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I did a little data diving this morning, and found some really interesting information. I wanted to see if I can verify that you get a sales boost from offering Free Shipping vs Charged Shipping using the data that is currently on eBay.
I selected 20 different clothing and shoe searches on eBay (“Brooks Brothers Dress Shirt”, “Silver Jeans”, etc.) and looked at 4 different filters: Total Active, Total Active with Free Shipping, Total Sold, Total Sold with Free Shipping. I could then calculate the Total Active with Charged Shipping (Total Active minus Total Active with Free Shipping) and Total Sold with Charged Shipping (Total Sold less Total Sold with Free Shipping).
From there, I took the sold numbers (which is 90 Days of Sales), divided by 3 (to get one month of sales) and then divided by the number active to get a Sell Thru Rate. By looking at the STR for Total vs Free Shipping vs Charged Shipping, the data was revealing…
In every case but 1, the STR for the CHARGED Shipping was BETTER than the FREE Shipping. The one case that didn’t follow, the Free STR was 1% better than the Charged Shipping. In 2 cases, the STR was the same. In some cases, the STR was better significantly (10%-21%).
I know that there are some VERY smart people on the forum. Please question my method for this calculation and tell me where I would be wrong here. Otherwise, it appears that you get a better STR when you CHARGE for shipping, rather than offering FREE shipping.
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Very interesting Troy. You da man. Also maybe this could hit on the caliber of buyer. Those buyers looking for good, solid vintage, unique pieces and have been doing it for a long time on Ebay, know that FREE SHIPPING is built in and in most cases a guestimate and or based on worst case scenario like zone 8. So being savy, they figure they may get a better price by going with Cal. shipping which may be more realistic based on actual weights and also maybe they don’t trust the Free Shipping Sellers. And it could also include the fact that those just wanting free shipping and not knowing these things and just looking for something for free are not quality buyers.
Who knows what mentality is also swirling around in the buyers minds as they peruse the Free vs. Not Free and what makes then go for the Paid, Calculated shipping items???
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You make me wonder if the universe of listings using Free Shipping…are they the same as the listings that charge for shipping? Are they the same quality, same level of seller, same price (considering)…
Just trying to punch holes in the data that I pulled. Why would the STR be better for Charged Shipping Listings than for Free Shipping Listings?
I used to do Free Shipping for clothing, then switched to charging last year…and didn’t see a drop in sales. My thoughts have always been that for items that can be filtered on listings (left side), like Free Shipping, that it would be a boost in sales if we offer it (as we stay in the universe of listings a buyer is searching for when they use that toggle). That Siren Song of scratching out some more sales.
But I would think that if that was true…that my test would have shown that the STR on Free Shipping listings was better than the Charged Shipping listings. So either the data is right…or I missed something in my logic on the analysis and it is something else that is messing with the data.
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Is there a significant difference in price? I would think that, all things being equal, people are buying the least expensive shirt/clothing item.
If I am looking for a commodity item, I search by price rather than messing with the buttons on the left (like free shipping). The ap makes that search function really easy.-
antarestar: Price is possible, but I wouldn’t think so. Most of these items have a fairly tight range in price (except maybe the suits I checked). Plus, with the numbers of items in the data sets, I would think that evens out. The smallest set had 1,516 active listings, the largest had 608,955 active listings, and the average for the 20 data sets was 46,147 active listings (I was staying as generic as possible to have large volumes of actives and solds).
The average was 38% of the active listings were offering Free Shipping. On the Solds, the average was 29% of all Solds had Free Shipping.
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As a buyer I always question a sellers effort in good packaging if the listing features free shipping.
I know as a seller I would be skimping on material and would be trying to save weight so I shy away from free shipping listings unless it’s something I really want, then I contact the buyer and hope I don’t piss them off by giving packing suggestions.All comparisons are subject to the type of item, t-shirts? Easy, 1st class is like a flat rate. Unbreakable items would be a safe bet as well as any item that fits securely in a Priority Flat Rate.
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When I buy anything on eBay, I’m more interested in buying the item I want. Free Shipping isn’t part of the decision. So if Im buying a shirt, Ill gladly pay for shipping.
I really think Free Shipping might only work on super competitive commodity items. I think shirts have enough variation (size, color, style, brand) to take free shipping advantage out of the equation.
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Steve and Jay: Good points. Just interesting as this goes against what we hear so much from eBay, that Free Shipping will increase sales. I never see their data, they just say “our data shows it increases velocity”.
Well, my data says it don’t… 🙂
Just want to get as many other people to tell me if I missed something, so I don’t make a decision on bad data…
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