In an auction setting is there such a thing as "free shipping"? Or do buyers bid more for auctions with free shipping thus increasing the price of the item?
For this study we compiled the prices for roughly 100 auctions for Madden 13 on Xbox 360 during the first week of availability. There were 28 auctions with free shipping and 70 auctions that charged for shipping. Below are the results:
The average shipping charge when it was applied cost $3.38 for a total cost of $52.73. Only two cents less than the game with free shipping, and no statistical difference between these two averages.
Free shipping on eBay does not save a customer any money at all. It is simply perceived as a better value.