Why You Should Offer Free Shipping to Your Customers
With the economy in shambles, many small businesses are frantically searching for ways to cut spending and to get every last dollar possible out of their customers. That’s why the idea of offering free shipping seems counterintuitive to those business owners in the money-saving mindset. But I’m going to show you why kicking in a few bucks for shipping could prove to be the best decision your business has ever made.
1. It removes a roadblock—When you’re trying to make a sale, it’s your job to remove as many roadblocks that keep people from buying as possible. Did you know that 43% of online shoppers said they abandon a purchase because the shipping charges are too high? It’s true. Heck, I just did it last week, so I know it’s true. Simply put, shipping and handling charges are often a deal breaker. Remember, your consumers are going through this economic recession too, so they’re also looking for ways to cut their costs.
2. Your customers want it—One recent study found that “Free shipping is the No. 1 offer that customers look for and will respond to in an email.” In other words, your customers want free shipping, and it’s very important to them. And if you plan on riding out this recession, you better do everything you can to give your customers what they want. What do you think will cost you more: pitching in a few bucks to cover shipping or losing up to 43% of your customers because your shipping rates are too high?
3. It keeps customers from going to your competition—In a late 2008 comScore study, 72% of those surveyed said if an online retailer stopped offering free shipping, they would leave them and do business with one of their competitors. In other words, by not offering free shipping, you’re actually sending business to the competition. As grateful as your competitors might be for this, I doubt that’s part of your business plan for success.
Now, if you’re still concerned about offering free shipping to your customers, there are other things you can do. You can start by simply reducing your shipping costs. If you offer shipping for just a few bucks, you usually won’t lose any sales. The main point is that customers are just looking for a good deal on shipping. They don’t want to pay $10 shipping on an item that retails for $9.99.
Another thing you can do is offer free shipping to customers who reach a certain purchase threshold (e.g. Get FREE shipping with purchases of $50 or more!). The best thing you can do is to always be testing. Find the perfect balance of high sales and low losses to maximize your profits.
Does your business offer free shipping? Why or why not?
September 14th, 2009 at 2:01 pm
Hi Eric,
Great subject that is very relevant to me right now. My margins are incredibly tight as it is, but Im almost positive its the shipping thats keeping people from buying. My shipping is based on weight and distance and the packaging needed to protect my product is also a cost both real and added to the weight of the shipping. Any creative ideas?
September 16th, 2009 at 7:27 am
[...] Why You Should Offer Free Shipping to Your Customers [...]
September 21st, 2009 at 7:02 pm
Mike–
Sorry for taking so long and for the brevity of this, but I’m out of town right now.
Anyway, a couple of things to consider. First, does your website use a shopping cart? Perhaps consider adding a 1 question survey that comes up when shoppers abandon the cart asking why they are doing so. have a few obvious choices (one of which being “shipping rates too high”). this could help pinpoint if this is truly the problem.
I also know some “shopping cart experts” recommend simply including the cost of shipping in the sticker price of your goods and then labeling it as “Free shipping” or “shipping included.” However, I haven’t looked at any studies as to if this is truly effective or not, so I’d definitely look into it before trying it (or perhaps split testing it in an email/PPC campaign).
September 8th, 2010 at 3:26 am
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