August 22, 2013
Two words boost sales and drive your shoppers wild:
The combination of these words adds sparkle to the eyes of an online shopper and encourage them to fast track to the purchase page. There are many methods to offer free shipping; Amazon offers Super Saver Shipping if you meet a certain spending threshold and Groupon offers free shipping on goods that meet a fixed price point. Shipping promotions drive conversions and encourage customers to buy faster and add an extra item to their cart to qualify for free shipping.
Which shipping promotion is right for your business without hurting your margin? What are some of the "free" shipping options available?
1. Understand types of free shipping promotions
Take a look around and you will see all sorts of shipping promotions. Many are based on some type of membership or loyalty program, but even new customers deserve a little shipping love.
Top 6 widely employed free shipping tactics:
- Free shipping on everything in stock
- Free shipping on orders over a certain $ amount
- Flat rate shipping with an expedited shipping special offer
- Flat rate shipping on the whole order (one price, unlimited items)
- Tiered flat rate shipping based on order value
- Free shipping to certain regions
2. Learn how to make free shipping more effective
- Think beyond your homepage. Keep your free shipping messaging present throughout the website and the entire process until check out. Potential customers may land on different pages of your site, and this way they'll be sure to see the offer.
- Get promoted on third party websites. This year, Free Shipping Day is Wednesday, December 18. Websites like freeshippingday.com allow sellers to list free shipping promotions and shoppers frequently visit the site to check out deals on this "holiday".
- Create deadlines. This inspires a sense of urgency and encourages shoppers to buy quickly. Nearing the holidays, let customers know the last day they can place orders while qualifying for free shipping and leaving time for holiday delivery. Flash sales with free shipping can be effective, too!
- Use free shipping to raise the value of your orders. If your promotion requires a minimum purchase to qualify for free shipping, make it easy for customers to determine how far they are from meeting it as they add to their shopping cart. Consider extra touches that save shoppers time, such as providing them with suggested items in the price range needed to reach the minimum threshold.
- Promote free shipping after the sale. Make use of "Thank you for your purchase" pages and email messaging by offering free shipping codes that are redeemable on future purchases to encourage repeat business.
3. Other things to consider when planning a free shipping promotion
- Look at your average product margins. It's hard to justify free shipping for low margin products unless the total order value is high. For low margin products, offer free shipping for orders that meet or exceeded a set total purchase value.
- Know where your products are stored and shipped. If your warehouse is far from buyers, it will cost you more to get products to them. In this case, flat rate shipping or free shipping to select regions may be your best bet.
- If you have bulky or heavy products and your warehouse is not strategically located close to buyers, considering using outsourced order fulfillment through a company like Shipwire. By moving products closer to your end-buyers, you can drastically reduce the cost of parcel shipping. Even if your customers pay for shipping, you need to drive this cost down because it decreases conversions.
- Last but not least, take a look at this shipping cost calculator that demonstrates how much you can save by being smart about product placement.
Comments, concerns, questions about free shipping? Post them in the comments below!