Should You Offer Free Shipping?

Date posted: January 9, 2014

By Damon Schechter

Ecommerce continues to grow at a rapid pace both domestically and internationally, with shipping still being an important piece of the puzzle. Customers have expectations for the cost, timeliness, and options of shipping, and those expectations keep growing. Let’s take a look at what customers are asking for, and what a modern brand can do to meet and exceed those expectations.

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This fact says it all. Why would you want to drive 10 miles and waste your precious time and gas, when you can have the same items delivered to your door with no shipping costs? We live in a culture of convenience; free shipping is a key motivation for your your to shop on their own terms while saving money and time. Source

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Average order value for online purchases without free shipping: $86.58 The same purchases with free shipping offered can be as high as $112.55. If you shop at a great store that you feel treats you well by offering you a free promotion, you’re going to reward them with more of your business. Not only that, but your time is worth a lot. So instead of wasting it by sitting in traffic, you’re going to spend it wisely by trying to order more of what you need online, but only if the cost of shipping products doesn’t wipe out the time savings. Source

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Options matter. The most requested features for online stores all had to do with shipping. Not only do shoppers want free/discounted shipping options, they also want 2-3 day delivery (43%) and overnight delivery (30%) options for a fee. This makes total sense especially when you look at holiday shopping. Someone needs to buy a gift but they waited a bit too long to get standard free shipping. They want to give the gift to someone special and it needs to arrive on time, so they are willing to spend extra to ensure that happens. If they know they can’t get it in time, then they won’t bother buying it at all, and you will have lost a sale. Don’t forget well-crafted return policies, as those can play a big role in happy customers too. Source

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DON’T offer free shipping at your peril: shoppers abandon carts, primarily due to unexpected shipping costs. This is even more true for international customers. Imagine you’re trying to purchase something from a different country. They offer free domestic shipping, but to your address abroad? $37.25. And then you imagine what the customs charges will cost you, and without hesitation close the browser. That’s a very easy way to get discouraged from shopping online. Source

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DO offer free shipping and your customers won’t just buy at higher rates, they will actually buy more so that they can qualify for the free shipping promotion. Think about it: how many times have you been shopping on a store or marketplace and wanted to buy something that cost you just shy of $25? The little notice pops up that says “add $3.28 to your order to qualify for FREE shipping” and how tempted are you? Probably very tempted. You can buy something else you might need and it feels like you’re actually coming out on top. So free shipping not only makes shoppers more likely to buy from you, it actually makes them buy more. Source

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The world keeps growing, and many markets are growing even faster than the U.S., Canada, or Europe. There are millions of people who want to make a purchase online because a product isn’t available at their local store. But paying for international shipping and customs? No way. Shipping internationally, especially for free, is difficult, but imagine how ahead of the competition you would be if you were able to do it? Source

Shipping matters. Free shipping matters more. International free shipping may matter most.

Here’s what Alex Ikonn, co-founder of premium hair extensions brand Luxy, has to say about this:

“For Luxy, free international shipping means many more happy customers than we would get if we were only shipping in one country. But you need to keep inventory closer to your customers so the free shipping option doesn’t break the bank!”

Luxy displays ‘FREE INTERNATIONAL SHIPPING’ prominently right at the top of their homepage, making sure that anyone who visits their site knows about this benefit of shopping there.

By providing free shipping promotions you will also satisfy the growing demand for additional shipping options. Take a look at what this might look like at checkout:

Free Ground shipping? Great! Expedited service for a fee if I need to get it ASAP? Even better. This is a great example of a store offering free shipping and satisfying two of the customer demands we saw earlier.

Damon Schechter is CEO of Shipwire order fulfillment.

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