Free Shipping and Etsy

Posted on by Noelle Hines

Dear Mr. Silverman, I Respectfully Disagree

If you sell your fine art prints or print products on Etsy, you probably know who Josh Silverman is, but for those of you wondering, he’s Etsy’s newest CEO. Before I go any further, I would like to make it clear that what follows, is in no way intended to bash Mr. Silverman, or Etsy as an e-commerce platform. My hope is that we, as sellers, can continue to grow in success, despite the hurdles we may come across.

If you don’t know about Etsy’s push for sellers to remove shipping costs with their Free Shipping Guarantee then you’ve got a lot of catching up to do. Like many other sellers, I felt a bit discriminated against by the recent decision to favor and/or feature listings that shipped free.

Should I offer free shipping on Etsy
Should I Offer Free Shipping?

This campaign, according to Etsy’s CEO, is going to drive sales for the Etsy community.  Because I, like many others, don’t offer free shipping, I’m finding myself backed into the proverbial corner.

I think it was Bugs Bunny(?), who said “If you can’t beat ’em join ’em”.  So I set off on a mission to figure out if I could beat Etsy’s recent free shipping push, or whether I’d be joining the parade.

The Numbers, the Majority, and How They Affect Our Decisions

We’ve all heard the phrase, “numbers don’t lie”. Recently a group of Etsy sellers were asked if they would adopt Etsy’s new Free Shipping strategy and given a list of answers to choose from, here were the results.

Make no changes (36%)
List more products on Etsy (2%)
List less products on Etsy (25%)
Stop listing on Etsy (13%)
Don’t know (24%)

The sellers were then asked “Do you feel that Etsy’s free-shipping initiative was based on the wants/needs of their sellers?” 1% said yes, 96% said no, and 3% said “don’t know.”
 It would appear that many of the sellers fighting this push feel as though Etsy is all about making money for Etsy and not helping the sellers at all. But what would one expect? Etsy is an e-commerce marketplace designed to profit from the sellers. That’s how their business model was built and that’s how it remains to this day. Etsy’s goal was partly to give handmade items a place to shine, and mostly to introduced a niche in online shopping marketplaces based on the creative processes and focusing on personalized experiences, yes. But the bottom line is this: They are in the business of making money.
 
If we, as the small-time entrepreneurs that we are, cannot relate, then we need to seriously rethink our association with Etsy, or maybe rethink our business model altogether. If we are selling framed artprints  just for the fun of it, we are clearly disturbed. The only fun part about business for me is the creation part, and then getting notified that I just sold something.
I work hard  to make the little money that I do. I spend at least 3 hours of every day managing my little business (writing product descriptions, designing mockups, and calculating pricing and listing my products on my site and in my Etsy shop, submitting orders to FinerWorks for fulfillment, interacting with customers, sending shipping notifications, checking on my dropshipped orders’ statuses, tweaking SEO on my site, picking apart Etsy listing titles and tags to see what I can improve, studying SEO trends, doing product research…) I’m sure you can agree that it’s a lot to do “just for fun”.
 
So despite the majority who are seeing much more into this than they should, I think we can all still agree that this is a money game. Winner takes all, and in this case that’s Etsy -Etsy, whose coattails we’ve been riding for the last 14 years. And why do we continue to ride? To make money. And one of the ways that Etsy intends to continue making money is by appealing to buyers who are accustomed to and/or expect free shipping.
 
If we decide not to get onboard, it should be based on educated research, and not because we have an axe to grind. I’ve read some pretty harsh stuff from sellers, publicly wishing the absolute worse demise on Etsy based solely on the free shipping push. What usually follows is a stampede of similar complaints and then threats like, “If Etsy doesn’t get their head out of the sand, they’ll be bankrupt soon!” and “I’m shutting down my shop!”. I’ve read accusations against the company, misinformation and more.

Unethical is Pushing it

Let’s get the ethics stuff out of the way once and for all. There is a barrage of well-scripted temper tantrums available for us all to read – just do a search on “Etsy free shipping” and you first few entries are bound to be from Etsy’s Community forums.

