My take on Etsy's Free Shipping Guarantee, final part - Why I Turned it Off

In the last few posts we've talked about the pros and cons of Etsy's Free shipping guarantee (TLDR version: it's a good thing and you should try to price to accommodate it.) but I'd like to end with a post sending some questions out there. I've emailed Etsy a couple of times but have never heard back, so I'll just get these thoughts out here and hope they'll be resolved in the future.

Again, let me emphasize, I love the fact that Etsy is urging us to think about offering free shipping. It bugs me when someone thinks Etsy is "forcing" shops to offer free shipping ("pushing free shipping off on shop owners" is another term I've heard. Ugh, c'mon people!) or that it's "unfair" of Etsy to place shops with free shipping higher in the search ranking. We don't get mad when Amazon or other online stores do the same thing because it's convenient for us as shoppers. Why not make it as easy for your customers to find you and buy from you?

Anyway. Onward before I digress all the way back to the first post.

In the last post I ended by mentioning that I turned off Etsy's Free Shipping Guarantee for my shop.

There is one thing that bugs me about the Free Shipping Guarantee, and that's the lack of customizations available. I'll describe my problem:

My minimum purchase amount for free shipping varies depending on the time of year and whether I have special packaging (so things don't get melty). Right now I offer free shipping on all purchases over $15. That might go up or down in the future, but I love having the freedom to change it myself.

Etsy's Free Shipping Guarantee doesn't allow this. The minimum is set at $35 and you can't lower it. (When Etsy set up a survey about this before they implemented free shipping I even suggested a nifty slider bar. I'm so disappointed that it didn't happen.)

In my case, I have to offer free shipping using a sale or coupon. Etsy doesn't recognize this as a free shipping offer- only items that are already free to ship are eligible to be higher in the search rankings. And what's worse, I can't have the free shipping guarantee on and have my own coupon for free shipping at a lower minimum. The free shipping coupon doesn't apply to items with a free shipping guarantee. 

In short, my free shipping offer is better than most offered on Etsy but I don't get the search ranking perk. Not placing high up in the search rankings for opting out of the guarantee is definitely not a punishment. But not placing in the search rankings because you have a better shipping guarantee than Etsy that just isn't accommodated by their setup kinda feels like an oversight at the very least.

I've asked people to explain and nobody has been able to help me understand the logic behind the locked $35 minimum. Is it because of Amazon's minimum? Then why lock it at $35? Are they worried that shop owners would expect a higher ranking in the search if their shipping has a lower minimum and that seems too complicated? 

Maybe they just didn't like the slider bar idea.

(Pshhh, impossible! LOL!)

In any case, I really hope Etsy allows us to customize our free shipping offers in the future. Until then, I'm going to make it my goal to improve my SEO, photos, and marketing, including building my email list instead.

Have you already implemented free shipping, or are you making different improvements to drive traffic to your Etsy shop?

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Etsy's Free Shipping Guarantee, part 3 - Things to consider

Happy October! :-) To recap- in parts one and two  we've already discussed why Etsy offering free shipping is a good thing and why we shouldn't panic if we decide not to turn it on. Today I'd like to chat about two points that are closely related to the issue of free shipping (aka, if you have a product based business, these two points should be considered even if you're not on Etsy.).

Want to offer free shipping? Don't feel like you can? Two things that should be on people's minds since Etsy has us all thinking about it:

1. Etsy's introducing free shipping should be a reminder for all of us to check our pricing.

You are checking your pricing at least once a year

... right? Experts suggest checking your pricing every quarter or even once a month. But pretty much every day I see posts from people who set a price arbitrarily and/or have never recalculated their pricing.

Sad fact: most handmade businesses underprice. 

Maybe they use the "materials plus labor times 2 equals wholesale, double that for retail" pricing formula alone, or maybe they have based their pricing on someone else's pricing, or maybe they started out pricing low due to their local economy. Then they keep telling themselves "I can't charge any higher, people won't pay it, I'll lose my customers", etc.

If you are a maker and you don't feel you can ever offer free shipping, there's a good chance your overall pricing is too low. The cost of materials, overhead, and the cost of living goes up daily, yet a lot of us think we have to keep our prices the same for years, sometimes even decades, to be "fair".

"I can't ever change my pricing" is a myth that kills a lot of businesses.

When relatively small things like Etsy's program for free shipping over $35 come along and people freak out because their business just can't support it, their pricing is possibly to blame. 

Here's an easy-read book recommendation: "Pricing For Profit" by Kendra Cote. It's for bath and body product makers mainly, but the principles apply to any business and it will completely change the way you think about, and calculate, your pricing.

But wait... *fake shocked gasp* Is it ethical to tell people their shipping is free while they're basically still paying for it in your pricing? I've come across this issue a few times in recent months. This leads me to #2...

2. If you check your pricing and decide to turn on Etsy's free shipping guarantee, you aren't ethically obligated to eat the entire shipping cost!

Why does this come up? There has been some debate about the term "free shipping" and some business owners have a really negative feeling about it: "If it's free, the customer should not pay even one cent for it. I have to pay it." If you feel that way, it can still work! Especially with Etsy's reasonable baseline of free shipping after a $35 purchase.

When I decided to offer free shipping over a certain purchase amount I changed my packaging a little and found a faster way of doing a few things in other areas. I had already raised prices previously (to actually pay myself for the first time in ten years, don't get me started on that story...) so free shipping fit into my pricing with very few changes.

If you feel the need to pay shipping instead of spreading the estimated price out over several items, don't be tempted to just pay the shipping out of pocket. See if you can make your supply and materials costs, labor costs, or overhead percentage stretch just a little more to help cover it. 

If you are thinking of raising your pricing to help accommodate Etsy's Free Shipping Guarantee, (or if you'd like to offer free shipping even if you're not on Etsy) don't feel guilty that you're not paying out of pocket for shipping. Buyers don't mind that we don't justify how we break down our pricing. When was the last time you walked into the store and demanded to know why their prices went up, or for a breakdown of their costs? No sane person does this... yet many business owners worry constantly that they must justify their pricing or explain how they can offer free shipping. This can cause pricing paralysis, stopping you from ever raising prices. (aka, slowly killing your business.)

"Free shipping" conveys to shoppers "shipping is included in the price you see up front". In other words, no matter how much they purchase, they won't get to their shopping cart and find an unexpected astronomical shipping cost on top of what they're already spending. (Cart abandonment comes from this more times than any other factor.)

Here's something to think about: Whenever a company (big or small) offers you free shipping, your shipping has been factored into the costs you pay. Did they raise prices a little over their whole product line? Did they find one or more of their raw materials at a better price? Did they skimp a little on quality to make up the cost? Since companies never disclose to us how they price their products, we never know- but most of us would agree that we'd prefer the first or second option. It's okay to do the same in our businesses. (Just stay far away from option three, amiright?)

Okay, so now that we've talked a bit about the financial and ethical side of Etsy's Free Shipping Guarantee, and you have seen how happy I am with the idea, the final topic might come as a surprise:

Why I turned it off for my shop!

Talk with you again soon!

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