Why Offering Free Shipping Can Actually Make You Money
Let’s be honest, you get a little bit excited when you see that your favourite online store is offering free shipping right? Even though you are probably spending a fortune with them, you feel like you are saving money because you don’t have to pay that $5 for shipping!
Can you create that same feeling of excitement in your store? Here is how to use those two magical words of ‘free shipping’ to your advantage.
Why Free Shipping?
It might seem counterproductive to think that you can make more money by offering something for free. But, research has proven that the number of abandoned cart sales increases when shipping is added at the end of the transaction. Your customer has filled their cart with items (potentially shopping to a budget, or even splurging), they think they know what they are paying and then suddenly an extra fee is added for shipping.
Suddenly they are second guessing all of those products in their cart. This surprise amount can derail a whole purchase transaction.
By offering free shipping your customers know exactly what they are paying at all stages of the purchase journey. That means less abandoned carts and more completed sales. The magical words that every e-commerce business wants to hear.
How To Offer Free Shipping
When you are considering offering this service in your e-commerce store, you first need to factor in how it is going to work. If you just ship your stock for free, you are going to eat into the profits pretty quickly. Instead, you need to work out how you are going to offer the perk without affecting the bottom line.
Incorporating the cost: Adding the cost of the shipping to your products is the simplest way of doing this. But it isn’t as simple as increasing the price of all items by $10. You need to have a clear understanding of your shipping costs, your products costs and your margins. Factor the shipping into your pricing in a clever way. You might make on some products and lose on others, but it should even out to roughly cover your courier or shipping bill.
Use it as a perk: Offer free shipping to your loyal and VIP customers as a perk for shopping with you. It will encourage repeat sales and word of mouth referrals.
Market your business: Get people to check out your products by making it clear that you offer free shipping. It might encourage more eyes on your page if they feel like they are getting a good deal out of it.
Ways Of Offering It
There are several different ways you can offer free shipping on your website. There is no best way, just the way that suits your business.
Blanket approach: Offer free shipping on all purchases. This can get expensive if you have low margins, lots of small orders, or you have to ship internationally.
Have a spending cap: Allow free shipping on all orders over a certain amount. This can encourage people to spend a little more than they would usually. Say your limit is $50 and a customer has $42 in their cart. They may choose to add another item to bring them up to the $50 mark just to avoid paying shipping.
Buy two or more items: The cost of shipping gets more efficient when customers buy more items. By encouraging buying multiple items in one purchase you take less losses and the customer feels like they get a bargain.
During slow periods: If you have a particular time of the year that is slower than others, you can encourage sales by offering free shipping.
Shopify Makes It Easy
If you are panicking about how to implement this on your Shopify website then don’t panic. It is actually very simple. Shopify know that free shipping is a good way to increase your website visitors, so they have an option to offer free shipping right from the discounts section.
If you are not sure how to make this happen, or would rather some help, then get in touch with us here at Creative web Design. We can help you get those customers in the door in no time.