Only the TRUTH about ECommerce
Free Shipping - Should I Offer It?
"Free Shipping" doesn't exist. There's no such thing. It's a myth. Somebody ALWAYS pays for shipping.
In the 25+ years I've been making money online (and in my 43+ years in business overall) I have never come across a shipping company that ships for free. Have you? In one of my EBiz Insider Workshops last year, I had a person who had been a UPS Driver for 17 years. I asked him if he ever worked for free.
He said no.
I was not surprised.
Covering the shipping cost of a product to an online customer happens in one of three ways:
1. The seller pays for the shipping, which comes out of their profit margin.
2. The buyer pays for the shipping, which gets charged to them during the purchase.
3. The seller pays for the shipping by HIDING the shipping cost in a higher product price, which still means that the buyer pays for the shipping.
Then of course sometimes, there's a combination where the seller hides SOME of the shipping in a higher product price, and charges the buyer a lower 'flat rate' shipping price.
Any way you ship it, there is NO such thing as actual Free Shipping. You know that, I know that...hey, even our dog probably knows that. She's pretty smart.
Free Shipping has a cost. Always. Small business owners cannot afford to cover any of that cost out of their profit margins (which is the only way to offer Free Shipping). Fake Gurus who tell you that as a small business owner you must offer Free Shipping are simply trying to feed you a plate full of ship, so to speak, and are expecting you to pay them for the meal.
Like so many other things in sales, Free Shipping is a gimmick. Sales gimmicks are the last resorts of people who don't know how to actually market products.
Let me repeat that LOUDLY for those in the back row who are playing games on their smart phones and not paying attention:
SALES GIMMICKS (like Free Shipping) ARE THE LAST RESORTS OF PEOPLE WHO DON'T KNOW HOW TO ACTUALLY MARKET PRODUCTS.
Fake Gurus do not know how to actually market products. They only know how to feed you plates full of ship, and (ironically) charge you for delivering them.
Small business owners who do know how to market products charge shipping to their customers all day long, and their customers pay it without a problem. So let's talk about some of the things involved in actually marketing a product properly.
1. Choose a product market that's profitable and has room for competition.
Market Research (when done correctly) is the process of finding products that (a) sell well, (b) are not overly competitive, and (c) fall within certain price ranges that make a product worth selling.
The Fake Gurus will tell you to 'sell something you like', or 'test products to see what sells'. That's why they're called Fake Gurus; both of those ideas are ridiculous.
This isn't about selling what you like. It's about researching what sells well and has room for competition, and then learning to love that product. A good retail salesperson is a die-hard evangelist for the product they sell. If they're not, their lack of enthusiasm in their Social Media efforts will rat them out in a heartbeat and kill their sales before they begin.
2. Understand how people search for the product.
A good marketer knows that Keyword Research is, well, KEY to marketing a product. Researching every possible word or phrase, whether closely or distantly related to the product line, and then using those words and phrases properly in marketing makes all the difference. Marketurds and Midiots won't even mention Keyword Research to you most of the time, and it's absolutely critical to do it, and do it right.
3. Develop a deep understanding of WHO BUYS the product.
You CANNOT sell the same product to all age and gender demographics at the same time. No professional marketer ever even tries to do that. Not even the big kids at the multi-million dollar Ad Agencies on Madison Avenue. Every product line has a 'sweet spot' where the highest concentration of customers for that product exist, and it's a marketer's job to find that sweet spot and understand it.
When you figure out who the customer is that buys the most of your product most of the time, you've found the money in the product line. Demographic Research then tells you things like how to talk to them, what color palettes work for them, whether they prefer to see a lot of text and less imagery, or lots of imagery and less text on sales pages, what style of graphics and typography we should be using, and many, many more critically important things.
When you understand the Demographic, you know how to present them with an extended marketing message that strikes an irresistible chord with them, and if that's done right they'll buy from you immediately even if they have to walk to the Moon and pick up the product themselves.
But again, Fake Gurus know nothing of these processes. These are real world marketing tools, and the Fake Gurus aren't interested in the real world except as it applies to emptying your wallet.
4. Sell in the right places.
If you were going to build a lemonade stand on the sidewalk and sell cups of lemonade to passers-by, like kids do in the summertime, would you rather build that lemonade stand in from of The Dollar Store, or in front of Macy's?
People walking into The Dollar Store are bargain hunting. They're trying to save money. You might get a nickel a cup for lemonade once in a while in front of The Dollar Store. However, you'll get a quarter a cup for lemonade all day long in front of Macy's.
In the PHYSICAL retail world, LOCATION matters because the FOOT TRAFFIC matters. Higher end retail stores are built in physical locations that have a higher-income DEMOGRAPHIC per capita because that's where the money is.
The same thing happens online. People who are shopping on eBay, Amazon, WalMart.com, etc., are bargain hunting. Those people will most often be price-comparing, because they have a need to save money. In those places, Free Shipping DOES have an impact, and so does price. When you sell in places where people shop with a bargain-hunting mentality, you have to lower your price to the point where your profit margins are so low you couldn't see under them with a microscope, and that's no way to run a business.
You need to place your business where the money is; where people are searching for products based on the quality they want rather than the price they can afford.
That is and always will be your own web site.
People who shop the search engines for products are NOT going directly to eBay, Amazon and WalMart.
They're searching for the PRODUCT, not the PRICE. The number of people who search Google and other search engines for products vastly outnumbers the people who bargain hunt directly at eBay, Amazon, etc.
If you learn proper Market Research, Keyword Research, Demographics, and sell in the right place with a clear understanding of marketing, you'll make a lot of money and you won't need to even think about offering Free Shipping.
Want to learn how things really work? Check out my EBiz Insider Workshops. I'll teach you 'til you beg for mercy.
The next time some Fake Guru tries to sell you a plate full of 'free ship', hand them a spoon and tell them to eat it themselves; you're not hungry.
- Automatic Product Feeds: Good or Bad?
- Free Shipping-Should I Offer It?
- Free Trial Websites
- Fulfillment Centers
- Gold Rush
- Importing from China
- Liquidations-Good or Bad?
- Paid Advertising – Do I Need It?
- Private Labeling
- Retail Arbitrage
- Setting Up Your Business Name
- Still Room to Compete?
- What happened to eBay?
- What sells online, what doesn’t, and why
- Wholesale Backorders: The Butterfly Effect
- Home-Based EBiz: The Unvarnished Truth
- Beware ‘Easy’ EBiz Training
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Most ECommerce Marketers are actually just part-time salespeople who push whatever pays them the highest commissions, no matter how bad it is, as long as they get paid. You CANNOT listen to those people.
I've spent 25 years actually running successful business in this market, and really HAVE made millions in it. I'm one of just a very few people who can answer ANY question you have about ECommerce.