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Paying more for free shipping

One of the things that fascinates me most about business is how counterintuitive it can often be.

Here’s a great example from Reddit, where someone selling exercise equipment online tested different price points and found that offering free vs paid delivery made a massive difference.

One test:

  1. $19.95 + free delivery
  2. $17.95 + $2 delivery

Same price for the customer in the end, but the first variation had 2.4x as many sales (26 vs 11).

Another test:

  1. $29.95 + free delivery
  2. $19.95 + $2 delivery

This time the first variation was way more expensive overall, but somehow resulted in 1.7x more sales (15 vs 9).

This probably doesn’t hold true for all businesses, but it goes to show how important it is to test your assumptions. You can leave a lot of money on the table by doing only “what makes sense.”

What’s one quick assumption you could you test in your business? 🤔

Updated: August 29, 2023

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