It's no secret that customers love free shipping. But with rates increasing every year and tightening margins, it is expensive to offer free shipping. Can you afford it? The real question in today's market is: Can you afford not to offer free shipping?
The statistics have been solid for many years-- the most common reason that shopping carts are abandoned has to do with shipping and other fees. Roughly 75% of carts are abandoned, and 61% of those are due to shipping fees. Even worse, nearly 40% of those potential customers will never come back.
It is clear that free shipping is a huge motivator. Now that almost half of eCommerce sales are on Amazon, with other marketplaces like Walmart and Wayfair trying to keep up, fast and free shipping has become a standard. How can you compete without killing your profit?
Reduce Shipping Shock
- Offer free shipping for a minimum order. This helps encourage customers to spend more in a single order and also prompts trial of cross-sell or impulse items to reach the threshold.
- If you can't offer free shipping every day, run promotional offers periodically with free shipping. These often result in the best sales days of the year.
- Always give free shipping for trial packs or samples. This eliminates the biggest obstacle to trying the product and will convert long term customers.
- If you are selling on Amazon, make sure to use FBA so that customers can use their free 2-day shipping on your products. The fees are significant, but you will reach a large group that are unlikely to shop on your site. Try listing at a slightly higher price on the Amazon site to help offset the margin.
- Highlight your shipping offers in banners and on the home page to avoid confusion. If you are charging shipping, make sure there is a convenient fee calculator early in the checkout process, preferably on the item pages or the first checkout page.
Work with your fulfillment partner to make sure you are getting the best carrier rates possible. They can help you negotiate with the individual carriers, plus they may even have bulk rates that they can pass on to you.
Packaging is often overlooked as part of the equation. When the packaging is streamlined to the most efficient size and weight, the cost to ship will automatically be lower. This can be challenging for oddly shaped objects, but your fulfillment partner can help you evaluate and improve your packaging for the maximum efficiency.
Don't Waste Time
Most experts now consider free shipping to be part of the cost of doing business. And it's not hard to see why. Search engine advertising can easily cost $5 per lead; coupon codes give away several dollars on a purchase; flash sales give as much as 50% off or free products. Comparing the cost of free shipping with these efforts puts the expense in perspective.
Your marketing efforts are bringing customers to the site, we want to help you convert as many of them as possible. As many as 90% of customers say that receiving free shipping encourages them to spend more money online. Don't waste any time finding a way to implement shipping offers to help improve your eCommerce sales.