Selling strategy as it regards shipping costs ("Free" or charge separately?)

[5-solas]

Greetings - as a relatively new seller, I'm hoping to gain some insight from those who are more experienced and have been doing this a long time.  My primary question is this:  what is everyone's recommended strategy as it relates to shipping costs - i.e. whether to charge separately for shipping, or whether to factor that into the price and advertise it as "Free shipping"?  Do you find that one works better than another or do you vary your listings depending on the particular item? 

As I'd imagine most if not all of us are also buyers as well, I always sort my own purchase searches using the "Price + shipping: lowest first" feature.  I will then usually end up purchasing those who come up with the lowest total cost - regardless of whether the item was advertised as "Free shipping" or not.  But I know some are attracted to the lowest overall price, and yet on the other hand some are attracted merely because the item was shown as having "Free shipping" - the prevalence of Amazon Prime shopping has conditioned many in that regard.

Another thing I've recently discovered is that many states don't charge sales tax for shipping costs, so listings that have shipping charges separated out would allow those buyers to pay less sales tax for their items.  That's definitely good to know, although because the bulk of my items are relatively low in cost (less than $40) I'm not sure that's as much of a factor in my case (though I could be wrong).
 
I'd love to hear from those on either side of the aisle as to which strategy you employ, as well as from those who use a combination of both.  Thanks in advance and hope y'all have a great weekend of sales!

[pkaszuba10]

I do both, depending on the item.  Honestly, there is not much of a difference in sales.  Most people search by lowest price overall and then go from there to find what item makes the most sense for the money.  Most of the time the buyers aren't thinking about the tax difference.  There are still a lot of people who refuse to pay for shipping and will go with the free shipping option even though it is added into the price.  They just absolutely hate the term shipping fee.  I get messages all of the time asking for free shipping (like that actually really exists.) Sometimes even if the price is higher with free shipping they will purchase that one even if it's not the lowest priced item of the search, because they feel like they are getting something extra for free.  I have a few stores and honestly there isn't that much of a difference (for me personally) regarding sales.  Regardless you have to include shipping fees somewhere. One time I had a very difficult buyer who told me they refused to pay shipping fees period.  This item was $34.99 + $4.99 shipping.  I thought I was being a smart*** and planned on just temporarily changing the price to $45 + Free Shipping and low & behold the same person bought it immediately and thanked me for the Free Shipping.  I was shocked and again was going to put it back to the way it was within the hour, but they purchased the item.  I know this doesn't help, but it just depends on the buyer.  I personally sort by lowest price including shipping and go from there.

[little*blackdog]

I've tried both ways and still do experiment occasionally with Free Shipping, but there never seems to be a big difference in sales with or without it.  So I regularly use USPS calculated shipping and some USPS flat rate shipping for items weighing under a pound. 

One thing I have noticed that I might warn you about, is when I do use both, I tend to forget which items are offering "free" and if/when I edit the price of items, even in a small group, if I don't recall which items have "free" shipping, I might lower the sale price of an item and therein cut myself out of any profit.  I've done that a few times, and it's aggravating.

[coastaltechsolution]

I have included shipping prices into the selling price of items before and offered "Free Shipping" but these were items usually under 4oz and shipped First Class. 

I rarely do that now and Like to keep selling price and shipping separate and let the potential buyer understand exactly what they are paying for. 

There is no best strategy here, just depends what will work for you  

[hammy57]

The decision whether to itemize shipping or not is complicated.

I did want to clarify that eBay charges sales tax on the total you collect, including shipping, whether the buyer's state taxes shipping or not. Not quite ethical in my opinion but that's what they do.

Also, remember that you pay a final value fee on the total amount of money you collect from the buyer, including the shipping fee. If you don't add in the Final Value Fee which you will pay, you will lose money on everything you ship. 

Expect to make mistakes, but learn from them. 

[maros9416]

Free shipping is king! It is not a lie or a gimmick, it is facilitator of an easy and smooth transaction. Your Disney pins and merch are similar to my bread & butter items ( 1st class bubble mailer type ), so I can give you a strategy that I implore you to try...Get an eBay store, make a category ' Disney Collectibles ', set all listings to free shipping & free returns, set up a tiered promotion of ' buy 2 any 2 items in this category and save 10%, buy 3 save 15%, buy 4 save 20% '. What you've done is created a place that encourages impulse buys, browsing your entire stock, and incentivize your buyers to make multiple purchases and defeated ' ripping off the customer ' with excess shipping charges. Make the buyers happy and constantly put up new stuff and you will build followers, which is the ultimate prize and necessity for a long & prosperous business on eBay. Not to mention the added benefits from playing nice with the algorithm +for free shipping +for store +promotion +for proof of sales +for free returns then +for TRS+ which you will achieve as the volume WILL pick up. Most advice is skewed as other sellers have their own personal gripes with the eBay system. My advice to you is to embrace their system as designed and utilize it for all it is worth. 

[maros9416]

In my experiences, more customers are unhappy with sellers ' ripping them off ' by charging shipping because when buyers make multiple purchases, it is obvious that they are due a refund for shipping amounts and the buyer either doesn't go back in the system and refund them the difference or it suddenly becomes a negotiable price. Another huge turn off is when the shipping cost is equal or close to the price of the item! It disheartens the buyer and devalues the item. An item that is $9.99 + $9.99 shipping is ridiculous to me. It is much more appealing for the same item to be set at $19.99 with free shipping. If the shipping cost exceeds the price of the item, then that's just crazy. Probably items not worth selling on eBay altogether.

[ra_201044]

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@hammy57 wrote:

The decision whether to itemize shipping or not is complicated.

