A few months ago, I published a post on this blog where in I explained in a detailed guide of how to ship your eBay and Amazon items. I received a lot of emails from the reader thanking for publishing the post and finding it a lot helpful.
I am so thankful to all those who read and appreciated that long and lengthy post. One of the most mentioned point and question I received in the feedback was the free shipping versus the paid shipping option on eBay.
I am all for offering free shipping for a number of reasons as explained in the detailed guide. However, to support my point and possibly answer all the questions posed in the emails, I decided to do my own case study regarding this topic.
Therefore, I conducted my own case study and here I am sharing the results with you guys. Though, it confirmed my stand in favor of free shipping, you may draw your own conclusions. It also paved the way for those of you who want to conduct their own much more detailed study.
Before I share the results, please let me clarify that I am not claiming it to be either a thorough or scientific detailed study. I do believe though that there was sufficient sample data to conduct the case study for solving the problem.
For the purpose of this study, I confined to my own listings on eBay, as I could not have access to other seller’s listings.
No of Listings: 4
Duration of the study: One month
Type of Listings: Buy It Now
The first item was listed with a price of 9.99 and $4.99 shipping
So, total cost = $9.99 + $4.99 = $14.98
The same item was listed with a price of $14.98 and free shipping
So, total cost = $14.98 + free shipping = $14.98
As I had to find out which listings did better, I kept all other variables the same. For instance, titles, photos, descriptions etc. were not changed.
As you may be aware that duplicate item listings is against eBay TOS, so I had to add different digits to end of the titles just to make the listing avoid any duplicate listings penalty. The digits had no meanings other than to make them appear different listings in eBay’s eyes.
Paid Shipping Listing (A)
Number of views = 4800
No of Sales = 44
Net Profit = 44*1.89 = 83.16
Conversion rate = 44/4800*100 = 0.92 %
Free Shipping Listing (B)
Number of views = 3300
No of sales = 57
Net Profit = 57*1.89 = $ 107
Conversion Rate = 57/3300*100 = 1.73 %
As you can see that apart from the page views, the free shipping listing is the winner. The conversion rate is just less than double of the paid shipping.
Why did the paid shipping receive more page views?
The most interesting part of the case study was the number of views of paid shipping listing. Surprisingly, it received 1500 more views than the free shipping listing! Here is the math.
Paid shipping listing views = 4800
Free shipping listing views = 3300
Difference = 1500
In my opinion, it could be that visitors click more on the item with lower price when they appear in eBay’s search results. By default, visitors ignore the shipping cost at this stage, as they are not making any purchases yet. As soon as they see an identical item listed with a lower buy now price, they click the listing. This probably causes more page views of paid shipping listing.
However, when visitors reach the landing page of the item, they read descriptions, see images, may read policies and process the information to make buying decisions. It is at this stage that they see the shipping cost, which may alter their decision.
People love “the Free Thing”. In reality, it is not free, as we have seen from this case study. It is all psychological. The buyer pays the shipping in both cases, yet more people pay it in the form price listing and free shipping rather than actually paying the stated shipping cost.
Free shipping is the real winner. You get more conversion. The buyer also does not care how much was the actual shipping cost. Whereas, in case of paid shipping, you can easily anger the customers if thy see you have overcharged them even by a few cents.
Once you list items with free shipping, you get better rankings in the search results. You automatically get a five star rating for shipping in DSR. Moreover, eBay awards you the Premium Service Badge on listings with free shipping.
As mentioned in the beginning of the post, this case study is not very detailed or may not be very scientific to draw 100% accurate conclusions. However, it provides enough information to confirm that Free Shipping listings converts better than the paid listings. It also confirms the reasons eBay encourages seller to offer shipping on their items.
If you have conducted your own study of a similar nature, please do feel free to share your finding with us.