Delivery and Packages

When consumers order a product that you sell, they usually have a few options. They can order from you, look for it on a large online store, or check to see if any local brick-and-mortar stores carry it. There are pros and cons to each of these methods, and your goal is to either offer something that nobody else does or make it so ordering from you is the right choice for your customers. One perk that many larger stores can offer is free shipping. If you’ve wondered whether that’s the right choice for your company, read on to learn how you might be able to make it work for you.

Don’t Make It All or Nothing

Free shipping does not have to be offered on every order. Even some of the biggest online stores, such as Amazon, only ship for free if the customer orders a certain amount of merchandise or purchases a membership plan (Prime, in the case of Amazon). If the idea of free shipping is too big for you to consider on an “all the time” or even a “some of the time” basis, consider offering it for just a long holiday weekend or even one particular day. Choose your company’s anniversary date, the day after Thanksgiving, or a random Tuesday in March. Even if you can’t offer free shipping all the time, using it as an occasional benefit will draw in new customers.

Raise Your Prices

If it’s been a while since you’ve raised prices or you are at the lower end of what’s competitive in your area or in your industry, don’t be afraid to nudge the prices up a bit to cover the free shipping. Of course, there’s an art to this and you have to find a balance. Raising prices 25 percent isn’t going to fly, but raising them five percent now and another five percent six months or a year from now won’t be as noticeable and can cover some of your shipping costs. Combining this with the strategy of offering the free shipping only occasionally or only on orders over a certain dollar amount will be even more helpful in minimizing the effects to your overhead.

Make Your Work More Efficient

Learning how to set up an efficient order fulfillment process will help you save time and money that you can allocate toward covering the free shipping you offer your customers. You’ll want to work with your staff to carefully review all of your processes to see what you can change to make them run more smoothly and efficiently. An independent audit of your processes might be the best money you can spend, as it will point out ways that your entire operation can improve, raising your bottom line over time.

Test Your Results

The only reason you should offer free shipping is that it can bring in more business and prevent customers from going elsewhere to obtain the products you sell. If it doesn’t work, then there’s no real point to covering the shipping costs. The way you’ll determine the effectiveness of offering free shipping is by conducting A/B tests. Find out what percentage of your website’s visitors end up making a purchase when an item is offered with and without free shipping. You’ll need to repeat the tests periodically and make decisions with the information you glean.

Deciding when and how to offer free shipping can be an exercise in trial and error, but in time, you will be able to determine what strategy is most profitable for your business while keeping your customers and your employees satisfied.