Etsy made some waves with their July 2019 announcement about free shipping options and the affect that offering free shipping will have on search results and ultimately sales for sellers. Here is what you need to know about Etsy’s free shipping announcement.
1. Etsy has been preparing us for this free shipping change for some time.
Back during the holiday season of 2018, Etsy started pushing free shipping as something that sellers should think about offering. From running contests, promotions, to sending out guidelines in the Etsy Guide to Search about chopping shipping prices in half and adding ½ back to the price, Etsy has let us know that they like free shipping.
This past May they even ran a limited promotion that allowed some shoppers to receive free shipping on orders that met a certain amount spent. They were testing to see what shoppers would do. They have also made statements about things coming in the future that would allow customers to not experience sticker shock when the went to checkout and discovered the shipping cost. They’ve been prepping us.
2. Etsy does not expect you to just eat your free shipping costs.
Etsy has specifically said that they do not expect sellers to just eat their shipping costs. Whew! That’s a relief, right? That’s not a profitable model for a seller. And unprofitable sellers don’t stay in business. Etsy really needs you to stay in business or it won’t have any search results for customers.
What Etsy wants you to do is begin to think of the shipping and handling costs as part of the cost of doing business, the same way you factor in your supplies, your tools, your electricity, your workspace, into your products. While it is a shift in mindset, they do not expect you to lose out on shipping.
3. Etsy will be releasing tools and guidelines to help sellers navigate this process of offering free shipping.
One thing we can usually count on Etsy for is detailed guidelines and best practices. Last year, the Guide to Etsy Search, was very specific in their recommendations for titles, vacation mode, tags, and everything in between. When you do well, Etsy does well. And they know there is going to be concern and confusion.
They’ve developed tools to help you navigate this process. And guidelines to help you understand the impact to your shop and the pricing strategies to help you deal with these changes.
4. Etsy will change to prioritize listings that offer free shipping in search.
This is the biggie for most sellers. Etsy has specifically said that the top results in search will be made up of those that offer a free shipping option. What does that mean specifically? Well, if Etsy is true to their word, then this will be a big factor in their algorithm about where items will place in search results. How big?
We are going to have to see. But if they are serious about this, it will be big. And if you are serious about being found, then we will have to learn to play by Etsy’s rules. These are Etsy’s customers that they choose to point to us as sellers. We need them to find our stuff.
5. This applies to search results for US shoppers.
Right now Etsy has said that this applies to results in search for US shoppers. So if your customer is searching in the US, then this would affect your items. If most of your shoppers are searching in other countries, then likely they would not see a difference. But we don’t know for sure.
We have many Canadian sellers in our coaching groups and they sell primarily to a US audience. I know this has them worried. But there are strategies we can use to make our items competitive and still roll the cost of shipping into our items. This is one reason I teach to have a social media following to push traffic to your Etsy store.
This is one reason why we develop a loyal local and online customer following. And one reason why we reach out for other streams of revenue, whether it be our Facebook pages, Facebook Groups, Amazon, Etsy or our own websites.
6. Etsy believes that offering free shipping will increase sales for sellers.
Etsy is a business. They have goals and needs. As sellers we have to understand those to try to understand why they make the business decisions that they do. Etsy has two customers. They have their sellers and they have their buyers. They have to try to make both happy. I talked a lot about this in my pros and cons of Amazon Handmade and Etsy piece. I see this as a course correction from Etsy doing a ton to attract sellers and not as much to attract buyers. Buyers like free shipping. Etsy’s own numbers show that buyers are 20% more likely to complete a transaction if the shipping costs are rolled into the price and they are getting “free shipping” As sellers, we need those buyers too.
Why would Etsy change to prioritize Free Shipping?
Etsy has been experimenting over the last several years with how buyers respond to shipping costs. They’ve tested small badges on listings that identified them as free shipping in search. They’ve offered incentives to sellers to have free shipping on listings. They’ve tested offering free shipping with spending limits.
Their results show that customers are 20% more likely to complete a purchase when the item has free shipping. And they’ve shown that customers will add more to their cart to get free shipping.
Bottom line…more gets spent when free shipping is in place. More sale means more in Etsy’s pocket. Etsy explains more in their video announcement of the change.
How can a seller afford to eat the shipping costs?
They can’t. At least not long term. And Etsy knows this. They want sellers to change their mindset and start considering shipping charges as part of the cost of the product. Their data seems to indicate that this is the way customers are more likely to think of shipping and want to complete their purchases.
