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How You Can Offer Free Shipping Without Sacrificing Your Profits?

October 14, 2017

We all know that surviving in the e-commerce world is not easy and requires a great deal of effort in coming up with innovating ideas to attract relevant customers and stay ahead of the competition.

Free shipping is one of the ways you can attract visitors to your site. It is a magic potion for the online customers and can increase your sales manifold in no time. As a consumer, it’s great — who doesn’t love free? But if you have just started your business and trying to find your foothold in the market, it can be a little intimidating. Free shipping has become more common these days and therefore, many customers assume it to be the default feature of the order. However, free shipping not only benefits the consumers but also many retailers have experienced benefits, including a sharp increase in sales and customer retention which outweigh the costs in the long run.

We have come up with few ways which you can use to facilitate free shipping for your customers without losing your own profits:

  • Minimum order capping for free shipping:

Gather information about your average order price from past purchases and use it to your advantages. Provide free shipping at a minimum price point that’s above your average order in general. For example, free shipping is available on orders over $50, a customer who has $49.99 or less in their shopping cart will surely purchase an additional item to get the deal.

  • Limited Time Free Shipping:

Use the holiday season for providing free shipping as this is the time most people shop in bulk.  This can be a smart trigger to boost your sales by providing a short window for free delivery of products. You can also offer free shipping on specific days or hours. Like a flash sale, where you create excitement for the consumers by giving them free delivery without capping the price.

  • Target your best customers:

Do not open your free shipping for the masses, instead target a select group of customers you can email to increase lifetime value. Have a loyalty or rewards program in which you offer free shipping for those customers only. This will enhance your customer relationships and will make them feel valuable.

  • Create a flat shipping rate:

A sudden change in pricing while shopping online is the surest way to scare away your customers. A consumer expects to know that cost they are likely to pay for their shopping. It is upsetting to be slammed with an exorbitant amount of charges at the end of the checkout process. Keep a flat shipping rate and let the customer know before-hand. This will ensure transparency and will build trust with your consumers.

  • Use a one-time fee:

Amazon has nailed it perfectly. With Amazon Prime membership, the consumer only pays a one- time fee for premium shipping services throughout the year. This entices customer loyalty as well when they receive unlimited free two-day shipping at no additional cost.

  • Offer free shipping on special products:

You can offer free shipping on products with higher profit margins, on products where you have excess inventory or any special item you’re looking to promote.

  • Reduce your overall shipping costs:

Work with your freight carriers and come up with a flat rate to ensure saving on your shipping. This will help you to keep up your profit margins and not impact your services as well. Customer will also be happy with the low cost of shipping or free shipping offered on their purchases.

  • Hide the Shipping Cost in Price:

Including the shipping cost in the price of the product can also save you. If your product becomes too expensive after adding the shipping cost to it, you can make it part and still make a profit.

  • Bundle Products:

Having tied up with your reliable freight carrier you can offer free shipping for more than one product. This will reduce the cost of shipping for you and the products offered will also complement each other.

  • Bestsellers:

Offer free shipping on your high performing products by gathering information from your inventory. You can choose top three products which give you the best profit margins and attract your customers to buy these products with any other purchases to avail free shipping.

  • Certain Locations:

Consider your delivery locations and choose certain areas to offer free shipping where you see maximum products being delivered. This will save time and money for you to ship products in those locations.

Now that we have many ways to offer free delivery of products to customers, let us also understand why you should offer free shipping to your consumers:

Shipping services play a pivotal role in an online shopper’s decision of where to use their money and what products to buy:

  • Numerous shipping options provided by retailers generate trust and loyalty in their customers and increase their revenue steadily.
  • Free shipping entices customers to purchase more items as they calculate their order while browsing their products and looking at the price of each item.
  • Consumers often abandon their shopping cart when they are slammed by an additional delivery cost. Being transparent in the process increases the likelihood of purchases and customers often return to the same site for their next purchase as well.

How to pay for free shipping:

If you are applying the above methods and providing a free shipping service to your customer, who is actually paying the shipping cost? Someone has to bear the cost of the delivery and therefore, you should consider the following:

  • Factor shipping into operation and pricing:

Check the shipping costs from the initial stage itself and include it your financial model. Consider the inventory for it.

  • Market free shipping:

Create awareness about your free shipping service to your customers to make use of the option. Entice them by printing it with every promotion and let your customers know about it well in advance.

  • Focus on up-sells and cross-sells:

When more items are added to the cart, it reduces the shipping cost tremendously. Selling complimentary items also becomes easy with free shipping.

  • Free shipping is also a long-term play:

Sacrifice the short-term loss for a big-time payoff by establishing a relationship with your vendor to reduce the shipping cost. Long-term business rates differ from short-term rates.  Loyal customers will keep your business going and you can keep using the shipping services from your vendor and creating a win-win situation for all parties involved.

All these factors will help you keep your shipping cost low and customer traffic high. Gain lifelong customers and their loyalty by just cutting down on the shipping cost at times with the above tricks.

You can also avail detailed advice and consultation from the experts at WebBee Global which is known for their impeccable services in the e-commerce world. They cater to clients across the globe and have separate development teams for different technologies and e-commerce platforms. They have a team of consultants and strategists to facilitate new business owners with market insights and expertise in growing their business right from the start.

Their solutions are unique and creative to suit their client’s requirements and challenges. They are pro-active in their approach and invest time in knowing their customers well before offering them the most feasible and scalable plans.

Grow your business with expert planning and implementation of e-commerce strategies with WebBee Global and keep your customers happy.