ENTREPRENEURSHIP / AUG. 28, 2014
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How to Offer Free Shipping

Nowadays, online shoppers have become increasingly price-sensitive. They are always looking for a way to get the best bargain and cut costs. As a result, many retailers are now offering their customers different free shipping options. Providing free shipping can be beneficial in different ways:

  • Wider customer base – Many shoppers are attracted to online stores which offer free shipping. Therefore, eliminating shopping costs is likely to result in wider customer base in the long run.
  • Increased profits - Research has shown that one of the main reasons for shopping cart abandonment is shipping fees. Therefore, offering free shipping is likely to result in more orders, and thus higher profits
  • Remaining competitive – With the many players in the ecommerce industry, offering free shipping can help you stay competitive

The following are some free shipping options to consider:

1. Free shipping for a specific minimum order

This is the most common method used by retailers to offer free shipping. Setting a minimum order can be a very effective way of selling more products, as well as lowering the risks associated with free shipping.

2. Free shipping on all purchases

This is where customers enjoy free shipping on all orders, in spite of the order value or quantity of items. This option makes sense for businesses which sell products which are light and small. However, in many cases, such businesses will have rules and regulations regarding destination and mode of delivery. For example, if a retailer is located in Canada, they could offer free shipping for ground delivery within the country.

3. Free shipping for special seasons

Many businesses prefer to offer free shipping only during specific times of the year. This strategy is usually effective during holiday seasons when competition is very stiff. However, depending on your products, you could also experiment with free shipping during times such as Halloween, Mother’s Day and Valentine’s Day or Christmas.

4. Free shipping on specific goods

At times, retailers choose to offer free shipping for specific goods. This usually applies for goods which have a high profit margin, thus allowing the retailer to absorb the shipping cost.

5. Membership programs

Some retailers have membership programs where customers are required to pay a certain annual fee. The members of this program will then be able to enjoy free shipping on all or selected items.

6. Loyalty programs

Other retailers offer free shipping to encourage repeat buying. This can be a very effective strategy for growing a loyal customer base, thus enjoying long-term gains.

7. Free shipping on returns

If you are dealing in items which are likely to be returned, it would be advisable to offer free shipping on returns. This applies especially to footwear and apparel. Offering free shipping on returns will enhance your chances of making more sales.

All in all, it is very important to have a clear and detailed shipping policy page on your site. This will avoid confusion among customers and prospects about the free shipping options. You could also create a frequently asked questions (FAQ) page to address common concerns.

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