How to Offer Free Shipping on Your Products

It is possible to offer free shipping on your products with a little bit of creativity. Here are some ways you might consider doing so:

Free shipping is a great way to increase sales. But, it can be difficult for small businesses to offer free shipping on their products. This article will teach you how to offer free shipping on your products.

While free delivery on online purchases used to be a luxury, it has already become a standard expectation among contemporary consumers. There are two sorts of free shipping offers: conditional free shipping (free shipping under specific conditions) and universal free shipping (free delivery on all orders).

Both offers are pricey, but they don’t have to break the bank.

We’ll look at each sort of offer in detail and discuss how to make them work for your business, regardless of your margins or order volume. We’ll also look at ways to drastically reduce delivery costs across the board.

Conditional Offers Shipping is completely free.

Offering free delivery on everything may seem appealing from a marketing standpoint, but it’s seldom a lucrative strategy for small companies.

Here are five methods to add conditional free shipping offers to your store:

1. Establish a minimum order value.

An easy strategy to prevent losing money on little transactions is to provide free delivery with a value threshold high enough to safeguard your profits.

It’s also an efficient approach to persuade consumers to make more purchases. According to BigCommerce’s 2019 Shipping Report Survey, 84 percent of shoppers have added an item to their basket just to satisfy a free shipping minimum purchase requirement.

Free delivery thresholds are generally easy-to-understand amounts divided by five or ten, such as $25, $50, or $100. Your store’s limit should be high enough to prevent you from losing money, yet low enough to be considered a reasonable offer. So, where do you look for that sweet spot?

You’ll need to utilize some of your store’s recent analytics in this calculation to get your zero-loss shipping threshold:

(Average Shipping Cost / Gross Profit Margin) + Average Order Value = Free Shipping Threshold

The figure you obtain is the smallest amount of free delivery you may ask for without putting a dent in your profit margin.

Assume that your store’s average order value is $60. Each order costs an average of $9.50 to ship, and your gross profit margin is 40%. The formula for determining a viable free delivery threshold is as follows:

$60 + ($9.50 / 0.40) = $83.75

This value would be rounded up to $85 or $90 to give buyers a straightforward and digestible amount.

If this restriction proves to be too costly to gain momentum with your consumer base, you may easily reduce it at your own expense. Experiment with different minimum order criteria using the formula below:

((Proposed Threshold) Average Order Value) Gross Profit Margin) Free Shipping Cost = Average Shipping Cost ((Proposed Threshold) Average Order Value) Gross Profit Margin)

Here’s what the test calculation would look like if you could only endure a $75 minimum order with the same metrics as above:

(($75 $60) 0.40) = $3.50 = $9.50

As a result, you can anticipate spending no more than $3.50 out of pocket for each purchase that ships for free.

2. Provide free shipping on a limited number of items

Most businesses don’t earn a big profit on every item they sell, and shipping prices vary a lot based on the location, size, and weight of the package.

Even a high-end eyeglasses store, for example, offers cart-stuffers such as lens cleaners and microfiber towels. Free shipping on a low-margin purchase like this might quickly put you in the hole.

Another option is to limit free delivery to certain items. This method works on goods with a low delivery cost and a high enough markup to keep the business profitable after shipping expenses are deducted.

The main purpose of this effort is to get things into shopping carts, regardless of whether or not they qualify for free delivery. Free shipping is advertised on a variety of particular product categories in the HSN campaign below, in the hopes of attracting buyers seeking a new laptop, kitchen appliance, or cosmetic product.

(Photo courtesy of HSN)

While it’s doubtful that every laptop in HSN’s store will qualify for free shipping, those that do will be shown alongside other (and maybe better) ineligible products, enhancing the chances of a high-value sale in any case.

3. Make it a marketing opportunity

Another approach is to provide free delivery for a short period. We know that generating a feeling of urgency in product descriptions is an efficient approach to boost sales, and the same notion applies to discounts or promotions.

Provide free delivery to consumers during a holiday or to celebrate a current event. Reduce or eliminate the minimum criterion if you currently provide free delivery on purchases above a specific amount.

The goal is to entice potential purchasers and convert them from window shoppers to paying customers. Create an eye-catching post for your social media accounts, send a digital flier to your email marketing list, or invest in some online adverts to promote your promotional activities.

Stunning graphics and holiday-themed imagery are used to promote this free shipping promotional event. (Photo courtesy of Origami Owl)

4. Provide free standard shipping.

Most carriers provide a low-cost, delayed delivery alternative, such as USPS Parcel Post, which is often less expensive than Priority Mail. Offer a low-cost delivery alternative for free to save money on free shipment.

Allow consumers to upgrade to speedier delivery by adding the shipping amount to their total at checkout.

Customers may choose to enhance their order’s delivery speed after providing their email and shipping address. (Image courtesy of Grande Cosmetics)

You’ll spend less on shipping while preserving the attraction of delivering it for free using this strategy, and many buyers would gladly pay for the faster shipment if given the option.

