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I have no concerns at all about free returns. I think it’s good customer service that gives me a competitive edge. Some customers are going to filter on it, so like Guaranteed Delivery, it has a potential of reduced traffic. Sure some customers may abuse it, but my philosophy is to not set my policies based on fears. I don’t want to set blanket policies for all customers to protect me from a few who may abuse it. So you lose $10 here and there on a few returns. It’s a drop in the bucket for the profits we make. I like anything that makes me appear to have exemplary customer service, including “free” shipping on fixed price shipping (I charge for Priority) and free returns. Buying online is a risk, so anything I can do to mitigate that risk for my buyers, I’m in.
I’m late to this episode’s discussion, but wanted to chime in. I adopted the free shipping early on, because I understand the preference to buying something with free shipping instead of feeling like you’re paying for add-ons to the final price. Like how your cable bill has fees and taxes on top of the monthly price in your head. That being said, after several years of offering free shipping and adding shipping into the price of the item, I’ve evolved into a hybrid model.
Now I offer free shipping on any item I can ship 1st Class or Media Mail. If shipping is going to be a flat $4 no matter where it’s going, why not just add that into the price? But for Priority shipping, I charge for that now. I do fixed price buy it now for all my items, so free shipping makes it difficult to manage offers. I live in AZ, so many of my customers seem to be on the east coast, where a 1.1 lb item shipping Priority can be $12.40 to ship. I may accept a $30 offer with free shipping going to CA, but a customer in NY where shipping is $12 makes $30 less desirable. So now I charge for Priority shipping, and do calculated cost.
My question has always been, why are sellers so reluctant to do free shipping, even on fixed price shipping like I’m doing? Does it make us feel better to sell an item for $16 + $4 shipping, vs $20 shipped? It feels like we’re not paying for shipping out of our profits? It’s all the same. That perception you’re feeling, that shipping is coming out of your pocket is having the opposite effect on your customers. Even if it doesn’t increase sales at all, what’s the harm? One of the main reasons I like it is that I get automatic 5 stars for shipping costs. A customer cannot rate me on shipping costs if I offer free shipping. I can see a customer dinging a seller with 1 star for shipping because they were charged $4 and they felt like shipping should be free. I think free shipping is a customer delighter, and I’m all about making happy customers.
Brian, your 2016 is what I’d like 2017 to look like. Not sure if anyone’s familiar with Gary Vaynerchuk (online entrepreneur guru), but he’s started a 2017 Flip Challenge, with the goal of making $20,170 in 2017 on eBay, Etsy, Craigslist, etc. I’ve been eBaying since 1996, but very part time, as like you, I make a decent living at my 9-5 job. This is a side hustle for me, but would love to hit that $20,170 goal.
I too maintain a spreadsheet where I track the cost, sales price, and all fees for each item I sell, so I can monitor my revenue, profit, ROI, fees on a monthly basis. I think you’re spot on with prioritizing profit dollars over ROI %. My goal is always to make X times my initial investment, but I think that is more applicable when buying $1-$5 items. You want to make sure it’s worth your while. But when you graduate from that entry-level selling, and are buying $100 items, making 10X your initial investment isn’t necessary. I’m fine selling a $100 item for a $50 profit after fees. I’d rather make $50 in one transaction than 3 transactions that were 500% ROI’s.
With that in mind, my listing goals this year are going to be dollar based and not quantity based. I’m not impressed with having 5000 items in my store. To me that says I spent alot of time listing, and not much of it is selling very well. Instead, I’d like to have goals like listing $100/day, whether that be 5 items or 1 item.
