Friday, October 16, 2009

All about free shipping on etsy

So i decided to figure out how free shipping works... free shipping doesn't cut into your costs that much, as long as you build it in from the beginning. here is what i mean =)

Free shipping when two items are bought together

Item...................................Earring 1..........................Earring 2
Cost with shipping built in .....15 USD ..........................20 USD
Weight ...............................5 ounces ..........................5 ounces
Cost alone to ship............. 1.5 USD ...........................1.5 USD
Cost to ship together....... 2.41 for both ...................2.41 for both
Profit using etsy fee’s...... 13.53 USD........................18.22 USD
calculator

(13.53 + 18.22) – 2.41 for shipping = 29.34 USD

Normal shipping when the two same items are bought together

Item................................ Earring 2............................. Earring 1
Cost without shipping......... 13.5 USD............................18.5 USD
Weight............................ 5 ounces............................... 5 ounces
Cost to ship alone.......... 1.5 USD ............................... 1.5 USD
Cost to ship together.... 2.41 for both ....................... 2.41 for both
Profit using etsy fee’s.. 12.14 USD..............................16.81 USD
calculator

12.14 + 16.81 = 28.95 USD

What you saved
29.34 – 28.95 = .39 USD

So you SAVED a total of 39 cents by offering free shipping! Yay! This happens because with free shipping the cost for items when shipped together is not reduced. Of course this only happens when items are shipped together. So what happens when items are shipped alone? I'll show you =)

One item with free shipping

Item: Earring 3
Cost with shipping built in: 40 USD
Weight: 5 ounces
Cost to ship: 1.5 USD
Profit using etsy fee’s calculator : 36.94 USD
Total profit: 35.44 USD

One item without free shipping

Item : Earring 3
Cost without shipping: 38.5 USD
Weight: 5 ounces
Cost to ship: 1.5 USD
Profit using etsy fee’s calculator : 35.53 USD
Total profit : 35.53 USD



35.53 – 35.44 = .09 USD

OH NO! You just lost 9 cents from offering free shipping! Thats a dime, you just lost a dime... that sucks! Okay, i was just kidding =) From my point of view, a dime isn't that bad.

A little more analysis

When shipping two items together you saved 39 cents. When you shipped an item alone, you lost 9 cents. That means you will break even if for every 3 items that you sell alone, you sell two items together.

Some general stuff about free shipping

Buyers love free shipping. Even more, etsy loves free shipping. Why does etsy love free shipping? Because for every item that has shipping built in, etsy gets some money. Etsy is a business, and the more items that sell with free shipping, the more money etsy gets. Since etsy loves free shipping, and buyers love free shipping, why shouldn't you love free shipping? Well, some people get a bit anxious about adding shipping costs to their prices. Some buyers get a bit anxious about free shipping because they think that the prices have been inflated. So free shipping is that great...

If you want to implement free shipping in your shop... I think the best thing to do is to build the shipping in from the beginning. That way you never have to increase your prices. And if you do want to increase your prices, just do it! One or two dollar increases aren't as noticeable as FREE SHIPPING in you item's name. And remember, what etsy likes, etsy supports.

etsy fee calculator : http://www.rolbe.com/etsy.htm

p.s. You don't have to offer free shipping, i was just laying out the facts =) You should do whatever you think is right for your business. Most importantly have fun =D And sorry about the junky formating... well what did you expect -.-

brought to you by junkshopgirl.

8 comments:

  1. I like your store :)

    I have contemplated free shipping, but I think for now I will just have free shipping on large orders.

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  2. wow- thanks for the breakdown. i have offered free shipping in the past and it doesn't seem to attract any more buyers unless i am offering it through Etsy "Weekend Deals".
    As a buyer- I love free shipping because I am just a bargain shopper!!

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  3. Great analysis! I love having someone else do the math for me!

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  4. This is an interesting perspective.
    I'm not sure free shipping would work for me, because I always ship plants by priority mail, which of course starts at ~$5. But you have inspired me to think more about it.

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  5. This is very interesting. I'll keep this in mind when I open in Nov.

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  6. You raise some VERY good points, and now I have some stuff to think about :D THanks!!

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  7. I found it very interesting too. Great post.

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  8. Great article - I love seeing the math! Just a word of caution - using words like Free Shipping in an item title can keep it out of SEO helps like Google base, so depending on how and where you promote, it might be best to mention it in the description or tags instead!

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