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Free Shipping vs Discounted Price

Free Shipping vs. Discounted Price! Marketplace Fulfillment Strategy Wars

One can enrol as sellers on various marketplaces and expand their reach as a result. They use the fulfilment services offered by the marketplaces and ride on their infrastructure to reach the customers. However, in addition to all the conveniences provided, the sellers face the challenge of winning the competition. Nothing but the best quality products and the best services focused on customer delight can help gain an edge over the competitors. 

In addition to product and service, the sellers have to be aggressive on the promotion and pricing part. Pricing is one of the trickiest things to tackle. It does involve playing a lot with the minds of the consumers. All consumers have a different take on the price tag. Some associate the price with the quality; others come to market places only to find the cheapest deal.

Free shipping vs. Discounted Price – when to choose what

Free shipping comes as a competent driver of customer experience, especially when the products are bulky. You can find two types of offers – The first is free shipping, and the product’s price will be a bit higher. Second, the shipping charge will be displayed, but the product price will be showing a discounted figure. 

Free shipping – aggressive promotion strategy

Free shipping drives positive customer sentiment when the festive season is around. People tend to buy in bulk; they are also more interested in purchasing home décor materials, electronic items, and furniture around the festival. So, free shipping looks like an excellent deal to them. Second consumer psychology that comes into play is that of associating price with the product quality. When they find the price a little higher and shipping charge as nil, they perceive it as a better quality product reaching them at no additional cost.

Discounted price fulfilment strategy – a strategy of uplifting the sale

Products that have shown a decline in popularity in recent times can be revived by adopting the discounted price strategy. Many times, the products once very much in demand start showing a downward trend in popularity. It can happen due to:

  • The new enhanced version introduced market
  • Same product available at less price in some other marketplace
  • Seasonal application of a product

Of these reasons, the one that is solely due to competition is pricing in other marketplaces. The sellers need to devise a different pricing strategy for the products according to the customers’ profiles of various marketplaces. They require fluctuating the price up and down to cater to the needs of all types of customers and generate more sales in return. What works on Amazon may not work on other niche marketplaces. So, the buyer’s attitude is the prime factor that impacts the effectiveness of a discounted price fulfilment strategy.

Read also :Understanding Multi-Vendor Marketplace Revenue Streams

Is there a universally accepted strategy?

The answer is – No. Pricing is affected by various factors. Sometimes, the sellers need to switch to a minimum order value strategy to achieve profits while deciding the pricing strategy. At others, they need to ensure that the pricing is not dropped too low to adversely affect the perceived value. Also, it should not be too aggressively cut to hurt the seller’s profits.

Similarly, free shipping may not be a lucrative offer for readily available products or portable nature products. So, price the products according to the marketplace, and go for free shipping policy strategically. Therefore, take all the factors involved in consideration and then pick the strategy to stay in the game.

mCommerce Fanatics

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