And the question raised isn’t so much whether or not the push is going to drive sales or even be feasible for one’s business model, but whether Etsy’s work-around for recovering shipping costs is even ethical.

” … we also created a way to bulk edit listings so you can adjust your item prices to recover your shipping costs. That means you don’t have to take on the cost of offering free shipping yourself.” – Josh Silverman, Etsy CEO

This statement prompted instant revolt within the Etsy selling community. Those already against the idea of free shipping had even more fuel for the fire.  As a result, more and more sellers are on the same train regarding the issue of ethics and how it relates to price-padding.
It’s the opinion of many Etsy sellers that: buyers want to know what they are paying for, will feel sellers who offer free shipping are not honest or transparent about costs.

Sellers just don’t want to conform. And believe you me, they are fighting tooth and nail.  But in a business sense, none of these arguments are valid since we can stop using the Etsy platform at any time and we all signed off on their terms when we opened our shops. Still, the idea that Big-Business-Etsy (I have to chuckle at that) might now be “bullying” sellers into accepting the push, makes for a great many forum topics and blogs.

“Starting on July 30, 2019, we’ll give priority placement in US search results to items that ship free and to shops that guarantee free shipping to US buyers on orders of $35 or more. This means that shoppers in the US will primarily see items that ship free and shops that guarantee free shipping on orders of $35 or more in the top and most visible rows of search. We’ll also begin to prioritize these items wherever Etsy advertises in the US—in email marketing, social media, and television ads.” -Josh Silverman, Etsy CEO

Some sellers agree that Etsy is essentially punishing those who don’t offer free shipping.

One user, SueFiscalini complained,

“I got this email too and felt very threatened to do it their way or else!  Is this legal?  We pay the same listing fee!  Is Etsy going to give us a discount on our listing fee if they refuse to honor a fair place in the search?

SewlyButtons responded:

” I too wonder about this. At the very least it’s not ethical. To charge sellers the same fees but restrict placement in search results by requiring sellers to adjust their pricing (either absorb the cost of shipping or up your item costs)…without a change in the fee structure… it just doesn’t seem legal !!”

I can’t speak for the legality of favoritism towards sellers in the search queries. That’s a bit above my pay-grade. And honestly I don’t know that I really believe that Etsy can (and is) doing this despite their claim.  Fortunately, Etsy’s search engine isn’t what’s pulling in the buyers if they start their search on the web and Etsy products are gaining a lot more exposure outside of their platform than they did a year ago, so we don’t need to rely anywhere as much on Etsy’s search engine to reach our market. Plus, I can honestly say that I’ve been testing this using the Etsy Shopper App and I am not seeing where sellers who charge shipping are being “suppressed” or placed on the bottom of the search results. Mine certainly aren’t. They’re spattered pretty much everywhere just like always.

Still, all this talk about ethics lead me on a search for a better understanding of how ethics relates to pricing in the business world. Here’s what I learned:

Consumers, for the most part, do understand the concept of “fine print”. So we can be confident that nobody is really getting duped. They don’t want to be overcharged and many will go out of their way to compare prices to get the best price. Furthermore, when surveyed, the majority of online-consumers are surprisingly impartial to the idea of shipping costs being folded into the price of the products they purchase. They really don’t care.

If marketing or pricing strategies or do not infringe on values like honesty, transparency, and autonomy, they are considered ethical. As such, the main crux of pricing ethics concerns the establishment of a balance of power (through information) between the producer and the consumer. So therein lies the gray area. Are we being transparent with our buyers if we incorporate shipping into our product price? Some would say so, based on the level of knowledge and understanding that most consumers have. Should ethics (transparency) really be a concern for Etsy sellers, the remedy would be to provide a breakdown of the product value and the cost of shipping in the product description.
At the end of the day, it really comes down to what each Etsy seller is comfortable with. If it feels wrong, they can choose to continue to charge shipping (and hope they aren’t punished in search queries) or adapt and do what it takes to continue to represent a transparent and honest price structure while still using Etsy’s Free Shipping tools.

