If you’ve been running an Ecommerce business for a while, you’ve probably had customers ask this question over and over again:
– Do you offer free shipping?
For a business owner, it can be intimidating to take on this risk and absorb the cost of shipping to please your customers.
But when done right – with the conditions that make sense for your brand – you can offer free shipping to your customers and remain competitive in the online market.
Here is how to offer free shipping while still profiting from your sales.
Why is it better to offer free shipping?
People love shopping online – it’s fast, it’s easy, and 2.14 billion people worldwide do it in 2021.
What people don’t like, however, is waiting for their items to arrive, and paying for those items to get shipped to them.
By offering free shipping, especially after a minimum purchase threshold, you can retain those customers and increase the size of each order as consumers make an effort to surpass that threshold.
In addition to all of that, you’re competing with Amazon, which offers free two-day shipping (and even one-day and same-day shipping for certain items) to its Prime members.
In the US alone, Amazon has 126 million Prime members, which means online shoppers are getting used to receiving fast and free shipping when they buy new items.
If you want to stay competitive, even against online retail giants like Amazon, offering some form of free shipping is a must.
Does free delivery increase sales?
You’re very likely to see an increase in sales when you add a free shipping banner to your Ecommerce store.
On average, you can increase order value by 30% when you offer free shipping, 93% of buyers will be encouraged to buy more products if free shipping is available on your store.
Your customers are also twice as likely to be enticed by free shipping than by a percentage off product prices, so if you have to choose between the two, free shipping is the way to go!
Here’s a concrete example of how free shipping can help you grow your Ecommerce store.
NuFace, a skincare brand, did a split-test to see whether or not adding free shipping would help increase their sales.
Not only did their sales increase by 90%, but their average order value also increased by 7.3%.
Keep in mind, however, that offering free shipping will decrease your profit margins. But if your sales and average order value increase enough, this can counter the effect of decreased profit margins, so it can still be worth it in many cases.
How to offer free shipping and stay profitable
Although free shipping is the way to go to increase sales, it doesn’t automatically mean you’ll increase profitability.
That’s because there are right and wrong ways to implement free shipping in your business. If you cut into your margins too much, you’ll risk losing money on sales instead of profiting.
Here’s what you should consider when offering free shipping to your customers.
1. Price your products according to shipping costs
When you’re calculating your profit margins, you can take shipping into account to determine the price of your products.
For example, if you determine that you need to charge $12 for a product to profit, and that shipping for such items will cost $3, consider upping the price to $15.
You can also increase the price without considering the entire shipping fee if you have a healthy average order value. For instance, if the average customer purchases three items worth $12 each, you could charge $13 for these items and still profit without an issue.
Of course, this is a careful balancing act. Increase your prices too much, and your competitors will sniff this out and lower their own prices to attract more customers their way. Fail to increase them enough, and shipping costs will eat up your profit margins.
2. Cut in other areas to keep your profit margins
If your existing profit margins are already slim, you can start looking into other ways to save money to make up for having to cover the expense of shipping.
For instance, you could find ways to cut back on web development fees by implementing no-code software for features like popups and surveys 💡
3. Offer add-on items
One of the ways Amazon manages to offer fast and free shipping to its members is with add-on items.
Add-on items cannot be shipped on their own, since their low price tag wouldn’t justify the cost of offering free shipping. Instead, customers must purchase over $25 of products to be able to get their add-on item.
You can take inspiration from them and make some of your lower-priced products add-on items instead of allowing them to ship by themselves. This will not only increase your average order value, but it will also ensure lower-priced items don’t eat up your profit margins when you ship them out to customers for free.
4. Create conditions for free shipping
Last but not least, you shouldn’t offer unconditional free shipping.
Even Amazon has conditions to its free shipping policy – you need to pay a yearly fee to qualify for Prime membership, and you need a minimum order of $25 to get faster shipping options.
We’ll go into all the ways you can offer conditional free shipping below.
The best ways to offer conditional free shipping
1. Establish a minimum order threshold
Minimum order thresholds are one of the most popular ways to qualify orders for free shipping.
Before your customers can enjoy free shipping, their purchases need to meet a certain minimum value.
So how much should your minimum order threshold be?
That depends entirely on:
- Where you’re shipping from
- Which places you’re offering free shipping to
- What shipping service you’re using
- Your profit margins
For example, if you’re offering 2-day shipping and this is costing you $20 on average – and your profit margins are slim – it wouldn’t make sense to set a low minimum order threshold.
On the other hand, if you have healthy profit margins and can ship items at a relatively low price, you could afford to offer free shipping over a lower threshold.
You can set your minimum threshold to change depending on the country you’re shipping to.
Make sure this is clear in your shipping FAQ so that your customers don’t get the wrong idea.
Keep in mind that minimum order thresholds may not work if you are shipping heavy items. These products may have their own shipping fees to take into consideration.
Take Wayfair as an example. They offer free shipping over $50, but it comes with a caveat.
Heavier items like flooring and non-standard items don’t fall into the free shipping category.
2. Offer location-based free shipping
Ecommerce stores may offer flat-rate shipping, but the truth is that Ecommerce store owners don’t have that luxury. Shipping fees will vary drastically depending on where you’re shipping to, how much your shipment weighs, and how fast you want the shipment to arrive at destination.
