to do what makes sense for you, profit always comes first.
jerseys4kids.com from Vancouver / Bangkok on October 11, 2010:
Free shipping .. this is a joke.
It is simply designed to screw sellers out of more money.
New eBay policy regarding DSRs and selling limits is almost forcing sellers to offer free shipping. Funny I can not convince Canadapost to offer me free shipping? Usps .. do they offer free shipping?
kiwi91 (author) from USA on November 16, 2009:
I go into great detail about final value fees and listing fees on other pages. In my experiences, free shipping does help to sell many items, but isn't viable on many cheaper items. You have to do what makes sense for you, profit always comes first.
Mac on November 12, 2009:
Free shipping is a poor option. It does not increase sales in many items because you have to add on the costs to the item. On certain items this doesn't work, the seller can't afford to pay for the cost of shipping. And what you have failed to mention is the listing fee and final value fees. By inceasing the starting price and increasing your items final value you are paying more in fees!! Adding that on to paying the postage leaves in many cases zero profit so it becomes pointless to sell on ebay.
Ethel Smith from Kingston-Upon-Hull on June 16, 2009:
Will get around to Ebay one of these days. Well with from hubs such as this one :)
kiwi91 (author) from USA on June 16, 2009:
EagleKiwi- if you type in your zip code when heading to the ebay motors site, it will filter by your zip.
Brenda- Thanks for stopping by, this is really helpful to hear from someone that's using free shipping now and has had some success with it.
Treasures By Brenda on June 16, 2009:
Free shipping is working for me. My customers are loving it. Some of them are pretty savvy -- as long as the overall price isn't more than what they can get it for elsewhere, it works for them.
Free shipping is bumping my placement up & allowing me to actually put in a cost for Canadian shipping (free) even though I am in Canada and sell from ebay.com.
PLUS my shipping DSR often reaches 5. (Before, because of the increased cost of shipping from Canada to the US, it struggled to make the minimums for DSR discounts.)
Eaglekiwi from -Oceania on June 16, 2009:
hi good hub , ebay is overhwhelming to me , Im used to trademe ,and finding locations more easily. Any tips plse...ie..we wanted to check out used cars ,but only in our area (SC)...but I don't know how to set it ,so I just get those auctions?...