As an online seller, you may be wondering if free shipping is a must. The answer is – it depends. There are pros and cons to offering free shipping, and it’s important to understand both before making a decision. In this blog post, we will discuss the benefits of free shipping and the drawbacks of offering free shipping. We’ll also help you decide if free shipping is right for your business!
What is Free Shipping?
Free shipping is when an online seller offers to ship their products free of charge to the customer. This can be done in a few different ways – either by including the shipping costs in the product price, or by offering free shipping as a promotion.
What Kind Of Sellers Offer Free Shipping?
Today all kinds of sellers offer free shipping. It has become common place after retailer led programs like Amazon Prime and Walmart 2 Day free shipping. Many marketplaces and platforms have free shipping offers as well, like Etsy, Shopify, and eBay. Although it is true that in 2022 most sellers offer free shipping on most orders, not all categories have adopted this practice. Be sure to see what is common in your industry or product category before you make a decision to offer free shipping.
When Do Sellers Offer Free Shipping?
Although some sellers offer free shipping on all orders, it is a common practice to see free shipping thresholds. These free shipping thresholds can be based on order value, number of items, or even weight. The key is to offer free shipping in a way that doesn’t lose you money, so it’s important to set a threshold that makes sense for your products and business.
Why Offer Free Shipping?
Stand-out From The Competition
There are several reasons why you might want to offer free shipping to your customers. First, free shipping is a great way to stand out from the competition. If all of your competitors are charging for shipping, offering free shipping can be a great way to attract new customers. Additionally, free shipping is a great way to build customer loyalty – if your customers know they can always get free shipping from you, they’re more likely to keep coming back!
Increase Average Order Volume
There are a few other reasons why free shipping can be beneficial for your business. Free shipping can help increase your Average Order Value (AOV), which is the average amount that each customer spends on your site. Additionally, free shipping can encourage customers to add more items to their cart – if they know they won’t have to pay extra for shipping, they might be more likely to add that extra item to their order. This is especially true if your free shipping only is applied at a certain order value threshold that ensure profitability for you and your business.
Some marketplaces give sellers a special “badge” or marking highlighting that they offer free shipping. Many marketplaces do this to incentivise a better customer experience from decreased shipping and handling times. This badge can help increase your visibility on the site, as well as helping you to attract new customers.
Reduce Friction In Your Sales
Free shipping can reduce friction within a transaction – customers are more likely to complete a purchase if they don’t have to worry about shipping costs. And finally, free shipping can help improve your conversion rate – the percentage of visitors to your site who end up making a purchase.
Finally, free shipping can help you boost your search engine optimization (SEO). When customers search for products online, one of the things they often look for is free shipping. If you offer free shipping, you may be more likely to show up in search results – and that means more customers for you!
Drawbacks of Offering Free Shipping
It Can Be Expensive
While free shipping can be beneficial for your business, there are also a few drawbacks to consider. First, free shipping can be expensive – especially if you’re selling heavy or bulky items. If you’re not careful, free shipping can end up costing you more money than you make on the sale!
Standard And Economy Services Can Be Slow
Additionally, free shipping can sometimes frustrate customers if the free service you are offering does not have fast enough transit times. Many sellers offer standard or economy shipping for free. These services can often take longer than Amazon Prime or other programs from retailers. If you are using standard or economy services be sure to offer paid express options. Customers might be willing to pay for faster shipping if it means they’ll get their products sooner.
Forfeit Potential Revenue
By offering free shipping you may be forfeiting a revenue stream for your business. Many sellers chose to charge a flat rate for their shipping fees often times a seller may even make a small profit on their average order by charging for shipping. Offering free shipping could forfeit this potential revenue stream.
Raise Customer Expectations
Finally, free shipping can sometimes create customer expectations that are difficult to meet. If you offer free shipping on all orders, customers might expect that every order will ship for free – even if it’s a large or heavy order. This can lead to frustration on the part of the customer, and can even result in negative reviews.
So, is free shipping a must for online sellers? The answer is – it depends. There are pros and cons to free shipping, and it’s important to weigh those carefully before making a decision. If you do decide to offer free shipping, be sure to set clear expectations with your customers and make sure you’re not losing money on the deal!
Have you ever offered free shipping to your customers? What were your results? Let us know in the comments below!