Should you offer free shipping?
Free shipping is not a discount and it is not a fee trick. It is a decision to move the postage cost from the buyer's basket into your price — and whether that costs you anything depends entirely on what your platform charges commission on.
On Etsy, eBay and Amazon it makes no difference to your fees
These platforms charge commission on the total the buyer pays, including shipping. So $30 plus $6 shipping and $36 with free shipping produce the same revenue, the same fee and the same profit.
| Line | $30 + $6 shipping | $36 free shipping |
|---|---|---|
| Buyer pays | $36.00 | $36.00 |
| Transaction fee (6.5%) | -$2.34 | -$2.34 |
| Payment processing (3% + $0.25) | -$1.33 | -$1.33 |
| Listing fee | -$0.20 | -$0.20 |
| Item cost | -$12.00 | -$12.00 |
| Shipping and packaging | -$6.00 | -$6.00 |
| Net profit | $14.13 | $14.13 |
Identical. If your platform charges commission on shipping, the fee argument for or against free shipping does not exist — it is purely a question of what converts better.
On Poshmark and Vinted, baking postage into the price costs you
These platforms charge commission on the item price only. That changes the arithmetic, because every dollar you add to the price to cover postage is itself commissionable. At Poshmark's 20% rate, absorbing a $6 label by raising the price adds $1.20 in commission on top of the label itself — 20% of the amount you raised.
The practical rule: where commission applies to the item only, keep shipping as a separate charge if the platform lets you. Where commission applies to the whole order, choose whichever converts better and stop worrying about the fee.
What actually changes when you switch
- Conversion, usually upwards. Free shipping removes a step where buyers abandon the basket after seeing the postage. This is the honest reason to do it, and it is measurable: run it for a month and compare conversion rate, not revenue.
- Return exposure. A refund is calculated on the higher price. If you raise the price to absorb $6 of postage, a return now refunds $36 rather than $30, and postage both ways usually comes out of your pocket. If you run a 4% return rate, put it in the returns reserve field before you decide.
- Your position against competitors. The comparison buyers see is the item price, not the total. Raising the price to $36 can make you look expensive next to a competitor showing $30 and $6 shipping, even though the buyer pays the same.
- Basket size. Free shipping above a threshold is a different tool with a different purpose: it is an upsell. It works when you have a product at a price point that gets the buyer most of the way to the threshold, and does nothing otherwise.
Test it instead of arguing about it
Take one product, put your real numbers into the Etsy fee calculator or the Poshmark fee calculator, and compare the two scenarios directly. Both show net profit and a break-even price, so you can see exactly how much room you have before the change starts costing you money.
Then change one product, not the whole shop. A single listing gives you two weeks of data without risking your margin everywhere at once.