5. Make use of Amazon Fulfillment (FBA)

Partnering with Fulfillment By Amazon is an easy method to give free delivery on your Amazon purchases.

Most FBA items are eligible for Prime delivery, which is both free and lightning quick. You’ll already have a ravenous client base since 200 million people pay for Prime membership to obtain access to that facility.

This advantage comes with the ease of having fulfillment handled by a third party. In addition, being a member of the FBA program benefits Amazon sellers in a variety of ways, including improved search ranks and “buy-box” placement.

While you won’t pay for delivery directly, FBA will charge you a variety of extra costs.

Small firms may frequently achieve the promotional advantage without incurring a significant cost by using conditional free delivery. However, in certain circumstances, it’s preferable to remove the requirements and give free delivery to everyone.

Offering Free Shipping on All Orders

Customers like simplicity and the all-encompassing benefit of free delivery may be key sales drivers. This is particularly true in the era of Amazon (and other behemoth stores), which offers free delivery on over 100 million products.

If your consumers can get the identical things for less money on Amazon, you’ll have to provide sitewide, limitless free delivery to remain competitive. There are two primary approaches:

• Include shipping costs in your pricing.
• Shipment costs should be included in your margins.

This strategy makes use of the term “free” to increase sales. The cost of transportation is included in the price of each item, resulting in higher product pricing that covers the cost of shipping without the client having to think about it.

The fact is that free delivery is often prioritized by buyers above the item’s usual price. Due to the inclination of buyers (and people in general) to unreasonably appreciate free items, the perceived value of free delivery is typically far larger than economical—or even discounted—pricing.

Similarly, the price of an object has a significant impact on its perceived worth. Because more expensive things are typically seen as “better,” merely changing the price of a product might improve consumer appeal.

When both of these factors are considered, customers are more likely to choose a $50 item with free delivery over a $40 item with $10 shipping.

Adjust your store’s price depending on the average order value, amount of goods per order, and delivery cost. Then promote the alluring ease of free delivery on all orders.

You’ll need strong profit margins and tight control over fulfillment and shipping expenses to make this strategy work.

However, if you’re fortunate enough to have a good mix of solid profits and cheap delivery expenses, unconditional free shipping may be a no-brainer. Jewelry, watches, collectibles, fashion accessories, cosmetics, and supplements are examples of small, expensive items that travel in manageable, lightweight packaging.

The same may be said about things made in-house and sold at a large retail markup, as well as previously owned items.

“Offering free delivery is a no-brainer if your things are inexpensive to transport yet have large profit margins. Take, for example, a piece of jewelry that sells for $1,500 and has a 50% profit margin. When compared to the promotional value of free delivery, paying a $5 shipping cost yourself is a minor amount to pay.”

― eBay Platinum Powerseller John Lawson

Once free delivery is given, the key to this strategy is to keep a tight eye on sales. Most likely, you’ll notice a rise in order volume that compensates for the reduction in margins. Consider switching to a new delivery model if you don’t observe a favorable trend.

Ways to Charge for Shipping That Aren’t Expensive

Many sellers just do not have the means to provide free delivery. Fortunately, there are alternative options for remaining competitive while still passing on transportation costs to the customer.

For many buyers, the lack of free delivery isn’t a deal-breaker, but there is one issue that is: unexpected expenditures.

An unexpected shipping price at the checkout is the leading cause of shopping cart abandonment. Extra expenditures are the cause of a startling 49 percent of abandoned orders, according to a 2021 research by The Baymard Institute (seen below).

Being open with your rates is one approach to counteract this. Long before customers reach the checkout stage, be honest about all shipping rates and explicitly disclose any fees.

Of course, the simplest approach to avoid delivery charge sticker shock is to provide free shipment. If that isn’t an option, here are three more methods to charge shipping expenses in a shopper-friendly way:

Provide a flat-rate shipping fee.

Customers pay a single, uniform charge to send their purchases, independent of factors such as location or size.

When free delivery isn’t an option, flat-rate rates are the next best thing for two reasons:

• They’re clear and simple to comprehend.

  Buyers will know what they’re getting into if you display something like “$4.99 shipping on all purchases” prominently on your site header. It’s simple for them to perform the arithmetic, and it prevents sticker shock at the register.

  

  This flare-rate commercial graphic caters to the demand for simplicity among current web shoppers. (Image courtesy of Micro Detailer)

  Customers will be happy and leave fewer shopping carts if you advertise the flat-rate shipping charge across your site.

• They urge customers to make greater purchases.

  If shipping is the same for a $5 purchase as it is for a $50 one, customers may typically consider the latter to be a better value.

  A well-known example of this occurred in 2016 when supplement store GNC switched to a flat-rate delivery policy. Despite the fact that the firm has subsequently switched to alternative delivery methods, its research revealed that customers were willing to pay more merely to make the flat-rate shipping charges “worth it” — and sales followed suit.

There are a few disadvantages to flat-rate shipping. For one thing, it may deter minor orders: customers are reluctant to pay a $5 delivery cost if their initial purchase total is near to that amount.

