Why Your Business Needs To Offer Free Shipping

Offering free shipping has a considerable influence on consumer buying behaviour. In fact, offering anything for “free” completely alters the state of mind of a buyer. Once someone acknowledges that something is free, they lose the cost-benefit analysis that normally takes place when buying something. They also perceive the benefits of free a product or service as better than they are. 

90% of consumers claim that free shipping is the main incentive that would encourage them to shop online more. 36% of shoppers abandon their online shopping carts due to shipping costs. 83% of online buyers are willing to wait for an additional two to three days to avail of free shipping. 

Online shopping and e-commerce are leading the way when it comes to retail. Furthermore, it looks set to continue growing. Nasdaq predicts that 95% of all retail operations will be facilitated by e-commerce by the year 2040. 

Online shopping isn’t just a trend. As the world becomes more accustomed to excellence in the online retail sector, customers will become more and more demanding. As one of the most significant buying influences, your business needs to find a way to offer free shipping as standard. 

How to offer free shipping

Fortunately, offering free shipping doesn’t have to cost your business a lot of money.

The costs can be covered quite easily, and you can use the “Free Shipping” label as a promotional tool. Here are a few strategies for affording the service. 

Include costs in the price

Your profits don’t have to take the hit when it comes to free shipping. Work out the percentage of price increases to cover shipping costs and include the amount in your product or service pricing.

Certain items may not end up as profitable per sale, but this could lead to long term gain. 

Invest in a delivery fleet

In some cases, it may be worthwhile for a business to invest in its own delivery fleet. When it comes to specialised and heavy-duty goods, logistics and delivery can cause massive headaches. Having company vehicles enables a business to control and maximise the efficiency of their delivery service. If you are considering this option, ensure to research HGV fleet insurance and cover all bases. 

Set minimum threshold

When offering free shipping, one of the main focuses of your business should be to increase the average order value. An effective method of doing so is to set a minimum order threshold to avail of free shipping. This encourages customers to buy more on each order. 

According to Shippo, 93% of consumers will take action (e.g. add an item to the cart) to get free shipping. 

Offer free shipping on certain items only

If you’re unsure about how free shipping might impact your margins, consider trialling the service on a limited number of items. Carefully select certain products for free shipping and run a campaign to analyse its effectiveness. 

Location restrictions

It might be possible to offer free shipping within a local radius. This can give your business a competitive advantage over local competitors. Long haul or international shipping is much more costly and complicated, so this can be a more long term target.

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