Is free shipping a good idea?

Tue, Apr 20, 2010

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I had this discussion with my buddy David over at SEIBEI. I was thinking about raising my prices to include shipping, mostly so when retailers looked at my site they wouldn’t see that we are selling shirts for $20 and that we charge them more then 50% of the cost for wholesale. Here is what he told me.

“I’ve read studies that show that most people don’t think about shipping when ordering items online, that the subtotal is what really stands out in their mind. I think offering shirts with free shipping as a given is going to mess with the perception of the price of your line. For instance if someone offers free shipping on everything and build this cost into their shirts – everyone just sees a shirt for $27; they don’t do the math and realize that it’s really a shirt for like $22 or $23. DON’T OFFER FREE SHIPPING. Having shipping built into your price only heightens the hurdle between looking at a product and having it in your shopping cart.”

One thing I have done is do $5 shipping for US and Canada and that’s it. Order 1 shirt or order 20 it’s the same cost for shipping. This is a great incentive for people to order more stuff at a reduced cost. It’s $25 for the first shirt but you save $5 on each shirt after that because I don’t charge more for shipping. I upsell this at checkout, when customers are ready to pay there is a message telling them about this deal. I’ve gotten some orders over $100 which is really nice and not much more work then packaging 1 shirt.

threadsnotdead Is free shipping a good idea?

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Thanks,
Jon Kruse

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- who has written 135 posts on How to start a Clothing Company.

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  • Robbo

    Some people back off when they see that shipping is added to the total. I've had this problem before. I was thinking the same, to raise the price and include free shipping but now, NO free shipping! Flat shipping sounds better! Thanks Jon.

  • http://malgusto.info Jose Menor

    As a buyer I prefer flat rate shipping I usually try to combine several items and it seems to tme that I “save” money by dividing the shipping charges between items. BUT sometimes I think “I really want this I'll take a look at it later to see if there's anything more I can order too save on shipping” and I rarely come back. So I think each method has his advantages and disadvantages.

    I have opted for flat rate in my store though, I hope I don't loose too many impulse buyers

  • 'dami

    Thanks for the insight!

  • http://www.dancepartymassacre.com Alex

    Hey Jon, just wanted to clarify for my line. David's a friend so no harsh feelings, but he's mistaken. I didn't set a price on our stuff, and then add in S&H to the base. I just decided when buying online I'd like to give people an incentive, so I don't charge S&H (flat rate for outside U.S.).

    I've said you can view it as paying less for the shirt when looking at total price, but basically customers pay the same as if they bought it direct in a store. I like that continuity, and I can afford to lose a few bucks on S&H since people are buying direct.

  • jonkruse

    You aren't even advertising free shipping so the only people that will see it's an incentive will add the products to their cart and find out after that it's free shipping. There is no deal for ordering more shirts, just the same free shipping deal.

    I think it's important to get back your money spent on shipping costs. Most customers know they will have to pay some kind of shipping when they checkout you just need to make it reasonable.

  • jonkruse

    Also sorry for leaving your name in there.

  • Mark Foo

    Hi Jon,

    If I am using an order fulfillment service like Storenvy, how do I offer a flat shipping fee?

    Thanks!

    Cheers~

    Mark

  • jonkruse

    Not sure mark. You give up a lot when you have someone else do order fulfillment for you. You would have to talk to storenvy about it.

  • IHJ

    Ive turned down literally dozens of tees because of last minute shipping costs. You honestly think a customer is going to turn down free shipping, (considering the price isnt jacked up to $27)?

  • jonkruse

    Yes I honestly believe you will get more customers that will add a $20 product to their carts go to check out find out they have to pay $5, then if you priced your shirt at $25. It's not that a customer won't turn down free shipping it's that they won't want to buy a $25 shirt, but a $20 shirt with $5 shipping is another story.

  • http://www.nametagsexpress.com Dwayne McCaleb

    I have no problem paying shipping, but why do people have to be absurd with the prices. Ship it for what I could ship it for and we have a deal. Free shipping on large orders is great idea, I usually but things I don't need to get the shipping free.

  • http://twitter.com/jbenjamin82 John Southee

    I've contemplated the idea of free shipping. I've asked about it with other peers but I think Jon's explanation is the best I have heard. I will continue to offer the flat rate as well now. Thanks Jon.

  • http://www.hammyhavoc.com Hammy Havoc

    We've had great success with free shipping at Clikyz.

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