eCommerce

Should Your Company Offer Free Shipping? Pros and Cons

Is offering free shipping for your ecommerce business a smart decision? Read our article to find out. Find out how you can offer competitive prices without losing profits.

Introduction

Should free shipping be a staple of your ecommerce business? For many, free shipping is something that they can’t afford to do because it’s too expensive and doesn’t generate enough revenue. But there are also many benefits to offering free shipping such as increased sales revenue, customer loyalty, and improved customer experience. In this article we will discuss the pros and cons of free shipping so you can decide if it makes sense for your company.

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Why you should consider offering free shipping for your business

Increased sales revenue: Free shipping can lead to increased online sales because people are more willing to buy products if they don’t have additional charges. Research shows that free shipping increases the number of items purchased by nearly one third . So, even though you might lose a little money initially on free shipping, you’ll likely make it up when more customers purchase because of your free shipping.

Increased customer loyalty: Offering free shipping is a great way to build your online store’s reputation and generate brand loyalty among customers. Customers are much less likely to shop at an ecommerce business that charges for shipping because they don’t want the hassle of calculating the shipping price into the cost. Customers come back time and time again to merchants who offer free shipping.

Increased customer experience: Offering free shipping makes for a better online shopping experience because customers won’t have to pay additional charges or wait longer for their items. In fact, Amazon found that free shipping increased the percentage of positive reviews by 15%. So offering free shipping can help you increase your business’s credibility and bring in more customers.

Free shipping can help reduce shopping cart abandonment: There are many ecommerce businesses that see high rates of abandoned carts because consumers don’t want to pay for shipping. For example, free shipping at Walmart has led to higher rates of shopping cart completion. So free shipping can help you increase your business’s revenue by reducing shopping cart abandonment.

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Reasons free shipping might not be right for your business

Lower profit margins: While free shipping can help increase sales revenue, it can also lead to a decrease in overall profits because you’re paying for the free shipping on each purchased item. In fact, research shows that free shipping usually ends up costing around $12-15 per order.

Free shipping can be complicated to offer: If your business is selling hundreds of products online, free shipping could be problematic. Since each product has its own weight and size measurements , it might not make sense for you to implement free shipping across all your items because this could lead to increased costs that are difficult to plan around. So free shipping might not be a good idea if you’re selling a variety of products since free shipping can vary from product to product.

Your Industry may not require it to be competitive: If you are in and industry or selling a product where your competition doesn’t normally offer free shipping, then free shipping might not be a good idea. This is usually true in larger or specialty items where customers expect to pay something shipping. In these instances, free shipping might not help your business increase sales as specialty items usually have less competition.

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Conclusion

Free shipping is a hotly debated topic in the world of ecommerce. For some, it’s too expensive to offer this service because they don’t generate enough revenue from it and can be an obstacle for new customers who are looking for ways to save money. But there are also many benefits that come with free shipping, including increased sales revenue, customer loyalty, improved customer experience – all of which ultimately drives more profit over time given that your margins may not reflect what you’re actually generating per transaction. This article has outlined both sides so now you can decide if offering free shipping is worth the investment for your business or not! Do you currently offer free shipping?

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