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Selling Tips: Offering Free Shipping

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Offering free shipping can drive business by increasing sales through a growing customer base.

It may seem contradictory to a business owner, but offering a service like free shipping can actually increase sales, profitability, and your customer base.

During the holidays, free shipping is one of most important factors to shoppers when deciding to make a purchase.

In the 2018 Deloitte holiday retail survey:

  • 70% of holiday shoppers said they would buy online if free shipping is available,  instead of purchasing in store.

In a 2018 survey by the National Retail Federation:

  • 94% of holiday shoppers said they would choose a retailer who offered free shipping over one who charged for shipping

This service is not just for the holidays and busy shopping seasons, either. In statistics released by BigCommerce, the numbers speak for themselves:

  • 66% of online shoppers have abandoned a shopping cart because of shipping costs.
  • 80% of American shoppers site shipping cost as the top factor that influences where they shop.
  • 63% of suburban shoppers share that shipping costs are their least favorite part of online shopping.

There’s no “one size fits all” model for offering free shipping. Here are some questions to ask yourself to see if it’s a fit for your business:

What am I spending now - what's an average shipment costing me?

If you tend to send items that are light or frequently use flat rate boxes, consuming an expense under $10 or $12 may factor out to breaking even on profit.

How important is the method and timing of shipment to my customer?

Let’s say you sell a perishable item and getting your goods to your customer is hugely impacted by time. Knowing that you will most likely always choose Priority Mail Express, it may not be feasible (or wise!) to cover over shipping. For other things, you can choose more cost-effective methods that take just a day or two longer, like Priority Mail or First Class Package Service. These services also cost less, giving you less to cover out-of-pocket.

What’s my average sale?

If your customers average high-dollar transactions, it will probably be easier to cover shipping costs. On the other hand, if you sell items with a price tag that wouldn’t even allow you to break even on shipping, free shipping could actually deter profit.

Remember, you can always add or remove a feature like free shipping. The only way to really know how it will impact your business is to offer it as an option. For more ideas, check out our guide to using free shipping as a promotional tool.

 


Related articles: 

Shipping Tips: Make Shipping Faster
Selling Tips: Offering Multiple Shipping Options
Selling Tips: Offering Same-Day Shipping
Selling Tips: Setting up Shipping Rates for an Online Store
Selling Tips: Using Shipping as a Promotional Tool

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