Offering Free Shipping on Ebay - Is it Worth It?
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
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Have you made a profit offering free shipping to Ebay buyers?
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?