Should I offer free shipping on Etsy? As an Etsy seller, I’m quite certain this question has crossed your mind.
Let’s keep in mind that it is not compulsory to offer free shipping on your Etsy shop. Although it may keep customers happy, it may not be financially practical for some businesses.
Nevertheless, there are a number of upsides to offering free shipping that you may want to consider before making the call.
This post covers the areas to consider before deciding if free shipping is for your Etsy shop. Let us start with the basics of how you can offer free shipping on Etsy.
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Should I Offer Free Shipping On Etsy
How is the shipping cost managed and who pays for shipping on Etsy? These days, ‘free shipping’ is becoming widely available on e-commerce platforms like Etsy.
In this section, let’s take a closer look at the pros and cons to offer free shipping on Etsy.
Pros Of Offering Free Shipping On Etsy
- It Makes Your Listing More Appealing To Customers
- It Boosts Your Search Ranking
- Simple Purchasing Journey
Cons Of Offering Free Shipping On Etsy
- Complex Pricing Process
- Cost of Returns
- Fluctuating Profit Margin
1. Pros Of Offering Free Shipping On Etsy
- It Makes Your Listing More Appealing To Customers
9 out of 10 shoppers say that ‘free shipping’ is their most highly prioritized incentive when shopping online.
I get it, as a consumer every time I make a purchase with free shipping I feel like I’m scoring a deal.
It comes as no surprise that consumers love fast, efficient, and free shipping. Unexpected shipping costs are one of the main reasons consumers abandon their carts.
According to an article by Forbes, 84% of consumers have bought something because shipping was free and 30% have purchased additional items to qualify for free shipping.
So by offering free shipping to your customers, it is likely that you’ll tap into a whole new market of consumers and drive sales.
- It Boosts Your Search Ranking
Since July 2019, Etsy’s search function prioritizes product listings that provide free shipping and Etsy shops that provide shipping guaranteed for orders more than $35.
Free shipping in this context is the standard shipping fee. Sellers can still charge for shipping upgrades such as express shipping without it compromising their search placement.
How it works is that products that offer free shipping will be highly ranked in a buyer’s search results in comparison to products that don’t offer free shipping.
When your listing offers free shipping, there’ll be a green badge highlighting the ‘free shipping’ feature right beside the price. This allows shoppers browsing through your shop to know which listings offer free shipping.
Additionally, when you provide free shipping, you will exclusively fall under the popular ‘Free Shipping’ filter. This filter cancels out shops and listings that do not provide free shipping.
This gives your listings more exposure compared to your competitors who do not provide free shipping.
- Simple Purchasing Journey
From a buyer’s viewpoint, free shipping is attractive as it is a straightforward pricing structure.
Buyers feel discouraged when faced with unexpected shipping fees once they’re on the checkout page. Maintaining the same cost from the listing page all the way to checkout increases the probability of a customer going through with a purchase.
As a seller, you should simplify the purchase journey for your customers as much as you can. One way to do this is to price your products to include all costs, including shipping costs.
That way when they see your product, they know the exact amount they will need to pay.
2. Cons Of Offering Free Shipping On Etsy
- Complex Product Pricing Process
You may be wondering how much to charge for shipping on Etsy when pricing your product? You need to ensure that you’re covering the costs and making a profit. Thus, it is only fitting to have a detailed breakdown of the costs involved.
This should include Etsy’s standard fees, costs of making the product, and shipping costs.
If you do not calculate the shipping costs accurately it may lead to losses in the long run. To make sure you don’t have any mishaps, check what the shipping costs are for all the states in the US. If you take orders from abroad, ensure to check international shipping costs.
- Cost of Returns
There will be customers that will want to return products after purchasing from you for various reasons. Some may want a refund as well on returning your product.
Offering free returns is a great way to increase customer trust. People are more likely to buy from you when they have the option of exchanging a product or getting a refund.
Although this probably will not happen often, it can be costly when it does. Hence why your product’s price should factor in the costs of providing free shipping on returns.
As a seller, you should also set clear return policies and create listings that are as accurate as possible.
- Fluctuating Profit Margin
Shipping cost is dependent on various factors such as weight, location, and package measurement. As shipping costs fluctuate for each sale, so will the profit. And it may be hard to establish which products are most profitable.
Shipping costs may also cost you your profit, depending on the type of products you sell. It might not make sense to cover shipping costs if the items you sell are very heavy for example.
In that case, if you charge shipping separately, the breakdown will be straightforward for you.
