Free postage: is it really free?

free delivery

I still remember the shock of paying for postage when I first shopped online. At the time, not many e-commerce offered free postage, and often it was hidden until the last moment.

Today things are a lot better, and stores have learned that it is good practice to show postage cost up front. However, the postal cost in Australia is still one of the most expensive in the world. Especially when you try to send a small package which fits in a padded envelope, as soon as its depth is more than 2cm, it is considered a package and therefore, the postage cost starts from $6.95. The cost of sending overseas is even more shocking. It is almost always cheaper to send stuff home from overseas than the other way around.

For those of us who really want to offer the best customer service and offer free postage, we have elected to absorb the full postage cost. At Global Handmade, I initially offered free postage on all orders, but soon realised that it’s not feasible. The current policy is to offer free Express postage on all domestic orders above $50 and on all international orders above $150.

Now you might ask, is the postage really free, or is it built into the price? Since I started the business, I’ve gradually learned that the price of a product has little to do with its cost and a lot to do with the demand and competition. In other words, I needed to guess whether a cheaper price or free postage was more attractive to consumers. I asked my customers what they preferred, and free postage stood out as a clear favourite. I believed this was because the prices Global Handmade charged were already very competitive.

Then I did something crazy again. I decided to offer free return postage and allow 365 days for customers to change their mind. I took a risk. I saw it as a necessary risk, because I had full confidence in the quality of our products, and I wanted more people to give us a go. By providing a risk free trial, I’m essentially saying, “I bet you’ll love it”.

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