Flat-rate delivery is a successful approach if your shop can afford to lose a proportion of low-value purchases.

Another factor to consider is that you’ll almost certainly have to pay a share of the delivery fees. To be appealing, flat rates must be cheap, yet shipping prices might fluctuate substantially from order to order. To prevent the discrepancy detracting too much from your Conclusion, choose your flat rate prudently.

Fees for actual shipping

You may always charge the real cost of delivering an order if you can’t bear the expense of free shipping or the possible difference after a flat-rate price.

Keep in mind that this isn’t a good tactic for items with a lot of rivals. This strategy works well for hard-to-find items, popular brands, or handcrafted items. Shipping expenses aren’t a barrier in circumstances when customers are ready to pay for exclusivity—just make sure that shipping rates are clearly stated at every stage of the process.

The simplest method to accomplish this is to use a shipping calculator, which is available on most eCommerce systems. On the plus side, you won’t lose money on delivery, but you’ll probably see more shopping cart abandonment than with other models.

Combine low product prices with inflated fees to create a winning combination.

Although this technique of charging for freight is common, it is not the best option for online shops.

It’s the kind of pricing gimmick you’d see on TV infomercials: the product is attractively cheap—often at or below wholesale cost—but the client has to pay an exorbitant shipping and handling charge to make up for the shortfall.

This strategy works in some sales channels since the high delivery price isn’t shown until the checkout process is far started.

The additional cost (referred to as “P&H” or “processing and handling”) for this attractively priced bundle comes out to $23.97—or $33.97 in total. (Source: DepilSilk)

According to the above-mentioned shopping cart abandonment statistics, these unexpected checkout costs have the potential to cause online buyers to leave their purchases entirely. As a result, we propose that you look into alternative solutions for controlling your delivery expenses.

Getting a Better Deal on Shipping

It’s critical to keep a close watch on prices no matter how you model your shipping promos.

If you provide free delivery, it’s extremely crucial to conserve every penny—especially on mid-and low-margin items. You’re practically bleeding earnings if you don’t send every order at the lowest available shipping fee.

Here are two methods for ensuring that you pay the lowest possible rates on every order you ship:

Use software to compare shipping rates.

If you don’t use software to compare shipping rates, you’re spending more than you need to—it’s that simple. Most programs, like ShippingEasy, provide a variety of shipping options at discounted rates, thanks to longstanding partnerships with carrier companies.

Even vendors who send similar items, such as subscription boxes, may save money by checking transportation prices (since some are cheaper than others when shipping to specific locations). Shipping comparison software is also necessary if you send a range of package sizes and weights on a regular basis.

Shipping software costs vary depending on the supplier and service bundle, but it’s a very cost-effective solution. For low-volume vendors, ShippingEasy’s plans start at $5 per month. Even if you submit 3,000 or more orders every month, you’ll just pay 2 cents per order. ShippingEasy’s reductions go well beyond just paying that cost.

Collaborate with a Fulfillment Service Provider

Using an order fulfillment business to manage your storage, packaging, and shipping is advantageous in a variety of ways, particularly when it comes to shipping expenses.

These third-party companies distribute large numbers of products, resulting in significant discounts from the carriers they utilize. In order to stay competitive, most fulfillment firms pass these savings on to their customers.

One of the most common reasons small businesses employ fulfillment services to dispatch their purchases is because of this benefit.

I undertook an in-depth analysis of the cost savings from outsourcing fulfillment—when partnering with ShipBob, the top provider in our order fulfillment firm buyer’s guide, the monthly cost of shipping alone was $500 lower, and the overall savings for our case-study example was $15,408 per year.

Furthermore, outsourcing fulfillment frees up a significant amount of time that may be spent on other lucrative activities such as marketing, product sourcing, or company growth.

Conclusion

Free shipping is a terrific marketing strategy for increasing sales and decreasing cart abandonment, and it’s frequently a need in today’s eCommerce industry. According to a recent poll, 50 percent of buyers shun companies that don’t provide free delivery, and another 77 percent have abandoned an order owing to inadequate shipping alternatives.

To build a program that succeeds, most small sellers combine conditional free shipping with strict shipping cost constraints.

There are alternative shopper-friendly methods to charge a delivery cost if free shipping doesn’t match your business model. Being transparent is just as important as the amount you charge the client, no matter how you handle your eCommerce shipping plan.

To keep operations simple and shipping costs low, we recommend partnering with a third-party fulfillment provider for your online orders. ShipBob specializes in working with startups and small businesses to provide virtually-free pick & pack, deeply discounted shipping, and 99.95% order accuracy.

Frequently Asked Questions

How do sellers offer free shipping?

Sellers offer free shipping in order to attract more customers. When the customer places an order, they are charged a flat rate for shipping and handling which is then offset by the seller’s cut of the sale.

How much should I offer for free shipping?

This is up to you. You need to consider how much profit your business will make from shipping items, as well as the cost of materials in order to ship an item and other factors like overhead (i.e., rent) that may come into play when calculating a fair price for free shipping.