Offering free shipping, then sell it in California

[jun-harte]

I try to offer free shipping as much as possible and most of my sales are not California leaving my shipping cost relatively fair with what I set my price at. 

How do you handle offering FS to  customers and keep the product at a reasonable selling rate knowing I've factored in at least some of the shipping cost and then get a infrequent sale to California that eats most of the profit?

I feel like I either need to factor in the shipping cost of California in all my sales,  "just in case" which is so unfair to my other customers or don't offer free shipping at all.

Any thoughts as to how you all handle this is greatly appreciated

[this*old*attic]

I take it you live near the opposite coast?

Free shipping is easiest for people in the middle of the country.

You aren’t going to like the answer:

Continue as usual. Free shipping is a business decision based on the belief that you’ll do more business or get other perks by offering it.

There is no way to protect against the occasional far-away sale. If it’s as  infrequent as you say, then you are micromanaging and sweating over individual sales.

According to the free shipping theory, you’ve made more money anyway and little surprises are already covered.

[divwido]

I also had to look and see where you are.   Can you not view shipping. in your case, as part of the deal, not good or bad based on location?  So you save a buck or two to North Carolina, fifty cents to New York, but then spend the extra to California?   

Honestly, I'm not really sure what your question is since you know the answers, but you have made me feel very unwelcome in your store.

[dbfolks166mt]

     Shipping is one giant crap shoot due to all the variety of options and varying costs. I generally avoid using free shipping for the exact reasons you listed. If I know for sure that regardless of where I ship a package ( am also on the east coast like you are) there is only one possible lowest rate option for shipping an item, then rather than factoring the shipping cost into the price and using free shipping I will use "flat same rate to all buyers" and put in the shipping cost. This lets the buyer know what they are paying for the item and what they are paying for shipping without them having to wonder about the two separate costs imbedded in the "free shipping". As an example if I am shipping an item that weighs 24 pounds and I can get the item into a medium or large flat rate box there are virtually no other less expensive ways to ship the item. The same applies with/to/for items you can get into padded or flat rate envelopes and it is amazing what you can squeeze into those. 

     I generally use "Calculated: based on buyer location" for my listings which more accurately presents the buyer with the actual shipping cost based on their location. On occasion after a sale I have found a cheaper way to ship the item without impacting the type of service and will refund the buyer for any excess shipping charges if they are significant. 

[a_c_green]

---

@jun-harte wrote:

Any thoughts as to how you all handle this is greatly appreciated

---

I offer free First Class Package shipping on all items whose packed shipping weight will be less than one pound, although I will offer Priority shipping for buyers who want to pay for a slightly quicker delivery. The item's listing price (for Fixed Price) or opening price (for auctions) is set to ensure at least a minimum profit on each.

Items of one pound or more go by Priority mail, buyer pays. I use Calculated shipping on all listings to ensure that prospective buyers will see only the charge necessary to get it to their own location.

All International items are either First Class Package or Priority depending on value (i.e. how hard it will be to replace vs. refund if Something Bad happens along the way), and buyer pays.

[ceylon-trademarket]

Thanks

[jayjaspersgarage]

Deciding on a shipping 'program' is a tricky wick for us coastal sellers.  I swear if I could move to Kansas I would to be more centralized.

99% of what I sell falls into the under a pound group with most of it under 4oz.  That simplified my decision when the USPS switched to the current rate program that combines weight and distance.  I decided to cover my longest shipping distance with a break even cost to the customer for up to 4 ounces including Hawaii and Alaska.  My local customers are now the ones paying for my shipping supplies and get occasional bonus items as a result.

For larger items I use flat rate boxes with little or no profit built in so distance doesn't matter for those items.

"Free" shipping is a mind game.  Smart shoppers search results for lowest price plus shipping so the total cost shows in ascending order in the results.  That's how I shop before considering driving to buy something.  I calculate the cost of a trip against just clicking and ordering.  It's no wonder why I own so much Amazon and Ebay stock.

