How to Offer Free Shipping: Options and Strategies
The success of any free shipping strategy is based on shipping fees paid and profit margin.
If you are thinking about implementing this option in your online store, find out what factors you should consider before taking the plunge.
How to Offer Free Shipping in E-commerce
There are two main ways to offer free shipping: Conditional or Unconditional.
- Conditional: sets conditions for free shipping, such as reaching a minimum order value, purchasing selected items, etc.
- Unconditional: zero delivery costs for all items and all orders.
Which method is best for your online store depends on factors such as profit margins, shipping costs and competition.
When and How to Offer Conditional Free Shipping
Despite the marketing benefits, it’s rarely a good idea for small sellers to provide free shipping on all products.
Your e-commerce store may sell heavy or bulky items that are expensive to ship or specialize in low-margin merchandise.
For example, a jewelry store can sell everything from high-value pieces to cases and jewelry boxes for a much lower price.
Free shipping on these low-margin items could put you in the red.
Instead of offering free shipping on all products, it’s a good idea to set some limits, such as:
- Set a minimum order value: Setting a minimum order value for free shipping of, say, $50, is a simple way to avoid losing money on smaller transactions.
- Offer free shipping on select items only: Apply free shipping only to items that have a low shipping cost and enough profit margin to be profitable after shipping fees are taken into account.
- Use free shipping as a promotional event: Offer a limited-time free shipping promotion. Take advantage of commemorative dates, for example, to create this offer and boost sales.
These are some ways to offer free shipping using conditional elements to better manage profits.
Now see why and when you might choose the no-holds-barred approach.
When to Offer Unconditional Free Shipping
Conditional free shipping has many benefits, but sometimes unconditional free shipping is the best choice.
Selling high-margin items with high competition is at the top of the list, but there are other situations where making this benefit available also makes sense.
All your competitors are doing it
If all your competitors are doing this and you want to fight for market share, you probably need to offer free shipping site-wide.
To make this work, you must have healthy profit margins and closely control your fulfillment and shipping costs.
You want to stand out from the crowd
If none of your competitors are doing this, offering free shipping may seem unnecessary, but on the other hand, it can make your online store stand out.
Since your store absorbs all shipping costs, this tends to work best if you trade merchandise that you manufacture and sell at a high retail markup or resell high-margin products.
You sell high-margin products that are easy to ship
If you’re lucky enough to combine healthy profit margins with low shipping costs, unconditional free shipping becomes easy.
Small, expensive goods that are shipped in small, lightweight boxes, such as jewelry, watches, collectibles, fashion accessories, cosmetics, and supplements, tend to fall into this category.
“If your items cost little to ship but have high profit margins, offering free shipping is not a problem. For example, take a piece of jewelry that sells for R$1,500 with a 50% profit margin. Paying a shipping fee of R$5 is a small price compared to the promotional benefit of free shipping. ”
John Lawson, eBay Platinum Powerseller
You want to reduce customer service issues and complaints
It’s amazing how offering free shipping reduces questions related to pre-sales and return.
Customers feel more comfortable committing to a purchase if they know they are not paying for something extra.
And if they end up returning it, they feel relieved that they don’t have to contact you about refunding the shipping fee.
Clearly, there are many ways to offer free shipping, both conditionally and unconditionally.
But is this really what’s best for your business? Will adopting this practice boost sales? Is it worth the hassle of changing your current tactics?
If you are asking yourself these questions, check out some reasons below that justify the change.
Reasons to Offer Free Shipping
Free shipping is one of the pillars of the main online stores, and today’s shoppers expect all eCommerce sellers, big and small, to offer some form of free shipping.
Unless your e-commerce store sells very exclusive and difficult-to-find items, or has a famous brand, you will probably face competition in the market that offers some type of free delivery.
But if you’re still not convinced of the advantages for your business, see four excellent reasons below.
1. Decreases shopping cart abandonment rate
The fees for cart abandonment prove that online shoppers don’t like surprises.
Repeated studies show that, on average, 73% of shoppers abandon shopping carts because of high or unexpected delivery fees.
2. Makes your online store competitive
This immediately puts you in a club in shoppers’ minds that includes giants like Amazon, Walmart, Wayfair, and other big sellers.
If buyers know in advance that you do free delivery, they will give your website a chance.
3. Buyers need not worry
Following reason 1, free shipping allows shoppers to browse and add items to their cart without fear.
They don’t need to tally shipping charges in their minds as they shop or wonder if a surprise awaits them in checkout.
4. Improves your position in search results
Big marketplaces like Amazon, Google Shopping and eBay favor stores with free shipping.
On some sites, users can check a box at the top to filter out sellers who charge for shipping.
Many marketplaces also prominently display “free shipping” in their listings.
Free Shipping and Fast Delivery
Clearly, offering free shipping can be a great marketing tool to boost sales and reduce cart abandonment.
But before you reduce your shipping rates and hope for the best, take a good look at the different ways you can do it sustainably and profitably.
Most small sellers combine conditional free shipping with tight shipping cost controls to create a program that works.
If free shipping doesn’t fit your business model, there are other ways to charge a shipping fee that is still interesting to the consumer.
However, remember that in addition to the cost factor, it is essential to ensure that delivery is punctual, respecting the established deadlines, as nothing irritates the customer more than late delivery.
For fast and safe delivery of orders, you can count with Delivery365.
Delivery365 is an application that has tracking technology, its own online freight quote system and a wide base of registered delivery people.
Just register your business on our app to have your own online store and, best of all, connected to couriers ready to deliver your products.
To learn more, visit our website, learn about our services, and guarantee the best delivery service for your customers.