How To Offer Free Shipping On Etsy
How to set free shipping on Etsy? There are two key ways to go about offering free shipping to your customers on Etsy. Each method works differently but both ways ultimately boost search rankings.
1. Free Shipping By Each Listing
This method requires sellers to offer free shipping on a listing level. Sellers should price products accordingly when providing free shipping in this manner.
A great plus point with this method is that you can choose to provide free shipping for selected items only.
When you offer free shipping for a listing, calculate the average shipping cost per unit and include it in the overall price of the item.
To set up free shipping on a listing go to the ‘Shipping’ segment under the listing and select ‘enter custom shipping options’.
Under ‘shipping prices’ select I’ll enter fixed prices manually. Then proceed to fill out the ‘country of origin’, ‘origin postal code’, and ‘processing time’ fields.
In the ‘Standard Shipping’ segment, you set the countries that you will ship to, take note that domestic shipping is compulsory.
You have the option of setting the price for each country individually of to choose the ‘Everywhere Else’ option. This allows you to ship to anywhere in the world at a flat rate.
To ensure that you show up on international searches, fill out the shipping rates and shipping services that you are using for the countries you want to ship to. Lastly and most importantly, select ‘free shipping’ under the ‘What you’ll charge’ section.
Here’s how you take off free shipping on Etsy for a listing. Click on ‘edit’ on the listing menu, scroll down to the ‘Shipping’ segment and click on ‘edit’ on the current shipping profile.
Under the ‘What You’ll Charge’ section, select fix price. Enter the shipping fee in the ‘one item’ and ‘additional items’ fields and click ‘save profile’.
2. Free Shipping Guarantees
Etsy Free Shipping Guarantee provides free shipping for US customers when they purchase orders for $35 and more.
To set up free shipping guarantees click on your Shop Manager icon, go to Settings, and head to ‘shipping settings’. Select ‘Get Started’ on the free shipping guarantees tab, select next and lastly select set free shipping. Now, free shipping is activated storewide.
To deactivate it, simply scroll to the bottom of the ‘Shipping Guarantee’ tab and click ‘Yes, turn off guarantee’ and click ‘ turn off my guarantee’.
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The Difference Between Free Shipping And Shipping Guaranteed on Etsy
With free shipping on a listing level, the shipping conditions only affect the particular product listing.
However, with free shipping guarantee, US shoppers are automatically offered free shipping when purchasing an item or items with a cost of $35 and more.
You will have to set shipping requirements manually for each listing if you do not opt for free shipping guarantee.
With free shipping guarantee, new listings that you create over $35 automatically apply regardless of your shop’s currency.
By manually setting free shipping on each listing, you can choose to provide free shipping for selected items only. The setback with the free shipping guarantee is that it is across all items and that may not be profitable in certain scenarios.
How To Offer Free Shipping Without Losing Money
- Reprice Product To Reflect Shipping Cost
Instead of charging separate shipping fees, include the average shipping cost to the price of the item.
Imagine a scenario where there are two of the same products with the same order total amount. One product is cheaper but has a shipping fee and the other product is more expensive but has free shipping. Most buyers will go for the latter.
This is because when you offer something for free, it has a great impact on customers purchasing decision. Customers would rather pay more for a product of more value than for shipping.
However, this won’t work for every type of product. The shipping cost has to be significantly lower than the price of the product. For example, the shipping cost is $6 and the price of your product is $40. Using this example, you’ll only be increasing your price by 15%.
If your shipping cost is significantly higher or your product price is lower than your shipping cost, you need to think carefully about how much you want to hike up the price.
After deciding on the price increase, your next step is to formulate a plan to communicate the increase strategically to your customers. Here are a few things you can consider to justify your price increase.
- Make improvements to your products – make adjustments to the design and packaging, provide new updates (for digital products)
- A longer period of guarantee for the product’s quality
- Improve the quality of product photos & videos
- Provide benefits such as after-sale support
When communicating a price increase to customers be sure to highlight the positives and thank them for their continuous support. Focus on how the changes to the product will benefit the customer.
- Only Offer Free Shipping On Certain Products
If some of the items you offer have a high shipping cost, it may not make financial sense to offer free shipping for all the products in your shop.
In this instance, it may not be workable to use Etsy’s free shipping guarantee. It would be better for you to provide free shipping only for listings that meet your budget and margin requirements.
Free shipping for selected items is also a great tactic to highlight your listings. You can drive sales for listings with a higher profit margin or sell out products that have an expiry date.
