How to Offer Free Shipping Without Going Broke
To budget-conscious consumers, the “Free Shipping” promise is as good as gold. The shipping price on an online order can be the deciding factor that determines whether or not the shopper completes the order. If it costs as much to ship the product as it did to buy it, odds are the consumer will wait to purchase it at a brick-and- mortar store, or from one of your competitors. Offering free shipping, however, could cut deeply into profit margins. Learning whether or not you should offer free shipping can help you make the best decision for your brand.
Learn the Benefits of Offering Free Shipping
There are many reasons why you should offer free shipping but, as a retailer, it can be daunting to weigh the benefits and costs of offering free shipping on purchases. With every sale, you see dollars disappearing in shipping expenses. Perhaps you already offer free shipping but are struggling to make ends meet, or are considering providing this perk but don’t know how you’ll afford it. There are ways that any retailer can break down these barriers and provide free shipping – and it’s well worth the effort.
Free shipping can result in short- and long-term gains. Offering free shipping can immediately boost sales. A Stitch Labs study states that retailers who can always provide free shipping increase their revenue by 10 percent. Customers may make larger purchases as well, especially if you use a minimum purchase price to qualify for free shipping. Free shipping can increase profitability over time, garnering the business of a large percentage of online buyers who will only support companies that offer free shipping. Most importantly, for a small business, free shipping will keep you relevant in a fiercely competitive online retail market.
Ask These Three Questions
Thanks to ecommerce giants like Amazon and Wal-Mart, online shoppers have come to expect free shipping and free returns. Small to mid-size ecommerce brands have to find a way to keep
up with the competition, or else risk the futures of their brands. Fortunately, there are ways to offer free shipping without breaking the bank. Ask yourself the following questions to see if it’s right for you:
1. Can you afford it? If you can afford to offer free shipping, it’s almost always in your best interest to do so. A recent study from Walker Sands Retail found that nine out of 10 shoppers surveyed said that free shipping was the number one incentive to shop more online. For a small business, free shipping may be worth the expense if it increases traffic and revenue enough for your company.
2. Can you provide other incentives? Free shipping is a hard incentive to beat. If you believe you have another incentive that can garner the same or similar results as free shipping for lesser cost, go for it. Consider offering handcrafted notes or gift-wrap, promotional codes for discounts on future purchases, or free samples of goods with each purchase. Oftentimes, offering some variation of free shipping is a better solution for companies than other, less-popular incentives.
3. Would a compromise work? Many companies offer free shipping only after the customer reaches a minimum purchase amount, or only during certain times of the year. If you can’t offer free shipping all the time, consider compromising and offering it some of the time. These strategies can attract customers and increase revenue without taking a major chunk out of your funds.
Free shipping doesn’t work for everyone, and that’s okay. Hundreds of ecommerce brands are thriving without offering permanent free shipping. The most important thing is to choose the shipping option that’s most appropriate for your brand. As you grow, consider applying more free shipping options or promotional sales where the budget permits. However, there is often a way to offer free shipping and attract business without hurting profits.
Get Creative in Free Shipping Techniques
There are ways to use free shipping as a tool to boost sales and maximize profits without going under, even if you’re a small or new business. Play with free shipping ideas and see how each one affects your bottom line. Increase your minimum threshold before you’ll offer free shipping, or increase product prices to compensate for free shipping losses. There are many ways that brands are offering shipping perks and benefitting the consumer and the company. Free shipping can be a trial and error process until you find what works for your ecommerce brand.
Work with an Affordable Ecommerce Shipping Company
With help from the right ecommerce shipping solution, offering free shipping can be much more rewarding. Curious to see how much offering free shipping could boost your brand? Partner with a smart ecommerce shipping company for prices that make it possible. FireMile delivers to major shipping networks for you at affordable rates using the USPS work share program.
You get to select your shipping speed, with flexible options for your specific requirements – all at a price that works for you. With FirstMile, you can try gifting free national and even international shipping. FirstMile can help your business unlock its potential and beat competitors with attractive shipping offers.
www.mytotalretail.com/article/offer-free- shipping-cant- afford/
www.avalara.com/blog/2016/05/26/how-any- retailer-can- afford-to- offer-free- shipping/
www.stitchlabs.com/press/offering-free- shipping-can- boost-revenue- by-10- percent-stitch-labs-data- indicates/
www.uspsoig.gov/sites/default/files/document-library- files/2015/cp-ar- 15-002.pdf