E-Commerce · Food and beverage

Free vs. Paid Shipping?

Eddy Okun Growth, Marketing Manager

July 9th, 2016

http://www.nudebeehoney.comI know that conversions are higher on e-commerce sites if shipping is included in the pricing, the problem is that it raises the perceived cost of the product. Which would you prefer?
  1. $15/jar of honey with Free shipping
  2. $10/jar of honey with Flat shipping of $5
  3. $10/jar with variable shipping depending on location
Would love feedback as it pertains to our website: nudebeehoney.com

Thanks!

Adam Levenson CTO & Co-Founder at Digital Operative

July 9th, 2016

Most research and studies suggest that consumers want free shipping from a psychological point of view. But that doesn't mean you can't be as successful or more so otherwise. It looks like the site has free shipping over $20 now, which basically means you have to buy 2 items to get free shipping, driving up your AOV. That could be option #4.

What I prefer is irrelevant as I am not your consumer; I have no expectations on the cost of a jar of your honey. I would assume from the looks of the site (nice site BTW) its a premium product and so discounting is not ideal as it cheapens the brand.

So the answer is this: #5. Test it. Use optimizely or another tool or do an email campaign and see what converts and drives the most revenue. Let your customers decide based on their actions and have it be objective vs subjective.

David Evans Fractional CTO and Investor

July 9th, 2016

Test it and utilize the one that converts at a better rate. Historically, our customers converted higher with free shipping and we were able to pass on the costs. But each segment is unique. Split test it and see what yours respond to best. Maybe even consider a free, "slow" shipping option and a paid expedited option

Ellyn Ito Managing Director at Sigma Integrated Resources

July 9th, 2016

Having "free" in the offering is always a positive! Definitely the $15 with free shippinfg

Scott McGregor Advisor, co-founder, consultant and part time executive to Tech Start-ups. Based in Silicon Valley.

July 9th, 2016

i think that ONCE I am already on the http://www.nudebeehoney.com site, the psychology of the answer is clear. Free shipping is always best: I get a higher value ($15) jar and don’t have to pay shipping. The psychology of the other offers is that I get a lower value product plus I have to pay extra to get it to me. I might not like that and I might look elsewhere for a comparable priced product with free shipping, maybe even preferring an apparent higher priced product with free shipping (that is, your first offer).

Sidney Sclar SID the SECURITY PRO at sidthesecuritypro.com

July 9th, 2016

Great question. Obviously there is more than one correct answer.
 If you want to offer free shipping as a limited promo, go for it. Otherwise, first orders of a single item should have a shipping fee.
Reorders are a totally different issue to address now  not later.
It is your plan, your way. Good Luck.




Lauren Harriman Technology Law Blogger for Tech Talk Translated, CIPP/US

July 9th, 2016

It would depend on your return policy. I'm often willing to pay more if there are also free returns because then I know I can get my money back if I don't like the product, and the fact that the company is even offering free returns and free shipping leads me to believe that they are more confident in their product.

Paul Garcia President at TABLE

July 10th, 2016

One other tactic you may consider in shipping is making faster shipping a premium. So if you say standard shipping is free and put a 4-9 days delivery estimate on that option, and offer Priority Mail shipping for a kick of $5 (or whatever number) with a 1-3 day delivery estimate and include tracking, this may incentivize your customers to choose to pay for the premium shipping option and absorb more of your actual shipping costs, while being more satisfied with the delivery speed. I tested this myself with a consumer product line and had guessed that less than 10% of customers would pay extra for faster shipping, and instead found that closer to 35% of customers elected to pay for faster shipping, which reduced the company's expense burden by a large amount on shipping and also created happier customers (surveyed after delivery).

Craig Smith Cross-border Ecommerce Executive

July 9th, 2016

You could vary shipping offers depending on seasonality.  Given that you have just a few SKUS (13, yes?) and your basket size is not likely to be influenced by free shipping thresholds, perhaps you might consider a low flat fee for shipping across the board.  However, during the holiday gift-giving season, you might change your promo to "free shipping" for orders over $15 to incent the customers to increase their order.

Anonymous

July 9th, 2016

Entities like Amazon who offer free shipping balance their costs with other means such as membership. 
You could introduce membership and offer some perks including and not limited to free shipping. Some of these perks could be regular shipment of honey to the address so that customers don't have to manually order, members to be the first to try a new products, etc. 
If you need more help, feel free to contact me.

Michael Brill Technology startup exec focused on AI-driven products

July 9th, 2016

As everyone suggests, test whatever you can. Most research says including shipping at a higher product price tests better.

Having said that, I think you have to evaluate this in the context of what you actually want to sell. Are you really trying to sell single bottles of honey or multi-packs? Your question and the onsite merchandising makes it look like the focus is single bottles (your multi-packs are tiny images of generic kraft boxes - nowhere close to the branding of the individual bottles).

If indeed your goal is to upsell to multi-packs then that'd argue for incorporating shipping into the single bottle price as it makes the discount for multiple units that much more obvious.