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How to Offer Free Shipping Without Breaking The Bank

Posted by Drew Melendy on Oct 29, 2019 4:11:18 PM
Drew Melendy

Free shipping feels like more of a requirement than a perk these days. In fact, 55% of online shoppers claim free shipping as the most important checkout option.

It’s one of the most effective promotions stores can offer, but it also needs to be affordable for you to turn a profit. Here are 4 ways to provide free shipping without breaking the bank!

Woman using calculator and notebook to calculate prices for her online boutique.

1. Factor Shipping Costs into Product Prices

To calculate how to raise prices without giving customers sticker shock, we recommend that you run an experiment first.

Ship for a month without discounted shipping. After, take the total number of items sold and divide it by your shipping cost for the month.

The total sum is the amount you need to make to offer free shipping. Now it’s time to bake that number into your product’s prices. 

Find an average of different categories, from jewelry to shoes to tops, bottoms, and dresses. Doing this will help you to decide where to factor in those dollars into their price point without marking up prices way beyond the item’s worth. 

Related: How to Reduce Loss & Recoup Cash with a Markdown Strategy

Woman typing in credit card number to make an online purchase- free shipping provided.

2. Create a Free Shipping Threshold

According to a Shippo survey, 93% of shoppers will take action to qualify for free shipping, with the top action as adding items to their cart.

Set an order value minimum to avoid losing money on smaller transactions and drive larger cart values to get customers qualified for free shipping.

The minimum order value calculation is simple to do. Find your average order amount and set your minimum to 10% -15% higher.

An hour glass sits on a laptop, representing a countdown to complete online purchases.

3. Apply Time Constraints

Cash in on FOMO (fear of missing out) by offering free shipping during a particular time frame. Cart expirations with countdown timers compel customers to make swift purchasing decisions that you can easily capitalize on. 

Time constraints drive impulse purchases that drive up margins. Use the pay off to assist with shipping costs.
Related Reading: How Cart Expirations Are Winning Online Stores More Sales

The Takeaway

Raising product prices, creating minimum order values, and capitalizing on cart expirations can all help you to make a return on investment even when providing reduced or free shipping options. 

But remember, there is no one size fits all shipping solutions for businesses. There might be some trial and error in finding out what works for your ecommerce store.

Remember, the only way to find out what works is to benchmark your success with sales analytics and reporting. Doing so will allow you to continue making smart business decisions when it comes to providing free shipping.

Topics: Shipping & Fulfillment

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