If you're like most business owners, you're always looking for ways to give your customers a little extra incentive to buy from you. And what could be better than free shipping? Offering free shipping is a great way to show your customers that you value their satisfaction and time. It also helps set you apart from the competition. But before you start offering free shipping, there are a few things you should know. In this blog post, we'll discuss what free shipping is, how it works, and the pros and cons of offering it. We'll also give you some tips on how to make the most of this valuable marketing tool. So read on to learn more about free shipping and see if it's right for your business!
What is Free Shipping and Why do Businesses Offer it?
Most businesses offer free shipping as a way to entice customers to buy more items.
When a customer spends a certain amount of money on an order, the business will often offer free shipping as a way of saying thank you. This incentive is meant to encourage customers to spend more money on their order, and it often proves successful.
Additionally, free shipping can help businesses save money on shipping costs. By offering free shipping, the business doesn't have to worry about how much it costs to ship an item because the customer is responsible for those costs. This can be beneficial for both the business and the customer alike.
In the end, free shipping is a great way for businesses to increase sales and encourage customers to purchase more items. It also helps businesses save money on shipping costs, which can be beneficial in the long run. Free shipping is definitely an incentive worth offering for any business that wants to remain competitive in today's marketplace.
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The Basics of Free Shipping
While it’s pretty self-explanatory in nature, free shipping is when online orders are shipped for no additional fee as opposed to charging a few dollars. As for why this is done, it’s not entirely done out of goodwill, although that can be a factor for some eCommerce business owners. Free shipping is actually a marketing technique that can drive sales and discourage checkout abandonment. Shown to increase revenue anywhere between 10 and 90% depending on who you consult, it can have a fantastic payoff in the end despite the greater upfront associated costs, but it greatly depends on the type of free shipping offered, site traffic, product popularity, the buyer’s intentions, and the prices of both products and shipping on your end.
The success relies on all of these factors. For example, any customers that aren’t quite at the end stages of the buyer cycle, will likely not be convinced just by the promise of free shipping. They need to already have the need and interest in your product. Free shipping can’t generate this; rather, it can just encourage them to follow through with the purchase they want. Similarly, pricing that is too expensive, an interest that isn’t strong enough, too little traffic, and more can all decrease the effectiveness of free shipping as a selling tactic.
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Pros of Offering Free Shipping
Help Increase Sales: Free shipping is a great incentive for customers to purchase more items. When customers know that they won't have to pay anything extra for shipping, they will be more likely to buy additional items and add them to their orders.
Helps Save Money on Shipping Costs: By offering free shipping, businesses are able to save money on the costs of sending out goods. This can be beneficial in the long run as it helps business owners keep their overhead costs down.
Cons of Offering Free Shipping
Tough To Recoup Losses: Depending on how much your company charges for products, offering free shipping could end up being more expensive than you bargained for. If customers don’t shop frequently enough or if they only purchase small items, you might end up spending more money on shipping than you’ll be able to recoup.
Tracking Difficulties: If your business ships a lot of packages, it can be tough to keep track of who is eligible for free shipping and who isn't. Without proper tracking systems in place, it can be difficult to ensure that only customers who meet the requirements are getting their orders shipped for free.
Making the Most of Free Shipping
Set Clear Requirements: Make sure that your customers understand exactly what they need to do in order to qualify for free shipping. Be as clear and straightforward as possible when outlining the requirements so there won't be any confusion or misunderstandings.
Offer Free Shipping on High-Value Orders: If you're running a promotion where customers get free shipping on orders over a certain amount, make sure that the value is high enough to recoup any potential losses.
Keep Track of Shipping Costs: It's important to keep track of how much money is being spent on shipping so that you can monitor whether or not your free shipping offer is paying off. This will help you determine if it's worth continuing the offer or if it's better to switch up your strategy.
Offer Incentives for Multiple Purchases: Encourage customers to purchase more than one item by offering incentives like discounts or special offers when they buy multiple products at once. This can help boost sales and ensure that you're getting the most out of your free shipping offer.
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5 Tips to Make Free Shipping Work For You
So, free shipping can obviously work if all the proper pieces are aligned. We know this. How are you supposed to get there, though? How can you ensure free shipping makes sense for you? Here are a five tips that should be able to help you out.
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1. Pick the right free shipping method
Most of us are probably pretty familiar with free 2-day shipping on certain items thanks to a certain near-monopoly, but there are several other options out there. You can also offer unlimited free shipping, shipping based on spending, time-dependent free shipping, and more. All come with various perks, so choose carefully for the maximum payoff!
2. Create a strong following and product catalog
As said previously, free shipping means nothing if interest isn’t there. Help create that by focusing on customer outreach and offering products that people truly want to buy. Create a solid product catalog and create an engaged customer base on your social media accounts. Doing so will increase the chance of customers taking advantage of your offer.
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3. Find ways to increase checkout flow
Checkout flow is one of the biggest factors that determine whether no cost shipping makes sense for your eCommerce brand. Naturally, that means increasing this to increase the effectiveness of the shipping. Streamlining the checkout process, offering guest checkout, offering several payment methods, and more all help with this.
4. Be conscientious of pricing
Everyone likes a good deal. Don’t be afraid to find ways to make this happen, but don’t underprice things either. Customers will question the safety of your brand and the quality of your product if you do. Somewhere in the middle is perfect.
5. Recognize it won’t always work
Seems weird, we know. But sometimes finding ways to make free shipping work means accepting it won’t be the right choice every time. Pick your areas where you use them carefully—efficiency matters. Pick the right times and ways to use it, and you’ll benefit a lot more than you would otherwise.
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Should you Offer Free Shipping?
It depends on your business. For some businesses, free shipping is a must in order to be competitive. For others, it's not as important.
It's important to consider the cost of shipping and the profit margins of your products when making a decision about free shipping. If your products are expensive and the cost of shipping is high, you may not be able to offer free shipping and still make a profit.
So, is free shipping right for your business? The answer to that question depends on a number of factors, including the products you sell and the size of your customer base. But if you're looking for a way to set yourself apart from the competition and give your customers an extra incentive to buy from you, free shipping may be just what you need. And if you're not sure how to get started, don't worry. We can help! Contact us today to learn more about our eCommerce fulfillment services and how we can help you take your business to the next level.
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