What About Free Shipping?

According to a recent survey* 78% of buyers surveyed said that “they would NOT purchase an item online if the cost of shipping is too high.”

The same survey shows that 95% (that a whole bunch of customers!) said they will purchase an item online if the shipping is FREE.

I’ve heard lots of grumbles (including those emanating from me) about offering customers free shipping.

The cost of shipping is on the rise – yet 95% of our customers expect us to offer them no cost shipping.

So, how do we cope with this extra expense? Let’s take a look at what some of the big box retailers are doing.

Many retailers (78% according to shop.org) plan to offer free shipping but with conditions. Think of Amazon.com – to receive free shipping you must purchase over $25.00 or belong to their Amazon Advantage program. As a buyer, it works for me – it seems I’m always purchasing a second book to receive the free shipping. Think of it as a way to help upsell your customers.

Another ‘condition’ might be “free shipping” if ordered within the next _____ hours (you fill in the blank). Giving your customers that all important reason to act now!

In the coming years you will see many retailers moving the “conditions” up. This will help level the field for all of us. As costs continue to rise competing with low free shipping barriers is hard. But, if you sell more product, it makes the free shipping expense easier. Can you offer free shipping for sales over $50.00 or 100.00? You may be surprised how many customers will take you up on the offer.

If you can factor in a way to offer free shipping do it. That means making some tough decisions about the products you carry. Is the product you are selling offering a large enough profit margin to afford the extra cost of shipping? If not, let it go and look for items that offer a better mark-up. I know, that’s easier said than done, but as you prepare your books for tax season, take a good hard look at your inventory. Red numbers will make some decisions a lot easier.

*eTatiling groups “Mindset of the Multi-Channer Shopper Holiday Survey 10/2008