Free Shipping – two of the most powerful words in e-commerce, or so many would have you believe.
It’s easy to see why free shipping is so popular with consumers. People like “free” – after all, shipping costs can add a large sum to the overall cost of online purchases. So, would a site that offers free shipping do better than a site that charges £10 for every order? Not necessarily.
Simply put – free shipping can make a difference to sales. However, some e-commerce sites who offer this service are actually losing money on certain products. Free shipping needs to be implemented appropriately in order for it to be worthwhile, and sometimes it simply doesn’t offer any benefits for businesses.
Here are a few points to consider about free shipping and e-commerce:
This is the big bit. Free shipping is completely nonsensical if you’re not making enough profit to be able to afford it. Before you offer free shipping to your customers, work out the profit margins of each and every one of your products. Once you have done this you’ll be in a better position to determine whether you’ll still make a profit on the product you’re shipping once all additional costs have been taken into account.
Repeat customers deserve to be treated well. After all, they’ve bought something from your site before and have shown loyalty by returning. Why wouldn’t you want to reward them for that? If you’re able to budget accordingly for it, free shipping is a nice incentive for returning customers who will feel honoured by your generosity. They may even recommend your e-commerce site to their family and friends.
Abandoned Carts E-mails
No e-commerce store wants customers to abandon their carts before they get to the checkout. Unfortunately, it’s common. Thankfully, there is a way to get them back – free shipping. By firing over a casual e-mail that promises free shipping if they complete their forgotten ‘abandoned cart’ order, customers may well decide that they want to go through with that big purchase after all. Free shipping to the rescue!
Like returning customers, those registered with your business (via Facebook, or a loyalty scheme) ought to be entitled to a few bonuses and rewards – and free shipping is a great way to keep these customers feeling respected and valued.
Spending increases during seasonal periods such as Christmas, so e-commerce sites often see a boost in customer sales during holiday months. Free shipping makes sense for many companies here, as any additional postage costs will likely be covered by the increase in site activity, and customers may even be convinced to throw more into their basket as a result.
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