- View Shipping As An ‘Acquisition Cost’
Offering free shipping is also a great way to market your business. It can be related to the ‘acquisition cost’ in advertising campaigns.
Instead of paying for ‘clicks’ or ‘website taps’, you’re paying for the real deal, a customer. This is an especially useful strategy if you’re a young business on Etsy.
However, if you were to think of shipping cost as acquisition cost, you will need to make it known to your target market.
If you have a mailing list, send out newsletters and market it on your social media platforms as well!
How To Determine If Free Shipping Is For My Etsy Shop
When deciding whether or not to offer free shipping for your Etsy shop, you will have to consider how much is shipping on Etsy going to cost you. Let’s look at a few factors.
- Your Product Listings Competitiveness
If the products you sell are easily available in other shops and the majority of your competitors are providing free shipping, it is probably best to offer them.
When you offer free shipping in this scenario, it will improve your search ranking on Etsy and give your listings more visibility compared to the shops that do not.
If your items are priced lowly at $15 per item for example, and you want to encourage shoppers to buy more of your products you may opt for a free shipping guarantee.
However, if you are in a low-competition niche where you are one of the few sellers, you probably do not need to offer free shipping. You may very well be ranking on the first page without offering it.
- Your Products Prices
Adding the shipping cost to the price of an item is a smart way to cover the cost involved with offering free shipping. Nevertheless, it may not work for every item.
If an item is highly priced and the shipping cost is comparatively low, it may not make much of a difference to make adjustments to the price.
For example, you sell a piece of jewelry for $350 and shipping is $6, which is barely 2% of the price of the product and should not dissuade a customer from purchasing the product.
However, if your item is lowly priced and the shipping cost is comparatively high, the adjustments you’ll have to make might not be straightforward.
For example, you sell personalized notebooks for $8 and shipping is $6, which is 75% of the price of the product. If you hike the price, it will make a customer think before purchasing, especially if similar products are around the $8 mark.
You could offer free shipping for a bundle of notebooks, however, for each notebook it doesn’t make sense.
- Your Products Weight & Measurements
If your items are heavy or are big in size, the cost of shipping can be very high, especially if you are shipping internationally.
If your item is a high-end product, adding the shipping cost to the product and offering free shipping is a feasible solution. You will however need to communicate the price increase strategically.
However, if your price is not that high, for example, $70, and shipping is $30, it will not make sense for you to absorb the shipping cost. And most sellers in your category probably will not be offering free shipping.
How To Deal With Returns & Exchanges
As an Etsy Seller, you are to manage decisions about cancellations, returns, and refunds independently without intervention from the platform.
It is not compulsory to accept exchanges or returns and to provide refunds unless you have stated so in the return policy of your listings.
If you do decide to offer returns, exchanges, and refunds it is best to be very clear about who covers the shipping label cost and shipping fee in these situations.
You must have it stated in your return policy to avoid any confusion and conflict. There are a few ways to go about this.
- Customers handle the whole return process from printing shipping labels to packaging the product and the cost of shipping it to you
- You can email a copy of the shipping label upon request and they handle the product packaging and cover the shipping cost
- You can subscribe to a ‘pay on use’ return label package where you send out a return label with every order and you only get charged if it is used. If you sell items that could frequently be returned like clothes.
It is probably best to meet customers halfway or to offer shipping on return especially if the cost is not that high and if you sell items that have a high likelihood of being returned, like clothing, or shoes.
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FAQs On Offering Free Shipping On Etsy To Increase Sales
Is It Worth It To Do Free Shipping On Etsy
So, is it worth it to do free shipping on Etsy? If your product price is low (less than $50), it is probably not worth it to do free shipping on Etsy. However, if your item is mid range or high-end, I recommend increasing the price of the product to include shipping costs and to offer free shipping.
Do You Get More Sales On Etsy With Free Shipping
How To Offer Free Shipping On Etsy Without Losing Money
So, how to offer free shipping on Etsy without losing money? Offer free shipping on Etsy without losing money by including the shipping cost in your product price. By doing so, buyers will know up-front what they need to pay for your product.
To answer “Should I offer free shipping on Etsy?”, well you’ll only find out if you give it a go. Be willing to try different shipping strategies to find what works out best for your buyers and product range.
My advice is to test out each strategy over a stipulated time period and then decide which one suits your business.
However, take your time with the process to ensure that you’re always making a profit and never a loss.
Ultimately, if providing free shipping to your customers adds value to your shop and ultimately, increases your profitability, then yes you totally should offer it to your audience.