I've tested using "Free Shipping" as a selling tool online and in most of my tests it has proved to draw more interest and more sales. When I say "free" I mean the shipping price is subsidized into the price of the product. This is what Amazon and lots of other retailers do a lot of the time...(although retailers like Amazon get insane deals on shipping charges due to their volume)

For example, I sell a $50 widget that costs $9 to ship for

free shipping = $59 with free shipping

or charge actual shipping = $50 + $9 shipping

or flat rate partially subsidized shipping = $55 + $4 shipping

What works for everyone else? What have you tested? This obviously may vary by industry etc.. Advice? Thoughts?

Offering free shipping is a great idea, unless you overprice the widgets you're trying to sell. Look at 50% of the items on eBay: buy a computer for only a penny, and shipping's only $300. Yeah, that's backwards, but the principle's the same when you sell one $50 item for only $59, "but you get free shipping." If your price is higher than average for an item, it should be *much* higher - as much as 50% higher. Then it'll probably sell better than the lower priced item!

For my clients, I look at their average order amounts, and the price on the item they want to push most. Let's say the average order is $26, and they have something they want to push that's $11. I'd set the Free Shipping threshold at $35. This offers the buyer two incentives at once: spend only $9 more and get free shipping and hey, here's something for only $11 I can add to the order. I'm saving much more than the $2 I'm going over $35.

Amazon and other retailers do this all the time. I just ordered books from the new Borders site, and I was literally 2 cents away from free shipping. I couldn't find anything else I wanted, so I dropped one of the books, bringing my order down to half what it had been. My bill was still $5 less than if I'd gotten free shipping on the two books, and a lot less than if I'd found a 3rd item to go along with it. That's why you need to set the limit based on avg orders and the price of a pushed item, instead of some arbitrary amount.

Good points.

I think very savvy shoppers look at the bottom-line price for things, or at least think they do. (they dont care about free shipping, just what the bottom-line price is)

But, I think many consumers like to feel like they are getting an extra good deal online, and adding "free shipping" makes them feel good. :)

Also, since so many big online retailers offer free (or very cheap) shipping, lots of consumers have this mindset that shipping online should either be free or very cheap. So if your actual shipping charges are pretty high, I think it is best to hide them a bit in the cost of your product(s).

Any other thoughts on this? :confused:

I used to offer low shipping charges to my customers.

I used 20% to 30% of my merchandise profit margin to
subsidize on my under cost shipping charge. It worked
okay on this strategy, but just that made less money.

When selling on ebay, which I have done alot I tend to find I get better results when I include "fair" shipping in the price of my item. So if I sell a video game for $22 including shipping it goes quicker than $18 +$4S&H.

People always let to feel like they are getting a bonus.

You know better your own expenses. From my point of view you should be very large business to promote free shipping. The expenses to deliver products aren't too low at all. So make sure it worths the money. Think of offering "free shipping" for returning customers.

i've done alot of free shipping lately on ebay... but like you said its subsidized somewhat.

free shipping is a great form of advertisement though... i know if i see an inflated shipping price i'm not likely to go any further to even look at certain things.

This depends in large part on your product and market. Trying out both is your best bet.

Not exactly shipping but I have experience in being the all inclusive product for a flat price, with our main competitor being a product thats slightly cheaper at face value, but then nickel and dimes you for extra features.

In other words, shipping included versus product + shipping costs.

And people seem to lean towards the product that appears slightly cheaper at first glance then adds fees later.

People want a bottom line price without going through hoops to calculate shipping, free shipping does attract more people. When i shop I want o know the complete cost if I have to navigate to get a shipping quote I usually look elsewhere.

I would agree with davef139 and others; many consumers want to see the near exact amount that they will be paying, rather than calculating shipping costs and other fees. Also since shipping is usually the biggest addition in cost, when you see anything with 'free shipping', its an eye catcher at most and will gain the upper hand in a sales.

I think it really depend on the product. You have to test each product individually with different pricing structure. For some product free shipping may work better but for others a lower rate + shipping fee(handling fee) may work better. Only testing can help us decipher consumers' activities...

As a consumer, free shipping is a huge perk for me.

You answered your own question when you said this:

I've tested using "Free Shipping" as a selling tool online and in most of my tests it has proved to draw more interest and more sales.

More sales is the name of the game and from what you said, your tests show free shipping is the way to go ;)

People want a bottom line price without going through hoops to calculate shipping, free shipping does attract more people. When i shop I want o know the complete cost if I have to navigate to get a shipping quote I usually look elsewhere.

this is a good point. having to calculate your shipping cost at checkout, for example, seems to lose customers. if they have to go partway through your checkout to know the true shipping cost that is not good. i think either offering free shipping, or offering flat-rate or at least very easy to understand shipping rates is important. don't want to lose customers just because they dont know what the bottomline price of your products are (with shipping)

You answered your own question when you said this:

I've tested using "Free Shipping" as a selling tool online and in most of my tests it has proved to draw more interest and more sales.

More sales is the name of the game and from what you said, your tests show free shipping is the way to go ;)

yes, i know what works for me. (i hope) ;) i started this thread to find out what works for other people...so i can get ideas, compare best practices, etc.. :)