Should You Offer Free Shipping?

Should You Offer Free Shipping?

It’s common for shop owners to not want to offer free shipping.

Surely it will reduce profits and hurt the business.

However, used tactically free shipping can be a powerful sales tool. That said, it may not be right for every business. In that case, there’s still an overwhelming argument for simplicity. For that reason, we’ll also consider flat rate shipping. Both as an alternative to and a partner to free shipping.

The shipping conundrum

As a shop owner, you want to make as much money as possible on every sale.

Your customers, on the other hand, want to spend as little as possible.

This page at Hostingfacts contains a range of interesting information. One that caught my eye was the finding that 65% of online shoppers are unwilling to pay for shipping.

While I advise against taking the results from a single source as gospel, it’s at least indicative of a common sentiment.

The advantage of offering free shipping

There’s a very simple reason why you might consider offering free shipping.

It makes it very easy for your customers as they don’t have to think.

Have you ever been on a site and had to search around to try and find the shipping costs? Too often we then discover that the shipping information is like a riddle. I’m amazed how many times I’ve found sites advising me to add products to the cart and then go to checkout to find out the shipping cost.

Life’s too short. Usually one of their competitor’s understands the importance of a simple shipping policy. That’s where my custom goes.

Even if you can get customers to get to the checkout, it’s still not plain sailing. According to this article on the Baymard Institute’s site, 61% of those questioned in a survey had abandoned a shopping cart because extra costs, such as shipping, were too high.

Can you afford to offer free shipping?

If you’re selling products where shipping is inexpensive, it may be easy to absorb the costs. Alternatively you could look at building some or all of the shipping into your product prices.

Those options may not be possible for some products, but you may still want to consider the possibility.

According to research in this Metapack PDF, 73% of respondents had increased their purchase to take advantage on a minimum spend threshold to get free shipping.

So instead of offering free shipping across the board, it can be held back for higher value orders.

The flat rate compromise

While customers will usually always prefer free, charging a flat rate for shipping shares an advantage with free shipping.

It’s simple and makes it easy for customers to work out what they’ll be paying. It’s also very simple to communicate. It can be clearly announced on every page.

No need for customers to track down a shipping information page and then make sense of various pricing tables.

When helping new WooCommerce shop owners, one of the most common requests I hear is for a table rates shipping plugin. These allow shop owners to set very fine grained shipping costs.

These plugins then lead to a very common complaint from shop owners. The plugins are so complex, shop owners get confused trying to use them.

Imagine how the poor customers feel.

The best of both worlds

If free shipping for everything isn’t a possibility for your shop, offering a flat rate is the next best thing.

However an even more powerful option would be to offer a combination.

Set a flat rate that applies up to a threshold of your choosing and then free shipping above that. That should ensure you’re not losing out on smaller orders. It also gives you the benefit of gaining increased order values from the 73% who spend more for free shipping.

So now it’s down to you

It’s understandable that shop owners are wary of shipping costs and possibly losing out. However, you should move your focus away from losing and focus on gaining.

Used tactically, a clear and easily understood shipping policy could boost your sales.

If you’re still on the fence, here’s one more thing to consider.

It’s considered normal for an ecommerce site to have a conversion rate of 2%. Shops converting 3% are considered to be doing well.

What that means is that for every 100 visitors, you’ll be doing well if 3 of them purchase from you.

In light of that, don’t you want to make sure you’re doing all you can encourage your visitors to become customers?

 

I’m Ian Pullen and when not working as a dog and cat butler, I’m a designer/developer and writer who works on projects for solopreneurs, SMBs and multi-nationals like Unilever and Lenovo.
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© Ian Pullen - Shoestring Hustle 2018

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