How Can Free Shipping Impact Your Online Business?

March 19th, 2019
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Free shipping is one of those things that customers get weak in the knees over. There is plenty of anecdotal evidence that supports the theory that people will browse more and spend more in order to qualify for free shipping. In fact, some studies report that consumers are more willing to cash in an emailed coupon for free shipping than to utilize a 30%, 40%, or 50% off coupon emailed the same way. 

The tricky part about offering free shipping is that, while it does draw more people to your product, it comes at a monetary cost to you, the retailer. You can make free shipping work for you, but you may have to change the way you approach shipping in general to achieve the numerous benefits that free shipping can offer.  

Consider different options

There are so many retailers offering free shipping now, that it may seem like you have no choice but to go with the flow. That can be a pretty daunting task if you’re a small business owner and every penny counts. There are options, however, to keep your business model competitive and relevant amidst the many offers for free shipping.

  • Limit free shipping to a standard delivery timeframe: This means that your packages arrive a little bit slower than they would if the customer chose expedited (and paid) shipping. However, this is often a sacrifice the customer is willing to make.
  • Offer free shipping on minimum orders: Consumers have been shown to happily add odds-and-ends merchandise to their cart in order to meet a minimum requirement to qualify for free shipping. This boosts sales with minimal extra cost on your part.
  • Offer free shipping based on proximity: If the home base for your business is in the middle of the United States, consider offering free shipping within your state. Offer a slightly increased fee for other mid-western states and a somewhat higher fee still for states outside of the Midwest. Keep these shipping charges low, so your customers still feel like they’re getting the better end of the deal. 

Don’t underestimate customer loyalty

One of the best ways to help your business succeed is to have loyal, repeat customers. Use free shipping as a way to keep customers coming back for more. Consider offering free shipping with a yearly membership or as part of a loyalty program. If you can’t afford to offer it all of the time, you might just offer free shipping periodically to encourage customers to purchase things that they want but have been putting off. 

Measure your results

If you decide to implement a free shipping option, make sure to watch your finances carefully over time so that you can make sure that this practice is paying off. This can take some dedicated accounting, but you don’t want to get into a situation where you’re offering something that is hurting your bottom line.  




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