When customers buy a product you sell, they typically have several choices. They can purchase from you, search a large online retailer, or see if any local stores have it in stock. Each option has its advantages and disadvantages, and your aim is to provide something unique or make ordering from you the best choice for your customers. One advantage that many larger stores offer is free shipping. If you’re considering whether this is a good option for your business, keep reading to discover how you could implement it.
Don’t Make It All or Nothing
Free shipping doesn’t need to be available for every order. Even major online retailers like Amazon only provide free shipping when customers meet a certain spending threshold or join a membership plan (like Prime for Amazon). If offering free shipping all the time feels overwhelming, think about providing it for a long holiday weekend or just one specific day. You could choose your company’s anniversary, the day after Thanksgiving, or a random Tuesday in March. Even if you can’t provide free shipping all the time, making it an occasional perk can attract 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.