What are the benefits for a seller offering Free Shipping?
If Etsy does what they say they will do, then sellers who offer free shipping should rise in search.
Etsy has said, “Starting on July 30, 2019, items that ship free and shops that guarantee free shipping to buyers in the US on orders $35 and above will get priority placement in US search results. Shoppers in the US will primarily see items that ship free and shops that offer free shipping on orders of $35 in the top, 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.”
It doesn’t get much more clear than that. The benefit to you rolling your costs into your price may be that you actually get seen.
What should a seller be concerned with about Etsy’s free shipping change Announcement?
Sellers should be concerned about not rolling their shipping costs into the prices of their items. That isn’t sustainable. It’s a way to run yourself out of business. You will have to change your pricing structure, and Etsy has promised some tools to make that easier for you, including a bulk editing tool and some pricing guides.
But even with that there may be some wrinkles to iron out. If you live on one side of the country, shipping large and heavy items to the other side of the country is always going to be more expensive than shipping inside the state where you live. Makers of larger pieces are concerned that it may be difficult to decide how much to add back in to the price when their shipping costs can vary so widely.
What questions do seller still have?
In our free group and our membership our fellow Etsy sellers have been asking a ton of questions in response to Etsy’s announcement. But what it boils down to is a very basic question of “how will this affect my shop?”
(Note: Many of these questions don’t have full answers yet. But I’m including them here with my thoughts so that we can update as we know more and to give you and our fellow Etsy sellers some thoughts to consider as we all navigate these changes together.)
Is Etsy really going to promote free shipping listings higher in search than other listings that don’t have free shipping? Or is this just a ploy and they are hoping that everyone panics and switches to free shipping?
They say they are. And with all the research they’ve put into this, I would be surprised if they didn’t. We don’t know exactly what weight free shipping will give, but they’ve said that the top results will be filled with free shipping listings.
How will the search algorithm prioritize free shipping listings? Will it be a small boost or a big enough boost to outrank items with more sales history, better tags, better titles?
We really don’t know the answer. But if Etsy is going to put all this work into informing us, I would expect it to be a big boost. We will have to see where that leaves listings. There are a ton of factors that Etsy considers when it uses an algorithm to rank listings.
SEO can be complicated. But, they are coming out and telling us that this will be a big, if not the biggest ranking decision maker. It remains to be seen what that looks like.
Should sellers just put some of their smaller items or bundles set to free shipping and try to get buyers in the door of their shop through search hoping they will stick around and come back to buy other items regardless of free shipping or not?
This is a strategy that you could try. I would definitely put some of your top sellers on free shipping to not lose out on your ranking. A small drop in ranking to even the second page can be enough to devastate income when you rely on that top seller. It will take some time to see what strategies work best for shops with wide variations in shipping prices.
How will Etsy’s tools help sellers and make this process easier? Or make it so that we don’t eat costs and go out of business?
Etsy has said that they want to help sellers. They’ve “created a new smart-pricing tool that lets you guarantee free shipping to US buyers for orders of $35 and above.”
And they’ve also said, “We also made it easy to bulk edit listings for items $35 and up so you can adjust your item prices and recover your shipping costs. This tool will become available to US sellers within the next week and to sellers outside the US in August. Keep in mind that how you determine and set prices is up to you. Coming soon: If you have items priced under $35 and want to offer a US free shipping guarantee, we’ll offer personalized education on how to consider repricing those items to help recover shipping costs.”
Remember that if you don’t make sales, then Etsy doesn’t make money. It’s in their best interest to help you.
If a 2’ by 3’ sign can range from $25-$55 to ship depending on where it is going, how can I effectively price when I don’t know in advance who will be buying or where I will be shipping it to?
That is the million dollar question. And one we hope that Etsy will provide some more guidance about. I think that those who sell larger items and live on the coast will have the most interesting time figuring out a strategy that works.
What should I be doing to make sure that I am pricing effectively and not pricing myself out of the market with this change by Etsy?
You should really know your profit margins. Real businesses know their profit margins. Hobbies don’t. Not knowing these is one of the main reasons that businesses fail. You also need to know the pricing of your main competition. And you need to know and understand your real shipping costs. Do that legwork now.
Who is this free shipping change going to benefit?
Those that sell items that can ship first class or priority flat rate will likely not be super affected. They will know their cost to ship and just be able to add it in to their pricing. This could also benefit more seasoned sellers who have a firm grasp of their pricing and profit margins. They are going to know where they sell the most items.The cost to ship their items, etc.