Proven Success or Myth?

I’m curious to know how many sellers back Etsy’s free shipping push as an earnest attempt to make us, as sellers, more successful. The industry swears by it, but a whole lot of sellers are pushing back. So what gives? Are sales driven by free shipping or that just a myth? You might soon agree that the answer to this question is truly a subjective one.

Case in Point: Recently, I was given the task of finding a a new counter-height table for the lobby here at FinerWorks. When local artists and photographers stop in to pickup their orders, our current counter makes it tricky when handling ultra-large prints. A larger surface will make a temendous difference.
After deciding on a table, I was pleasantly surprised to learn that shipping would be free (I’ll take it, thank you). The shipping/transit time didn’t seem unreasonable at first glance. Based on it’s ship location, I guessed 2 weeks tops. But we are almost 4 weeks in and no table yet. Tracking has been non-existent. Completely irritating. The company is huge and “reputable” though so other than being extremely irritated, I’m not yet ready to assume the worst.

Takeaway: Free shipping didn’t win me over as the consumer, it was just nice. But had I looked closer, I may have looked for a way to purchase a shipping upgrade of some sort. I guess you could say that the term “Free Shipping” is an oxymoron. How can you have something that is both “free” and “of value” at the same time. It’s impossible to have “nothing” and “something” at the same time. That’s just math.

In the case of the company that I purchased the table from, this myth is totally busted. This entire experience has done the opposite of encourage me to seek out items that ship for free. Next time I see a vendor advertising free shipping, I’m going to be a lot more selective about whether or not I purchase from them. I’d rather paid for shipping, had a valid tracking number and reliable carrier than pay nothing for the lowest possible class of shipping.

Competing with the Giants

But what about Amazon and their free shipping? It’s fast and free!  Nope, not free.
Prime members can take advantage of super-quick transit for no charge. But Prime members pay a membership fee. And most sellers on Prime take advantage of Prime Fulfillment (where shipping is solely controlled by Amazon, sent directly from their warehouse, using reliable carriers). There’s no need for these sellers to pad their prices to cover shipping costs. In fact, until the recent launch of their Seller Fulfilled Prime Program,  Amazon solely footed the bill for shipping costs.
But while Amazon has essentially set the stage for the consumer’s online experience (brain-washing us all with “free shipping” expectations), they can attest to substantial losses in shipping costs. Think billions. In light of the growing cost of shipping each year, they pushed a loss of 7 Billion for 2016. In fact, a recent article by GeekWire reports, “In an attempt to partially offset these rising costs, Amazon bumped up the cost of a Prime membership last year for the first time since 2014.”

Pros, Cons, and Other Compelling Questions

Consumers like free stuff, there’s no doubt about it. But what exactly is it about free shipping that they like? On the contrary, there are instances when a consumer may be impartial to “free shipping” offer, or find it counter-productive to their needs. Let’s look at free shipping from the consumer’s point of view.

Pros of Free Shipping (For Consumers)
  • Free shipping guarantees no surprise costs at checkout
  • Free shipping is a “Deal” and it puts buyers in a good “buying mood”
  • Free shipping is perceived as instant savings (e.i instant gratification for the consumer)
Cons of Free Shipping (For Consumers)
  • Free shipping is irrelevant because consumer is shopping for unique or hard to find items
  • Most consumers understand that shipping cost is absorbed by the price of the item they purchase
  • Consumer has had a poor experience with a “free shipping” experience
  • A growing number of online consumers make their purchases online after comparing their total checkout costs between merchants.


    As for the sellers….

I can’t speak for everyone, but based on my experience, it hasn’t helped before. I did my own Free Shipping test last fall, after Etsy insisted that lower shipping costs would help my increase my sales/visibility. But I didn’t see any type of increase in my sales. They actually went down. Because of seasonal trends, I know I didn’t conduct this “test” in any type of controlled environment, but not long after restoring my shipping fees – albeit, slightly lower than they’d been prior-  sales began to increase again. Coincidence? Hard to say. But after researching this in the Etsy Community forums one can conclude that the majority would disagree.
It was (and still is) encouraging to consistently hear from other sellers that offering free shipping did not improve their sales, either, but I think it’s still important to remain open-minded to what may lie ahead for us in the business sense. Though plenty argue that free shipping hurts their sales, a handful still swear by it.

