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  1. #1
    ABW Ambassador Snib's Avatar
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    Free Shipping vs Lower Prices
    I was having a discussion with a friend about offering Free Shipping vs lower prices as a merchant. What is better as a promotional medium and why? This store will have fairly unique products that aren't readily available online, so I suggested he offer free shipping with slightly higher prices. What do you recommend?

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  2. #2
    Outsourced Program Manager Jorge - SHOPiMAR's Avatar
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    Free shipping.

    I think the consumer mind set is there already with so many others promoting it, that it is probably the first thing they will look for. With unique quality products like you say I think they will not look at the price too much but the shipping is a big factor if they want to try and order it, I think.

  3. #3
    Network Rep & ABW Ambassador Carolyn - ShareASale's Avatar
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    From Internet Retailer :

    The Forrester survey suggests shipping costs are a big issue for online consumers, with 61% of respondents saying they are more likely to shop with an e-retailer that offers free shipping. In response to a separate question, 49% agreed that “shipping prices often deter me from buying online.”

  4. #4
    Merchant & ABW Ambassador
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    It depends on the consumer too and whether it is a price sensitive product.

    I know that tech savvy consumers will scour the net and leave no stone unturned to find the best deal.

    To the avg consumer, free shipping will definitely catch a person's attention.

  5. #5
    Action Jackson - King of the World
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    Free Shipping.

    1. I think consumers always notice and are looking for anything that has the word free in it.

    2. Especially with large orders, free shipping can save a customer a ton of money.

  6. #6
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Quote Originally Posted by Snib
    I was having a discussion with a friend about offering Free Shipping vs lower prices as a merchant. What is better as a promotional medium and why? This store will have fairly unique products that aren't readily available online, so I suggested he offer free shipping with slightly higher prices. What do you recommend?

    - Scott
    I'm about to find out. I just opened a site with Free Shipping (it's not a bulbs site), and once enough ads have shown, I should have a good idea of how well that angle works, at least for those products. (I've had it on the 100-bulb bulk pack, but not enough people need *100* same-colored bulbs to get a statistically-relevant sample from that offering.)

    I do remember reading somewhere that Amazon got a decent spike in orders when they put in their "free shipping for orders over $25.00" policy, although it took them a while to make it profitable (due to initial miscalculations in pricing and expected number of users choosing it).

    This piqued my interest, but until recently I wasn't selling much that I could offer it on.

    Logistics is what keeps me charging shipping for most things. It costs a lot more to ship to far-off states and/or to ship big or heavy orders. Yet with Free Shipping, the price stays the same no matter what. There aren't many items that can accomodate all the possible variances without ending up either losing money, or pricing yourself out of the market. I assume places like Amazon can do it across so many product lines by getting some kind of "high-volume shipper" discount with UPS et al, but that doesn't help the little merchant.
    There is no knowledge that is not power. ~Hemingway

  7. #7
    Moderator leeann's Avatar
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    I vote for free shipping. If he has a good return policy and free shipping, most shoppers are going to figure they have nothing to lose - they won't be out anything if they don't like it. Pair it up w/ free return shipping and you'll really get a reaction. Zappos has high priced merchandise, but offers the free shipping and free returns. For holiday selling it's a good deal.
    leeann


    Shoppers determine what has value and they like coupons. Stop manipulating who set the cookie just because you do not like coupon and promotional sites.

  8. #8
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    Recently I was discussing with Golf merchant who experimented with 30% off prices (a saving of over $50 on average) and Free Shipping offers (a saving of about $7 as he charges flat rate shipping if not free)

    Surprise!

    More orders and better conversions came in with FREE SHIPPING promotion.

  9. #9
    Resident Genius and Staunch Capitalist Leader's Avatar
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    Zappos has high priced merchandise, but offers the free shipping and free returns.
    He might not want to deal with that 30% reversal rate

    I would assume that the objective is to get more REAL sales (that is, ones that stick), not just more business expense. Zappos' reversal rates say that they've taken it too far.
    There is no knowledge that is not power. ~Hemingway

  10. #10
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by redtagdeals
    Recently I was discussing with Golf merchant who experimented with 30% off prices (a saving of over $50 on average) and Free Shipping offers (a saving of about $7 as he charges flat rate shipping if not free)

    Surprise!

    More orders and better conversions came in with FREE SHIPPING promotion.
    This is worth repeating.

    Definitely FREE SHIPPING. It's by far the biggest motivator.
    Michael Coley
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  11. #11
    Affiliate Manager Alan Hamilton's Avatar
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    Where you are talking about a specific product line that is unique, I would suspect that there should not be much price comparison concern. If that is the case, I think you can make an even stronger case for the free shipping approach. Free shipping is a great closer and as an example of this, you can reference Zappos and other e-leaders who offer free shipping. Good luck with it Snib. :-)
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  12. #12
    ABW Ambassador newestuser's Avatar
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    another vote for free shipping...

    another option is reduced shipping + good prices

  13. #13
    Moderator leeann's Avatar
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    Quote Originally Posted by Leader
    He might not want to deal with that 30% reversal rate

    I would assume that the objective is to get more REAL sales (that is, ones that stick), not just more business expense. Zappos' reversal rates say that they've taken it too far.
    Shoes and plus size merchandise are always high in reversals, but you can still make money.
    leeann


    Shoppers determine what has value and they like coupons. Stop manipulating who set the cookie just because you do not like coupon and promotional sites.

  14. #14
    OPM and Moderator Chuck Hamrick's Avatar
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    There was a conversation about this earlier this year and Free Shipping won. That's why I created Free or Low Cost shipping links for NetShops.

    Especially on shopping comparison engines shoppers are not falling for a low price but a big shipping charge in small print.

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