- Etsy announced on Tuesday a new initiative to encourage its sellers to offer free shipping on orders over $US35.
- The cost of shipping would be baked into the purchase price.
- Sellers would be rewarded with enhanced visibility in customer search.
- CEO Josh Silverman said that free shipping is now “table stakes” and that customers are more likely to click the “buy” button on an item with free shipping.
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Etsy is trying to make free shipping the norm.
On Tuesday, the online marketplace for vintage and artisan goods announced a new initiative designed to help make it easier for sellers to offer free shipping for customers. Under the new program, sellers can sign up to offer free shipping for any order of $US35 or more.
“Buyer expectations have evolved a lot over the past few years,” CEO Josh Silverman told Business Insider.
“Breaking out the shipping costs and rubbing it in a buyer’s face has meaningful friction in the purchase process. … Our job is to give our sellers the tools to make it easy for them to meet this evolving buyer expectation.”
Sellers that participate will be rewarded by being ranked higher in search results on Etsy starting July 30. According to an Etsy press release, the top search results will always have free shipping.
To offset the cost of free shipping, sellers are encouraged to treat it like they would any other cost – by baking it into the retail price.
“We know that this is going to be a lot for sellers to absorb – it’s a real change in how they think about pricing. We want them to think about shipping as just another cost, like the cost of their materials and the cost of their time,” Silverman said.
Etsy is doing this because free shipping is now “table stakes,” according to Silverman. Customers expect a consistent experience, even across marketplaces like Etsy.
Buyers are 20% more likely to purchase items with free shipping versus items with an added shipping cost, according to Etsy’s data.
For Silverman, it’s not about empowering Etsy’s sellers to compete with giants like Amazon and Walmart, as due to the handmade, unique quality of Etsy’s products, that would be difficult.
Instead, it’s about setting consistent expectations for buyers and sellers on the website.
“I’m not sure [Etsy] will ever be the place where items arrive next-day by drone. That’s not who we are. But I do think that setting clear expectations about when they will arrive is very important for us,” Silverman said.
“I don’t know that we ever win on shipping. We’ve just got to stop losing.”
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