Free shipping has become a must in e-commerce businesses, but how much does it cost to sellers? Find out how to offer free shipping without losing money!
Free shipping and abandoned carts
Shipping costs represent for your customers an obstacle to the completion of an online purchase. For the 54% of customers, shipping costs make the total amount too high, blocking the purchase.
7 buyers out of 10 consider free shipping as an essential factor in their purchase decisions.
This means that it is fundamental for your store to contain delivery costs, and/or including them in the price of the products: doing so the buyer marks the price as “final” and she avoids second thoughts due to the adding of shipping costs. Offering free shipping (real or partially apparent) will raise your conversion rates and the average cart value.
Why should I reduce the costs for shipping my orders?
It is essential to save on shipping costs in order to raise your profit margins and/or being able to offer free shipping to your customers without destroying your profit.
Proposing free shipping (often over a minimum cart value) has become a must, and with it maintaining a good revenue (or a better one, we would prefer). Reducing the costs associated with delivery is a good way to grow revenues maintaining profit margins unaltered.
There are some actions that can allow you to obtain these benefits: here we list some of them.
#1 Work side-by-side with your courier
Try to define some delivery standard with the carrier(s) you work with. Negotiate services and costs for shipping, delivery time and returns. Establish a standard based on the best cost/quality ratio.
Online stores that don’t negotiate with couriers for their standard orders pay up to 40% more than those who do!
#2 Define a clear shipping costs policy
Let your customers free to choose which service they wish to desire. Offer the standard shipping for free, and additional services under surcharge. For example you could offer free shipping in 2-3 working days, and ask for an extra charge for premium services such as 24-hours shipping.
You can check the average abandoned cart value, and offer free shipping over this value to recapture the orders you lose due to shipping costs.
#3 Work with many couriers
Don’t limit yourself to only one carrier. Try to choose many carriers, the best for each specific type of delivery (zones and weights), so that you will reduce the costs associated to shipping. Every carrier has different rates based on weight, dimension and destination of your orders. Choose the best for every type of order you have to ship!
#4 Automated shipping label creation
You can save time and money managing your deliveries with a tool that automatically compares the rates of different couriers and/or allows you to set automated shipping rules (choosing automatically a carrier basing on the type of order).
With ShippyPro you will be able to manage from A to Z your deliveries, generating shipping labels in bulk with 40+ carriers, importing your orders automatically from your sites and marketplace account to an easy-to-use dashboard, and updating automatically your customer with tracking status emails! (and more…)
How much does it cost me to offer free shipping?
The right question would be “how much does it cost me to not offer free shipping”?
BTW, 61% of consumers abandon the online shopping cart at checkout, if free shipping is not included in the shipping options. If you don’t offer it you’re losing 61% of potential orders just one step far from conversion! Stores offering free shipping register a +50% conversion rate and a +30% in the average cart value, growing their revenues in such a great way.
Don’t lose those opportunities to grow: shrink your costs and offer free shipping!
Which products should I deliver for free?
All types of products are the right ones to offer free shipping. But there are some for which it is a must: buyers of low cost products (e.g. small tech devices) don’t want to pay for the delivery, because it costs sometimes more than the object they want to purchase.
So, green lights to free shipping for cheap products, while for more expensive orders you can propose a minimum cart value for enjoying free shipping.
Does free shipping or express delivery convert more customers?
Free shipping results the preferred solution for the most customers. Some demanding buyers could prefer express delivery, even under the payment of an extra charge.
A good strategy could be proposing both alternatives, leaving the customers free to choose the service they prefer.