I did want to clarify that eBay charges sales tax on the total you collect, including shipping, whether the buyer's state taxes shipping or not. Not quite ethical in my opinion but that's what they do.

Also, remember that you pay a final value fee on the total amount of money you collect from the buyer, including the shipping fee. If you don't add in the Final Value Fee which you will pay, you will lose money on everything you ship. 

Expect to make mistakes, but learn from them. 

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If shipping is a separate line item, and the destination state does NOT tax shipping, then ebay does not collect sales tax on the shipping amount.

[tdrake]

I ship a lot of different items, with lots of different sizes and weights.  Ten or Fifteen years ago, after years of shipping calculated - buyer pays, I flirted with "Free" shipping, mainly because eBay at the time was pushing it hard.

After a hundred or so sales I started going back to calculated for this one or that one and eventually I went back to calculated almost 100%.

Now and then I do "Free" shipping IF after a bit of research and a look at the competition for a particular item it makes sense. Rarely it does, for me anyways. 

A case in point, I recently sold a radio via Calculated shipping. I'm in NH and the buyer turned out to be in AZ.  The shipping to him turned out to be well above what I could have built into the price, if I had it would have surely scared off anyone east of the Mississippi.  And it happens all the time.   

Anyhow, 95% of my stull is "Plus Shipping on Top".  Works for me, YMMV.

[5-solas]

Thanks for all of the great replies thus far - sure appreciate the discussion and hearing everyone's thoughts!  And @johnrj1226  that is an excellent point that you brought up that I didn't think about previously (that any returns would have to be returned in full to include the shipping costs if you've rolled everything up to advertise as a "Free shipping" option).

But that brings up another question I had: 
How many of you with the "Top Rated Plus" designation have had to deal with a significant amount of returns?  Hopefully not too many?  I'm grateful to have recently earned the "Top Rated Seller" and "PowerSeller" designations, but looks like in order to get to that final "Top Rated Plus" designation, I'd have to agree to pay for return shipping.  But I'm a little skittish about doing so, and wasn't sure if that opens yourself up to having a lot of returns than when they buyer is responsible for shipping the item back.  Depending on the responses I may post this topic as a separate thread.

[a_c_green]

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@5-solas wrote:

But that brings up another question I had: 
How many of you with the "Top Rated Plus" designation have had to deal with a significant amount of returns?

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I can't remember the last time I ever had a return. However, I'm in a niche market, selling to collectors and using detailed descriptions in my listings. If I was selling used clothing or popular electronics (to cite a couple of examples at random), I'm sure my experience would be different.

[ra_201044]

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@maros9416 wrote:

In my experiences, more customers are unhappy with sellers ' ripping them off ' by charging shipping because when buyers make multiple purchases, it is obvious that they are due a refund for shipping amounts and the buyer either doesn't go back in the system and refund them the difference or it suddenly becomes a negotiable price. Another huge turn off is when the shipping cost is equal or close to the price of the item! It disheartens the buyer and devalues the item. An item that is $9.99 + $9.99 shipping is ridiculous to me. It is much more appealing for the same item to be set at $19.99 with free shipping. If the shipping cost exceeds the price of the item, then that's just crazy. Probably items not worth selling on eBay altogether.

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Shipping has NOTHING to do with the cost of an item. It has EVERYTHING to do with the size and weight of the item, and the distance it has to travel.

So if you needed a used gas tank for your car and saw one for for 20 bucks, you are basically saying that you wouldn't buy it because shipping would be much higher than the item price?

[maros9416]

  We are discussing the selling and marketing appeal of eBay items. An item that is $9.99 + $9.99 shipping is more discouraging to buy than something that is $19.99 w free shipping. Personally, I wouldn't consider a $20 sale to net $6.50 an ideal item to sell. I encounter this a lot with shampoo and health & beauty items. Much better to lot up 2 or 3 of them and have the exact same shipping price and net more, virtually paying northing for the shipping of the additional items. It takes a lot of savvy to offer free shipping.

  Buying something is different, if another seller wants to package and send me something, I'm not really thinking about his bottom line. I'm always so curious to see what box they send my packing supplies in, because I know the shipping has to be high, most sellers in that position have to skate the edges of what is passable to send, with flat rate envelopes bursting at the seams and almost always damaged from over-loading. Things I wouldn't dare try to send. 

[maros9416]

Don't let returns weight on your decision to advance your entire operation. First, the TRS+ 10% savings in FVF's will far exceed any additional returns than you already have. In fact, from what I read on here most who don't offer free returns have many buyer that abuse the ' item not as described ' buyer protections and will get the free return out of you anyway, only now causing you a defect as well. This is all implemented to complete with Amazon. Amazon did all of this at a time where eBay was full of pirates and played on eBay's weaknesses. Free shipping with 1 day handling and free returns makes buyers confident and happy. With no negative disclaimers in your listings, that basically say ' you're stuck with the item whether you like it or not '. If you utilize all 12 photos with a high megapixel camera, list any shelf wear or mars present, and always have 1 photo with a ruler for actual size scale, you will not have any more or less returns. This is all the cost of doing business. Don't let a nickel hold up a dollar!

[johnwhiplash]

Free shipping works much better for me. I add the shipping cost into the price of the item. When people buy multiple items, I usually come out ahead by shipping them together. I think most people would rather just see the total price rather than the price plus shipping. The only time I don't offer free shipping is when there would be a big price difference in shipping costs to different areas.

[bar.josep]

I was offering free shipping but when the new free return policy came into effect, I had to put a stop to abuse. Buyer would buy the item, use it and then return it. Very convenient to have and not to pay for. So I had to add shipping to the offer and so given the eBay free shipping mentality sales have plummeted but I do not tolerate abuse.