But this could also be a huge benefit to more recent sellers. It can be hard to climb in search against shops that have been selling longer and have more sales history. Depending on how the algorithm works, this could be a boost for younger shops.
Will variations make a difference? For example if I have different sizes of items and offer free shipping on the smaller ones, but not the larger ones, will that count enough to be seen but not leave me having to estimate my shipping costs for larger items?
It’s possible. We just don’t know, yet. It will depend on how Etsy’s bulk edit tool allows you to alter and change the options…and how the algorithm sees that item in search results and decides to show it.
Should I just leave Etsy and change to get sales on my website instead?
Here’s the thing. Etsy has built in customers. If you have a huge social media following, a mega email list that is engaged and buying from you, or a Pinterest strategy that is sending mega traffic to your site, then by all means, walk away from Etsy if you don’t want to deal with it.
But the fact is that a lot of people get shocked when their website doesn’t make them any money. You have to drive traffic to a website. Etsy has traffic that it gives to you in exchange for following its rules.
Does this change how you feel about Amazon Handmade vs. Etsy?
No. It’s all about the customer experience. If you think Amazon doesn’t change things up to provide better customer experience, you’d be wrong. They send out guidelines frequently to update their best practices. Do I feel like it’s as frequent as Etsy? No. It’s one reason why I love Amazon Handmade.
But there are pros and cons to Amazon Handmade and Etsy. I still recommend that people start with Etsy. And I never really recommend that you quit a platform unless you really don’t need or want the sales from another stream of revenue.
Most of my sales come from social media. Do I even need to worry about Etsy’s free shipping change?
Probably not. But, maybe. If you don’t care about optimizing your listings to be found in search, then don’t worry about it. But if you like being found in search results, you will need to think about changing your listings to be free shipping. And if you ever want to increase sales then you will need to pay attention.
What if we just all refuse to change to free shipping?
That’s not going to happen. We are in this business to make money doing what we love. And refusing to play by Etsy’s rules has the potential to cut us off from sales. I’m not going to cut myself off from sales. Are you?
What about international shipping?
Etsy has said that his is a change for US shoppers in their search results. But, it is possible to offer free domestic shipping and add a flat rate to Canada or other overseas locations. Honestly, overseas shipping is expensive and customers expect that. They are used to it. They will either buy or not based on their budget. Just make sure you aren’t eating shipping costs.
I just raised prices this year due to rising materials costs. Now I need to raise them again? Will customers get sticker shock and just not buy?
It’s possible, but keep in mind that to be seen next to you, shops will have to have similarly offered free shipping. If they choose to keep their prices the same and offer free shipping then they will go out of business quick. Nobody can work for pennies on the dollar.
But if, as Etsy is recommending, they add their costs into their product, then yours and theirs should be in line with each other. That will be the price customers have to pay. And Etsy says they will be 20% more likely to buy knowing that is their final price.
What about returns? Now I’ll have to eat that?
If you only offer returns for mistakes or damage then this shouldn’t affect you too much. Mistakes and damage deserve full refunds unless you want to run the risk of a bad review. With a damage claim at least you will have insurance to help cover the cost.
Many other countries have much more lenient regulations about returns, but that is something we’ve always dealt with as sellers. If your business has a ton of returns, then you need to look at where the disconnect is in your listing information or quality and fix that to create a great customer experience.
Won’t customers just scroll down past the free shipping options or use the filters for price to find a lower price?
Actually most customers don’t do that, which is why the top results get clicked on the most. As customers we don’t like to read. We don’t like to search. We want the perfect thing handed to us with as little trouble as possible. And if it is the perfect item, we will buy it.
I’ve tried offering free shipping before and I never got any extra sales from it. Why should I do it now?
Etsy is still going to use an algorithm to sort results based on what they think people will actually click and buy. If your pictures aren’t great, your tags aren’t great, your titles aren’t great, you have bad reviews, etc…then you probably won’t get seen even if you have free shipping.
Also it’s possible to show up in search results but never be clicked on because your listing doesn’t fit what the customer wanted. If you aren’t getting sales, something needs to change…but it’s not necessarily Etsy that needs to change.
What questions do you have about Etsy’s free shipping announcement! Let us know in the comments or jump over to join our free business group where we are discussing it with all the Etsy sellers and creative makers!
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