A few days ago, Josh Silverman the CEO of Etsy announced that they will do an algorithm update on July 30th, 2019 that will give priority to listings with “free shipping”. Many Etsy sellers are angry about this change and I’ve had several people ask me how I feel about it.
Truthfully, I have mixed feelings. On the one hand, you can’t blame Etsy for the change in expectations of online shoppers. Amazon Prime has changed the landscape of online shopping and consumers have gotten accustomed to fast, free shipping. Many people choose whether or not to buy a product based on shipping and Etsy is making this decision based on market changes.
On the other hand, I agree with the argument that Etsy isn’t doing a great job in recent years communicating with consumers on what makes purchases on Etsy special, which is the fact that all items on Etsy are handmade or vintage.
Although people really like free shipping, most of the time it’s a facade. Sellers on Etsy and other platforms change the price of the item to include the shipping and often buyers in close proximity to the seller end up paying more than they would have if the shipping had just been calculated separately. Even though many consumers understand this, they still make buying decisions based on shipping. There is a couple of reasons for this:
- People don’t like unexpected charges at checkout. When someone is viewing an item online and it’s one price and they mentally accept that price, they often will bail out of the shopping cart when they see the shipping charge. I’ve done it and likely you’ve done it too. There are often good reasons for a larger shipping charge, for instance, I’m in Maine and if the item I’m looking at ships from California or somewhere on the west coast. Logically I understand the charge but if I’m on the fence about buying the item anyway, this extra charge is likely to push me toward no.
- People like the value of the item to be higher. This is especially true for handmade! An example I use in my book “Guide to Marketing Art & Crafts Online” is that people feel really great about drinking out of a $40 handmade coffee mug, but feel less good about drinking out of a $30 handmade coffee mug that cost $10 to ship. It’s a psychological thing. People have less of a problem paying the extra $10 for the value of the piece but not for the shipping.
On Etsy, I plan to play the game and add the shipping cost into the price of the item so I can offer “free shipping”. On my website, I do not offer “Free Shipping” but I often ship for less than it actually costs so I don’t loose the sale over it. Free shipping does not work on my website because I often sell to local people and have a “local pickup” option that doesn’t charge any shipping costs. Because I have my website as an option for local people, this change by Etsy, isn’t a huge concern for me.
In my opinion, the real moral of the story, is that people shouldn’t solely rely on a 3rd-party platform for their online sales. Everyone should have a website that they drive traffic to and that they can control. Online sellers need to be able to make decisions that make sense for their own business and relying solely on a third-party platform just doesn’t allow for this.