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there have been lots of reports about how free shipping is a huge incentive among buyers when choosing a vendor.

but I think consumers are probably sensible enough to know if free shipping is silly expectation. If one is trying to order a large TV for example, they know it's going to be expensive to ship because of the weight, and probably don't expect it to be free.

There are likely ways to get around the problem in general. You have to have a profit margin or there's no use in selling, but you also have to be competitive. The "take a loss" strategy works for the big boys on Black Friday b/c they know if they get customers into the store for the great sale items, they'll likely buy other things not so discounted and make up the difference.

An online shopping experience is different, and my guess is that there are lots of one-timers and only-the-sale-price thing buyers, so I'm not sure how effective offering free shipping on specific products would be, but it may be worth a shot...Say if they're going to buy this one thing, you could offer free shipping on this other thing or if they buy two, they get free shipping...be creative

The price point thing, which someone brought up below as not being so important, I agree and disagree with. Yes, a relationship is hugely important and your strategy is your strategy--targeting a few with money or a bunch who don't have much. In real life, for me, there are certain stores I stay away exatly because of price. Sometimes it's because they're exclusive stores and they are priced that way to keep riffraff like me out; sometimes they're just ridiculously priced in general and I wouldn't care how much I liked the store, I wouldn't buy something there at ridiculous markups. Blame my mother for training me how to get the best deal on anything.

So, to further that point, say for example there are two online stores selling prints of a painting I like. Store A has it for $200 and shipping is $50, and Store B has it for $250 with free shipping. What's the difference? Not much. I would notice something like that and flip a coin. Another consumer might bite on the free shipping, or bite on the $50 discount. I think this is where one of these stores would need to carefully consider their profit margin and see if they can adjust it AND AT THE SAME TIE see if they can make better shipping arrangements AND AT THE SAME TIME negotiate better terms from the manufacturer/middleman. If Store B could continue to offer "free shipping" that used to cost $50 but now costs $40, and was able to trim off $10 from the profit margin/cost of the product, that's $20 off the product. They've undercut the competition by that much, and can now offer the print at $230 with free shipping or $180 and $50 shipping --whatever pricing scheme looks best to you ($200 and $30?) and perhaps maximize on all scenarios...this isn't always possible, so not a cure all, please consider your own business model and limitations.