As you can see online, there are more and more handmade businesses that offer free shipping to their customers – to retain and attract customers, but don’t jump into it too quickly.You need to learn first the tricks and mistakes to avoid before giving free shipping on your items.
Simply put, free shipping doesn’t work for all businesses, at least when it’s truly free shipping across the board, meaning that merchants absorb 100% of the shipping and handling costs for all online purchases. But, while all-inclusive free shipping may not be an option for you, there may be ways to offer meaningful shipping deals that do work for your business.
Here are some ways to offer free shipping without losing too much profit:
- Free Shipping with Minimum Purchase.
Compared to free shipping on everything, this is a much more common and realistic tactic for handmade sellers. Setting minimum order value thresholds is a way to attract more orders and reduce risk.
- Free Shipping to Certain Locations.
As mentioned, many sellers offer free shipping only to buyers in the contiguous U.S. Taking it a step further, many larger retailers are now offering “free ship to store,” where consumers can pick up merchandise at their local brick and mortar store, a tactic that can lead to in-store purchases as well.
- Free Shipping on Certain Handmade Goods.
It’s common for sellers to offer free shipping only on certain items, those for which their margin is greater, and they’re able to more easily absorb the shipping cost. Rather than only choosing high-margin items, which may include a range of SKUs from a variety of product categories, you may want to make some exceptions for lower-margin items so that your offer can be more easily communicated to your customers.
- Free Shipping on Returns.
If you’re a handmade apparel or footwear seller, or if shoppers have issues with product shipping before, this one is particularly appealing for buyers. And if you have a high rate of returns, offering free shipping on those returns should be considered and tested, as it’s very common and expected for many items.
- Free Shipping at Certain Times of the Year.
Many sellers choose to offer free shipping periodically, rather than all year round, and some will only offer it during the holidays when their competition is more aggressive and when consumer expectations for free shipping are at a peak. Depending on your products, it is also a good idea to test free shipping offers at other times of the year, such as Valentine’s Day and Mother’s Day.
- Loyalty Programs.
Some owners provide extra incentive to encourage repeat purchases, such as offering free shipping to their most loyal customers. This can be a great way to experience the longer-term gains of free shipping by increasing the lifetime value of your customers.
- Member Programs.
An increasingly popular method among handmade sellers is to offer a fee-based member program, in which merchants charge customers an annual fee in exchange for free shipping on some or all items.
- Flat-Rate Shipping.
This is another one that really isn’t free, but by offering flat-rate shipping, you will encourage larger orders, and in many cases your customers will pay less for shipping than they would have otherwise. A downside, however, is that it can discourage small orders and become a barrier to those that simply want to buy small items or quantities.
But what is it with free shipping anyway? Why has it become a necessity for many shoppers?
This infographic by Consortemarketing lays out the main reasons why online retailers should consider offering free shipping:
Testing different offers is key to finding the most profitable free shipping strategy for your business.
So what is your shipping strategy? Please let us know in the comment box below.