The do’s and don’t’s of offering free shipping on your online store

woman benefitting from free shipping

Finding ways to make your online store stand out and attract customers can be a challenging endeavour. One strategy that has gained significant traction over the years is offering free shipping. While the appeal of free shipping can certainly drive sales and enhance customer satisfaction, it’s crucial to navigate this strategy with careful consideration. In this blog post, we’ll delve into the do’s and don’ts of offering free shipping on your online store, helping you make informed decisions that benefit both your business and your customers.

The do’s:

1. Calculate your margins: Before simply offering free shipping, thoroughly evaluate your profit margins. Understand your product costs, operational expenses and shipping costs. Your goal should be to ensure that offering  free shipping doesn’t reduce your profits. Instead, consider adjusting your product pricing if necessary to accommodate the cost of shipping.

2. Set clear thresholds: Implementing a minimum order value for free shipping can be a very effective strategy. This encourages customers to increase their cart value to qualify for free shipping, ultimately boosting your average order value. Make sure the threshold is reasonable and prominently displayed on your website.

3. Communicate clearly: Transparency is key. Clearly communicate your free shipping policy on your website, including any restrictions or conditions that apply. No one likes surprises during the checkout process, so be upfront about the terms of your offer.

4. Monitor and analyse: Regularly monitor the impact of your free shipping offer on your sales, average order value, and overall profit. Analyse the data to determine whether the strategy is truly benefiting your business and adjust your approach if needed to optimise results.

5. Offer options: Consider providing multiple shipping options, including express shipping that customers can choose to pay extra for (check out WumDrop’s on-demand delivery service on Bob Go!). This caters to customers who prioritise speed and are willing to pay a premium for it, while still providing a free option for those willing to wait.

The don’ts:

1. Absorb all costs: While offering free shipping is enticing, it’s not always feasible to absorb all shipping costs – especially for larger or heavier items. Don’t compromise your profit margins by offering free shipping on products with high shipping costs.

2. Sacrifice quality for speed: If you decide to offer free shipping, ensure that the quality of your shipping service remains high. Slow delivery times or poor packaging can lead to negative customer experiences, overshadowing the benefits of the offer.

3. Underestimate packaging costs: Packaging materials, such as boxes, bubble wrap, and tape, can add up quickly. Failing to account for these costs can erode your profits. Be sure to factor in packaging expenses when calculating your free shipping offer.

4. Neglect profitability: The primary goal of any business is to generate profits. Don’t let the allure of free shipping blind you to the financial realities of your operations. If your offer isn’t driving the desired results, be prepared to reevaluate and adjust your strategy.

5. Make it the sole focus/ selling point: While free shipping is a powerful incentive, don’t let it overshadow other aspects of your business, such as product quality, customer service, and branding. Maintain a balanced approach that provides value across all aspects of your ecommerce venture.

Offering free shipping can be a powerful tool in your arsenal, but it must be approached strategically. By calculating costs, setting clear thresholds, communicating transparently, and continually monitoring results, you can create a shipping strategy that benefits both your customers and your bottom line. Remember, the key is finding the right balance between customer satisfaction and maintaining a healthy business model.