If you’ve shopped online, you’ve probably done it: You’ve added that one more thing to your cart to get free shipping. Or maybe you’ve ditched your order at checkout because you saw a shipping price that felt too high.
As customers, we’ve all experienced the allure of free shipping. And as a small business owner, tapping into this marketing incentive can also pay off. So far this year, many sellers who set up a US free shipping guarantee saw a 20% increase in sales, on average.*
Here, five sellers who ship items large and small share their tips for introducing free shipping, along with a variety of benefits they’ve experienced as a result.
Understanding customer psychology
Alicia Zwicewicz, a Toronto-based seller who launched her shop Beardbangs in 2014, makes cheerful handmade planters, mugs, and other ceramics painted with smiling cat and sun motifs. After taking a year-long maternity leave following the birth of her daughter, Alicia reopened her shop in September of 2018.
Alicia decided to use this next chapter of her business as an opportunity to revise her approach to shipping. Informed by her own experience as an online shopper, she started offering free shipping in North America, where the majority of her customers live. She also reduced shipping rates to the rest of the world by about $10.
While Alicia estimates she’s earning $1 or $2 less on some orders, she’s seeing a larger profit on orders of multiple items, so her profits are steady. “I get the whole psychological thing,” Alicia explains. “I’ve had conversations in the past, where people messaged me for a shipping estimate, and then I didn’t get the sale. I can’t really blame them. I would react the same way.”
Making cost-saving connections
Mikey Kendrick started his eco-conscious furniture brand Year of None back in 2016. “The free delivery concept is interesting for me,” says the Houston, Texas-based seller. “I ultimately decided to offer free shipping because my customers seem to react better to it. There’s something to be said for playing into buyer mentality.”
He’s taken a measured approach to offering free shipping throughout his shop, investigating ways to offset costs and strengthen his pricing model by negotiating directly with his shipping carriers. “For anyone who’s starting out selling and shipping big items online, I’d recommend starting an account with a carrier and forming a relationship with them,” says Mikey. “I found, surprisingly, there’s really no lower limit to how much volume you ship with them before they’ll consider you for a custom discount.” Hear more of his tips on shipping oversized items on the Etsy Success podcast.
Encouraging customers to spend
After earning a degree in industrial design, Lee Narkis, an artist in Tel Aviv, Israel, followed her passion for mixed materials and launched her own jewelry brand of the same name. Since opening her shop in 2017, she’s sold more than 115 orders of her chic earrings and necklaces that combine crochet with colorful metalwork.
In September, Lee started offering free shipping to customers who bought three or more items. “At first, I offered it for two items, but it wasn’t really profitable,” she says. By increasing the threshold to qualify for free shipping, she hoped to encourage customers to order more while ensuring the incentive was sustainable for her business. What she didn’t expect was such a large impact on her conversion rate.
Since the change, her conversion rate has tripled. During the holiday season, her shop received the same amount of traffic as the year prior—but had a 300 percent increase in sales. “Even though people aren’t visiting more, they are buying more,” Lee says. She’s confident that the appeal of free shipping is converting more browsers into buyers.
Removing the barriers to a sale
Mike Wilson and Megan Hanneman launched CatastrophiCreations in 2013 after Mike got the idea to create a “Indiana-Jones-style” bridge for their two cats, Heisenberg and Ickle. They’ve since sold more than 10,000 of their wall-mounted kitty complexes, replete with bridges, hammocks, and scratching posts. The couple also moved the business from their living room to a commercial space in Grand Rapids, Michigan (and adopted another cat, Bronson, who has become an Instagram celebrity).
In 2017, the couple adjusted their prices and started offering free shipping throughout the US after receiving feedback from customers about high shipping costs for their heavy items—and seeing that many of their competitors were shipping for free. “A lot of people these days aren’t used to paying for shipping,” says Megan. “Plus, it’s easier for customers with a budget. They know right away what the full cost of the item is.”
Since updating their prices to include their median shipping cost, the couple has noticed a huge difference in conversions. “We’ve seen a 50% year-over-year increase in our conversion rate since we started offering free shipping,” Megan says. “With buyers knowing upfront that they’ll qualify for free shipping, it eliminates any surprises when it’s time to check out.”
Testing new approaches
“As someone who loves shopping online, I always prefer ordering from a shop that offers free shipping,” says Tel Aviv-based designer Meital Lev. “For me, psychologically, I know the retailers must have added the shipping cost to the item, but still I prefer it.”
Meital has offered free shipping on all of her leather bags and accessories since opening her shop in 2013. “I’ve found it makes a huge difference in helping more shoppers finish their purchase,” she explains.
With experience as both an online shopper and retailer, Meital has witnessed firsthand the evolution of ecommerce. As a result, she makes a point of taking an iterative approach to growing her business. “On Etsy, you have to be open to trying something new, giving it time, and seeing how it changes your sales,” Meital says. “After that, decide if it was good for you or not. You can always change back." You can hear more about Meital’s approach to pricing with free shipping on the Etsy Success Podcast.
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*Based on an internal analysis of non-digital orders from July 2019. DISCLAIMER: It’s your responsibility to understand and follow the laws in your jurisdiction when determining and describing your shipping practices.
Words by Etsy Staff
