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It’s usually a good idea to vary your fulfillment pricing strategies from one e-commerce channel to another. The tactic you ultimately choose will depend on the marketplace or platform you sell on. Just be sure your advertised minimum threshold exceeds your average basket size to make it a cost-effective pricing strategy. #CRAZY SHIPPING COSTS ON EBAY FREE#During peak holiday seasons, when consumers tend to spend more, you may want to use free shipping thresholds to increase average order value (AOV) and make shoppers feel like they’re getting a good deal. Keep in mind that you can change your strategy as needed. On the other hand, you may risk lowering the perceived value of a product if you decrease the price too much when sales velocity is strong. For example, if specific SKUs have experienced a recent dip in sales, it’s probably not the best time to start increasing the price. As with most e-commerce strategies, it should be tailored to your business. Conduct a Cost-Benefit Analysisīefore moving forward with one strategy over another, consider doing a quick analysis to determine which option is likely to help you gain more sales. There’s no one-size-fits-all approach to fulfillment pricing that works well in every instance. #CRAZY SHIPPING COSTS ON EBAY HOW TO#Retailers may not be hitting the mark according to consumer responses, which tell us that more shoppers are only purchasing online to access free shipping, and some will even swap stores to find it. Source: Shippo, 2021 How to Decide between Free Shipping and Discounted Prices The report also states that 21.5% of merchants now always offer free shipping, whereas 31% don’t provide the option at all. (The remaining 11% just want their purchases fast.) Yet, when given the choice between free shipping and fast shipping, an overwhelming 83% prefer free. According to a recent Shippo report, 49% of customers opt for lower cost shipping while 40% choose free shipping. ![]() The margins are thin between consumers who prefer lower-cost shipping to free shipping. The customers…were using a standard principle to guide the buying: expensive = good.â€īut is shipping something people perceive as having different levels of quality based on price? What Consumers Say About Shipping Costs €œConsider the strange behavior of jewelry store customers who swooped down on an allotment of turquoise pieces only after the items had been mistakenly offered at double the original price. Cialdini, an expert in the field of compelling selling tactics, describes this phenomenon in his book, Influence: The Psychology of Persuasion : ![]() Under this model, the free option always wins.   ÂĬonversely, humans also tend to correlate higher prices with better value and quality. This is called the zero price effect, or the irrational urge to get free stuff. There’s a reason we’re drawn to words like “discount†and “free.†Instead of weighing options equally in a traditional cost-benefit analysis, we fail to factor in the unspoken costs when products and services are free. So, is it better to pass shipping fees to customers as part of perceived free shipping — or to itemize transactions so shoppers see a lower price and shipping added on?   The Psychology of Online Pricing Today, consumers expect it for every online purchase. #CRAZY SHIPPING COSTS ON EBAY PLUS#Which would you rather choose: a $49 product with free shipping or the same product for $39 plus $10 shipping?įree shipping was once a fast-growing trend in e-commerce. ![]()
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