How to offer Free Shipping even if you can't afford to.

Posted by Temando on Monday, March 09, 2015

Free shipping will increase your conversions.

Free shipping will erode your margin.

These are both widely accepted facts. Additional shipping costs is frequently brought up as one of the main reasons for cart abandonment and a free shipping option can go a long way to closing those sales. That’s all well and good for larger businesses with the scale and budget to offer universal free shipping but for many businesses the cost is prohibitive. That doesn't mean that you should forget about free shipping, though. With 93% of online shoppers willing to take action in order to qualify for free shipping you just need to be creative in the ways that you offer it (UPS Pulse of the Online Shopper 2014).

Here are 4 ways you can embrace free fulfillment without burning a hole in your pocket:

  1. Have a free shipping threshold.

This is a tried and tested method of offering free shipping. Not only are you able to guarantee an amount of revenue before you pay for free shipping, you're also able to increase your Average Order Value (AOV) and sell additional items per order. 58% of online shoppers surveyed have added additional items to an order to qualify for free shipping (UPS Pulse of the Online Shopper 2014).

  1. Use Free Shipping as a Loyalty or Conversion tool

Instead of offering free shipping to everyone, offer it as a special deal to certain shoppers. For example, entice shoppers to sign up for your newsletter or loyalty club with a free shipping offer. You’ll close the sale and also be able to grow the customer through your email campaigns.
Similarly, you could use Free Shipping as a perk for customers when you send them cart reminder emails, letting them know that if they complete their purchase you’ll ship it for free. Both of these strategies allow you to benefit from free shipping by offering it to price sensitive shoppers without offering it to every single customer.

  1. Offer very basic free shipping

A really great way to look to include free shipping in your fulfillment mix is to offer your most basic service for free and then charge extra for other services if the customer wants more. For example, a brand that has a retail footprint could offer collect-from-store for free and charge customers for all shipping levels. If you don’t have the luxury of stores then you could offer a slower, economy service for free as well as an express option (or two) for an additional charge. Not only does this approach allow you make the most of offering free services, it also allows you to offer your customers a better shipping experience by allowing them to choose how they would like to receive their packages.

  1. Offer free returns

If you still feel that you can’t afford or don’t want to offer free shipping then you might want to think about free returns. All too often, retailers will offer free shipping and then charge the customer if they need to return an item that is faulty or doesn't fit. If anything this should be the other way around - charge them for the initial purchase and then if somethings not quite right, offer to fix it for free (providing the return meets your RMA criteria). Offering a free, straightforward returns process will help build shoppers’ trust in your brand and help you to convert more sales in the long-term.