Before we get into why free shipping works for some and not others, lets look at some supporting arguments that Etsy sellers give for offering free shipping.

 

the Pros of offering free shipping on Etsy:
  • Etsy listings that ship free can easily be recognized during searches
  • Consumers have been groomed to expect free shipping so your market-reach may be broader and sales may increase
  • Free shipping offers a simple price start to finish
  • Consumers tend to be repeat customers of merchants offering free shipping (provided their buyer’s experience is a positive one)
  • Free Shipping is connotative of “something for nothing”. When the word “free” is thrown into the consumer’s field of vision their interest is piqued
  • Etsy may prioritize/favor your shop listings in Etsy searches and in their marketing

And here are the most commonly raised arguments against offering free shipping.

the cons of offering free shipping on Etsy:
  • Sales may decrease (some Etsy consumers associate free shipping with mass-produced products and that’s not why they shop on Etsy)
  • The connotation, “Free Shipping”, may lower the perceived value of your product
  • Consumers who know that nothing is ever free may find your price-points to be misleading
  • Your products are too expensive for consumers (shipping cost calculations need to incorporate worse case scenarios. A lamp may cost you $15 to ship it to the next state over but $40 to send across the country.)
  • The cost of “replacements” will still solely be on the seller, but it will cost 2 x’s as much
  • Returned products will always guarantee a loss in shipping costs unless you can convince your buyer (and Etsy) that shipping is only free if they don’t return a product
There’s a lot to weigh, isn’t there. I found good arguments on both sides of the spectrum but all this did was bring me back to square one.  Was I going to have to just pick one – dive in head-first, and hope I made the right choice?
Probably not. I’m not a good diver, but I’m really good at investigating. And that’s exactly what I did.

Analyzing the Market from a Consumer Standpoint

Until I understood the consumer’s thought process I’d never get my answer.

If I primarily did my shopping online, it would be a given that I’d seek out free shipping. I’d be a fan of ship-to-store, or in-store-pickup options too if they saved me shipping fees at checkout.

Other online purchases I might make, like cleaning supplies, paper supplies, and other disposable objects are likely to ship free. Pet supplies, and even groceries from my neighborhood store might be delivered at no additional costs.   Free shipping can be a successful marketing campaign for brands that sell consumables because the buyer often returns to make the same purchase over and over again.

But there are plenty of items for which shipping fees would not be unexpected. A handful of popular department stores still charge for shipping  If you’re familiar with a little store called Disney, they charge shipping too. Shipping and handling isn’t a thing of the past. It’s still very much present in the e-commerce community as a whole, but clearly, the giants are trying to set the standard.

So just to recap: The types of products purchased by consumers, or sold to consumers is another contributing factor in determining how necessary a Free Shipping campaign might be.

Meeting the expectations of the customer doesn’t always mean we have to adopt campaigns that we know isn’t in our brand’s best interest.  But, should free shipping be  sustainable, or, if  one’s product is a good match for such a campaign, it may be in their best interest after all.

If your gut is telling you free shipping isn’t a good idea, it very likely isn’t. You know your buyers the best. But the movement for free shipping doesn’t look like it’s going away anytime soon, so coming up with a Plan B before it’s too late, will probably be a wise move.

My Customer’s Shoes

When my buyers come to Etsy and see one of my listings on their screen, they obviously aren’t shopping for craft supplies. They probably aren’t shopping for essential oils. I doubt they are here for anything consumable, if they’ve come across my listings.

But let’s back up and put ourselves into our buyer’s shoes.

If  we are shopping for consumables and low dollar items,  we might prefer free shipping. If we are shopping for these on a regular basis, chances are high that we would mainly favor the Free Shipping Guarantee.

Shopping for unique products might alter the buyers “free shipping” expectations.

