The effects of free postage

No primary category set

Businesspundit points out an interesting article from Harvard Business School, which might add to the perennial debate amongst eBayers as to whether ‘free’ (i.e. included in the headline price) shipping fees are a good idea:

A “simple” all-inclusive price will lead buyers to focus on the main benefit offered, while partitioned price formats (main price + other charges) stimulate people to look into the details of what they get for their money. Thus, price framing can be used as a tool to induce consumers to acknowledge additional points of differentiation: a convenient shipping method or a useful service plan, for example.

With eBay, like many other online shopping sites, pushing free postage this Christmas, this seems to suggest that ‘no shipping fees’ isn’t quite the universal panacea that people take it for. In my experience, the most important thing is clarity, quickly followed up by simplicity: a buyer who needs a calculator to figure out your postage prices is a buyer who’s hit the back button.



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