While you can change the minimum threshold for free shipping from country to country, you can also opt to only offer free shipping in certain locations.
Kindred Bravely offers free shipping over a threshold that varies depending on your location. However, some locations do not have free shipping at all, like Alaska and Hawaii.
Just like Kindred Bravely, you can also give your customers the option to pay a premium for faster shipping. This way, they can opt to save and have their items delivered for free, or hurry the process along if they prefer to pay more.
3. Run limited-time free shipping campaigns
Depending on your profit margins, you may not be able to afford to offer free shipping at all times.
And that’s okay.
Instead, you can run a limited-time free shipping promotion from time to time. You can even turn this into a recurring event that happens on the same day every month or every quarter.
This can help increase your average order value and protect your profit margins during the sales, since your returning customers and email subscribers will know about the date and potentially wait until this time to order everything on their wishlist at once.
Running limited-time shipping works great because you’re still offering the perk of free shipping, especially for customers on your email list, but you’re also saving on shipping costs throughout other times of the month or year.
As a result, you’re more in control of your costs.
4. Offer free shipping for new email subscribers
Online stores often use coupons for discounts on store items to incentivize customers to join their email list.
You can also offer free shipping as an opt-in incentive.
Adding free shipping for new subscribers will help you acquire more customers while also cutting down on your operations cost, since regular orders will require regular shipping fees.
You can combine this strategy with others, such as the limited-time free shipping promotions, so that the customers who joined your email list and made their first purchase with free shipping will be incentivized to order when such a promotion appears again.
5. Add free shipping to a specific product
Do your profit margins vary drastically from product to product? If this is the case, offering free shipping on every item, may result in a loss of profit if your customers decide to purchase tons of low-margin products.
You can decide to offer free shipping only on select products instead. This is a good option especially if certain items are expensive to ship in addition to having lower profit margins.
How to add a free shipping bar to your store
Whether you choose to offer free shipping on all orders, on certain items, or a minimum order threshold, a great way to show your customers what you’re offering is by adding a free shipping bar to your Ecommerce website.
And no, you don’t need to write a single line of code to get this done.
With Getsitecontrol, you can add a free shipping bar in a matter of minutes. The built-in gallery contains several templates to choose from, including sliding popups and offers for free shipping coupons, but let’s start with a sticky bar.
This is a minimum order threshold template. Click on it to preview it in action. Next, if you’re logged in, you’ll be taken to the customization screen.
Start by customizing the content of your bar: you can add a title text, change the body of the main text, and add a button.
For instance, I’ll add a button that redirects users to a shipping FAQ page. Click the
+Add button link on the button right menu, then customize your button text and add an action item. If you want to redirect users to a page, you need to select Open URL as your button action.
I’ve also customized the text that appears on the bar using the
Next, navigate to the
Appearance menu on the top menu to start customizing your free shipping bar’s appearance.
You can edit the size and spacing, the position of your bar, the bar’s theme and colors, and even add images.
If you’re inclined to do so, you can even use CSS to customize your bar, but that isn’t required at all to create something that looks great.
I’ll start by clicking on
Theme to change the colors and font.
You could customize the widget by picking images in the gallery or adding your own.
Remember to look at the mobile version to see how it will appear on mobile devices, too. You can edit mobile-only settings to optimize both versions.
When you’re happy with what your free shipping bar looks like, it’s time to set it up so it appears on your website exactly how you want it to.
Navigate to the
Targeting menu and input which pages you want your bar to show up on.
Make sure to exclude any pages you don’t want to see the bar on.
Now you can add some conditions to your free shipping bar. For instance, if you only want to offer free shipping to certain locations, you can set your bar only to appear if the user is located in a specific area.
But you can add other conditions, too. For example:
- Only show to new visitors
- Only show to visitors using a specific device
- Only show to visitors coming from Facebook Ads
- Only show to visitors using a device with a specific language
You can also customize when your free shipping bar shows up. For a free shipping bar, I want it to display at once, but I could also set it to appear after a certain amount of time on the page, and only during certain times on certain days.
If you wanted, you could also add notifications and integrations, but this would only make sense if you turned your free shipping bar into an opt-in. So let’s leave it as is and test it out.
If you’re selling on Shopify, you can display a free shipping bar based on which items a customer has added to the cart, or what the total price of the cart is.
Save and Close, and you’ll be taken to the home menu. You can activate your free shipping bar with one click:
Additionally, you can click
Preview to see what it will look like before you activate it.
And that’s it! Now you have a functioning free shipping bar that will appear based on your specific needs.
Offer free shipping and build a loyal customer base
There you have it – everything you need to start offering free shipping the smart way so that you can still generate profits while making your customers happy.
Getsitecontrol takes the frustration out of notifying your customers about your free shipping promotions. Get started for free today and create your free shipping bar in minutes!
Charlene Boutin is a B2B writer for hire specialized in creating compelling case studies, blog posts, and converting copy for digital entrepreneurs and SaaS businesses. When not writing, she can be found prototyping weird games in Unity or playing on her Nintendo Switch.
You're reading Getsitecontrol blog where marketing experts share proven tactics to grow your online business. This article is a part of Ecommerce marketing section.Subscribe to our newsletter → Main illustration by Icons8
You're reading Getsitecontrol blog where marketing experts share proven tactics to grow your online business. This article is a part of Ecommerce marketing section.