On the other hand, there are a lot of unique items on Etsy.

Art prints, cards, framed professional photography, and everything else that that can be called art,  fall into this category.

Of course this goes beyond wall decor or mugs. Any “have to have it” item can fit the rule. Custom made items,  whether wall decor, gifts, kitchenware, furniture, bags, jewelry…. These are the items for which the Etsy buyer, may succumb to shipping charges with little complaint. Of course if it’s offered, it may be a perk, But if they have to have it, who knows?

If shipping charges are going to make or break their decision to purchase a framed fine art print, for example, they might not be my target-market.

Free shipping does work to drive sales. But are my sales driven by free shipping offers? I don’t think so. In my opinion, most artists selling fine art prints of original artwork or designs on Etsy are not selling because of shipping costs or the lack of.
But yet… These free shipping trends are hard to ignore. I spoke of a Plan B earlier. If free shipping ultimately takes over the e-commerce world (or if Etsy finally gets their search engine under “control”) I want to have a plan of action in place, ahead of time.

Breaking Down Your Questions to Find Your Answer

There’s no easy answer here. And the community, based on statistics, is pretty split. Remember, what works for one seller or even 100, won’t necessarily work for your brand.

If you’re not ready to pick a side yet, that’s understandable. Sometimes waiting for the dust to settle to see who’s still standing is all we can do.

But if you’re ready too make one of the biggest decisions you’ll ever make (on Etsy), here’s a cheat-sheet to get you started:
Questions to ask yourself:
  • Is free shipping compatible with my brand? 
    • Do my buyers expect this for the type of product I sell
    • Do products similar to mine usually ship for free
    • Will it add, or take away value from my brand
  • Is offering free shipping sustainable
    • Can I afford to offer free shipping without padding my prices
    • If not, can I still “pad” the price fairly without overcharging the customer while at the same time, not taking a loss
  • How will offering free shipping increase my sales?
    • Will my products gain higher placement in Etsy searches
    • Will my products be less visible in Etsy searches
    • Will my buyers purchase more items if I offer free shipping

In Closing: Plan B

[ Update: Just a few days ago, I got a new notification from Etsy on the sellers app, warning me that shops that don’t offer the Free Shipping Guarantee will no longer be visible on the first page of searches for US customers. The gist of it was “Look, we’ve been saying that it’s live for a while, but its REALLY live, now.”

The original statement in Josh Silvermans email claimed that any listings that shipped free, or shops that offered free shipping would get prioritized placement. But this has supposedly been amended to exclude listings that ship free and it’s now claimed that any shops not offering the Free Shipping Guarantee will be pushed from the 1st page of search results.

I have continuously tested this claim however and for the past 4 days, I have not been able to generate search results that back up these claims. I still see just as many with shipping costs today as I did 3 weeks ago. And yes, I have tested this on multiple devices, ip addresses, and browsers, both logged in and out.]

In lieu of Etsy’s claim that I’ll lose my prominent placements in search if I refuse to jump on the bandwagon, I’m trying something a little differnt.

I have to admit that their revision of who would qualify for higher visibility sent me into a small state of panic at first. It was understood originally, that items shipping free would be at the top of search results. Now, it’s morphed into a condition where supposedly only shops offering a Free Shipping Guarantee are eligible for prominent placement, AND those who don’t offer the free shipping guarantee will no longer be visible on the first page of search results for US shoppers.

But this has been a promise in the making for close to a year, hasn’t it? As of this evening, I searched for ten commandments wall art, and located one of mine listed “more prominently” than 3 similar products that ship for free.

This confirms my understanding (very limited understanding, by the way) of Etsy’s search algorithm.