[stainlessenginecovers]

and Nevada and Washington and Oregon and Arizona and Idaho and Montana and Utah and New Mexico

Zone 7 & 8 from North Carolina is more than just 1 state (and zone 7 is a miniscule dollar amount from zone 8

Either way, it's all about what you are selling and what is the competition doing. If you have 1-of items; doesn't matter; you can sell with calculated shipping and buyers have nothing much to compare to. 

[bashort]

The way that I do it is I quit doing free shipping except for some select items that go first class and priority padded envelopes.

Two big advantages are that 1. items that are priced with calculated shipping will end up being lower priced for buyers in local zones than what they would be after you roll in a average "free shipping" cost into the listing and  2. with unstable shipping costs you do not have to worry about readjusting prices.

There are those buyers that like "free shipping" so much that they do not mind paying more to get it but most people shop "lowest price + shipping"

[7606dennis]

It would seem that your options are to:

1)  Discontinue offering free shipping.

2)  Increase your prices to cover the increased cost of shipping to the farther locations.

3)  Continue to offer free shipping without raising your prices and absorb the higher cost of the occasional buyer from the West Coast.

Personally, if you don't get that many buyers from the west coast, I'd probably recommend the third option. 

[randysauto01]

Free shipping is a real crap shoot for us, the price of sending an engine from us in Washington state to anywhere varies greatly. But for us, and selling used parts it boils down to, do we want to sell it and lose some money on shipping, or let it sit on the shelf for 5 years hoping someone walks in and needs it.

We used to not offer free flat rate shipping, and that lead to sometimes 40-50 messages a day with people wanting to know what the total would be with shipping, and then running a quote, and not get a sale after its all said and done.

It took a lot of time away from being able to actively list new inventory. So its a bit of a wash in the end for us. We get items sold and moved, creates capital to purchase more vehicles.

[katzrul15]

@jun-harte 

You are offering FREE shipping on heavy jigsaw puzzles.  Has to be a killer to any profit.  Offer free shipping on lighter weight items and calculated shipping on heavier ones.

[iart]

Easy solution.

Move to California!

[slippinjimmy]

---

@jun-harte wrote:

I try to offer free shipping as much as possible and most of my sales are not California leaving my shipping cost relatively fair with what I set my price at. 

How do you handle offering FS to  customers and keep the product at a reasonable selling rate knowing I've factored in at least some of the shipping cost and then get a infrequent sale to California that eats most of the profit?

I feel like I either need to factor in the shipping cost of California in all my sales,  "just in case" which is so unfair to my other customers or don't offer free shipping at all.

Any thoughts as to how you all handle this is greatly appreciated

---

I handle it by not zeroing in on a single transaction! You need to look at the overall picture over a period of weeks or months (depending on volume).

If I was considering doing Free Shipping and I was selling something that is price sensitive (competition);

1 - calculate the shipping cost for close and distant zones

2 - think about the historic distribution of buyers, scattered everywhere, more in "close" zones or "distant zones

3 - pick a predicted average cost

4 - add #3 to the item price

To monitor if you have done it right on a monthly (or longer) basis, add up the amount you spent on shipping for those FS items and compare to your predicted amount. Hopefully you will have taken in a bit more than you paid out. You might even be happy with a modest loss on shipping if you feel it makes you more competitive and you have room in your margins.

I don't use Free Shipping but I do use Flat Rate for all First Class, the process above applies to that just the same. In the olden times when First Class Packages were not zoned it was easy, now it takes a tiny bit of effort to figure out the sweet spot that will cover zoned costs over time.

[lonebuck-books]

Simple, don't offer free shipping unless you are in the middle of the country where you shipping distances are fairly even.  Free shipping always penalizes close in buyers to subsidize far away customers.  For me that is a non-starter.  I use calculated shipping on pretty much everything with flat rate on lightweight 1st class items.  That way people who live close to me aren't paying a high price "just in case" they happen to be on the other side of the country.

In many cases, my close in buyer will pay less for my item plus shipping than they will for the same item sold with "free shipping" by another seller.  The far away buyers will pay the actual shipping cost if they really want my item.   I haven't seen any drop in sales since I broke away from the "free shipping" trap several years ago. 

Another benefit of charging for shipping is that if a buyer returns the item for any reason that isn't my fault, I can keep the outbound shipping charge.  With free shipping you can't do that.