Etsy’s search algorithm takes a large number of factors into account to determine where a listing might fall. I call it a listing placement “score”. Here are just a few:

  • Etsy assigns every shop a “customer and marketplace experience score” and each listing is evaluated for listing quality, contributing to your product’s listing placement “score” in searches..
  • Customer reviews contribute to listing placement “scores” in searches, both negatively and positively.
  • Favorites that turn into purchases contribute to better listing placement “scores” in searches.
  • Frequent purchases for a listing will contribute to better listing placement “scores” in searches.
  • Offering Free Shipping store-wide contributes to better listing placement “scores” in searches.
  • Attributes and shop sections factor into search, along with titles and tags, contributing to listing placement “scores” in searches.
  • Newly listed and renewed items contribute positively to listing placement “scores” in searches.
My Ten Commandment Wall Art listing scores higher than the 3 that ship for free

So even though Etsy is trying to push the idea that a guarantee of free shipping will increase my odds of visiblity, I can clearly see that Etsy’s SEO algorithm  considers listing placement on a case by case basis.

Imagine if you will, a search engine built and designed to factor tons of possible variants, from searched phrases to image quality (trust me, you’ll hear about this one soon). Now imagine the Etsy SEO team retarding all of the relevant factors that have enabled Etsy shoppers to find and purchase items over the last 14 years to now only factor in shipping costs.

Imagine that… I might call it SEO suicide.

It’s based upon this confidence that I’m not going to read too much into this placement business. But just in case, I’m going to move ahead with my Plan B.

Etsy gave us this great tool for duplicating listings, so I’m running a test. I’ve taken 3 of my top sellers and copied them, rewritten their titles, descriptions and given them alternate (but relevant) tags. I’ve also increased their prices and removed shipping costs.  What’s interesting is that over the past couple of days, they have gotten equal views – no purchases yet.

Two listings – one offers free shipping and the other does not. Both appear on the first page, interestingly.

As of now, they are currently both on page one, with spatterings of listings that do, and do not ship free among them.

The reasoning behind this was to have reach on the first page of search, regardless. If a buyer waves past it because they assume it’s a mass-produced item, no biggie. They’ll probably end up on the next few pages of search and see it again (this time with shipping costs), and hopefully bite. I know, believe me – this sounds ridiculous, but everyone who’s fighting this campaign insists that the Etsy buyer doesn’t want or care about free shipping. But as always, Etsy’s empty promises leave me wondering.

Who knows, maybe I’ll be able to prove them right… or wrong. Only time will tell.

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5 Replies to “Free Shipping and Etsy”

  1. Thank you Noelle for your thoughtful and well researched article. As we had discussed I can’t help but be disturbed by the idea that my rolling over shipping costs into the listing price would do nothing so much as increase the amount of money Etsy was getting when they take their percent of my sale price. Their suggestion that we do so “or else” could provide a bump in their take wether they actually implemented the practice or not. It left a bad taste in my mouth.

    Reply

  2. Shipping as always been a issue for me. Canvas is always more expensive. You can now click on free shipping option and sales. So now I feel I have to run sales and free shipping. Not to mention some buyers selling inferior art at a much much lower ridiculous price. I am happy when I get sales on my website because I know they want my work not the cheapest price.

    Great article!

    Reply

  3. This is a very enlightening read. I will have to read it again, but I really appreciate all the information you have shared with us. I went along with the free shipping and had them batch price my work. It doesn’t seem to have made any difference in my clicks.

    Perhaps I will go back to my original format and see what happens…..

    Reply

  4. Well written, very formative. As a consumer I often look for free shipping my self. But I also look at the total cost with or with out free shipping. As a seller certain items I have on eBay I have free shipping. But these are items I don’t have much on them. But with items I make and have on Etsy or finerworks I don’t offer free shipping. Sorry I have to pay shipping and final fees etc. So I should not be punished if I don’t offer free shipping. I can raise my selling price to include shipping if that’s what Etsy wants just to make consumers happy. Etsy, eBay, finerworks, me, you we’re all in this to make money or we wouldn’t be doing this. Any of my art listing would be a compulsive buy anyway or a picture that Sparks a memory and you just have to have it kind of thing. So I don’t think people will worry to much about shipping. Maybe?

    Reply

    1. I am surprise that thier are zero amount of people upset over Etsy not allowing sellers to use thier own papal account for sales.. I just stop using Etsy when they out of the blue suspended my shop because they wanted me to accept payment through thier plan…

      Reply

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