In today’s eCommerce arena, discounted or free shipping from online stores is not only sought after by customers, it is expected. eCommerce retail is a growing industry, primarily because of the advantages in convenience, variety, and price. Shipping costs are a major consideration to consumers shopping online, because price-hunting online only makes sense if prices are lower than they are at your local store. Not forcing consumers to pay for shipping provides an important value differentiator that is helping customers shift from traditional brick and mortar to online retail.
There are a few different ways online retailers traditionally utilize a free-shipping model. Some will offer coupons for discounted shipping on holidays or promotions. Others require customers to pay for a monthly membership to qualify for free shipping. However, the most common method of offering it is via a minimum order, where customers must spend a certain amount to qualify. Surveys have shown that most online retailers offer at least some form of discounted or free shipping. Around 80% of major businesses offer some form of free shipping during the holiday season. But it is not as easy as simply choosing a price level, posting it up on the website, and watching your sales jump. After all, what’s free for the customer is expensive for you.
There is no doubt that offering free shipping is an incredible incentive to customers, and that is increases sales dramatically. The question is, does it increase them enough to be worth it? Shipping costs typically make up 5% or more of the total cost, a significant dent in profits. Depending on the type and weight of product being shipped, the value of offering free shipping can be prohibitive, and some retailers have actually lost money through such promotions. Still, over 46.5% of small to mid-sized businesses say that offering free shipping increases their profits. The key to correctly utilizing this kind of promotion is to find the sweet spot between costs and increased sales. This model is not for everyone, for some retailers, due to the type and weight of items they sell, offering free shipping will never be profitable. For those that it is however, done properly, offering free shipping can boost sales, profits, and customer satisfaction.
How can you make offering free shipping more profitable for your business? The best way is to increase your profit per item shipped, and the simplest way to do that is by reducing shipping costs. Larger companies with multiple warehouses and large volumes of orders already receive large shipping discounts. Bulk orders of shipping materials, special rates from courier companies, and quick delivery times all help reduce shipping costs to their lowest possible levels. Most mid-sized businesses cannot compete with large corporations through in-house shipping. However, they do have another option: outsourcing their order fulfillment. Through a fulfillment provider, mid-sized businesses can gain all the benefits of professional fulfillment without spending the time, money, or effort to obtain that quality. Outsourcing fulfillment is not for everyone, and depending on the type and volume of merchandise you sell, it might be more cost-effective to fulfill your own orders. For most mid-sized businesses however, shipping choosing a fulfillment provider that can ship their product from multiple warehouses located strategically around the United States can save you a great deal of money per shipment, allowing you to offset the cost of offering free shipping and letting you grow your sales and profits.
Did you know a whopping 93% of online shoppers say free shipping would encourage them to make more online purchases! Offering a Free shipping can give you a competitive advantage against other sites and convince your customers to complete their purchase.
How to Offer Free Shipping in Your Online Store
1) Free Shipping Item
Each product has a Free Shipping check-box, by checking this a “free shipping” icon displays on the product page, and when checking out the free shipping option automatically displays because you’re buying the specific product.
2) Free Shipping Promotion
Take advantage of 3DCart's Promotion Manager, (Marketing > Promotion Manage) you can create a Promotion where a coupon code can automatically give Free Shipping when applied to the order.
3) Free Shipping by Value
By creating a Shipping Method by Value, the Free Shipping can be offered to orders where the value is over a specific amount. In example, Orders over $100.
Once you have set-up free shipping on your store, get listed on www.freeshippingday.com. Your store will be promoted on National Free Shipping Day ( December 16, 2011). Take advantage of the listing because in the last 3 years National Free Shipping Day has been increasing in popularity and is fast becoming one of the best days in sales for eCommerce sites. Make sure your free shipping offer is easily noticeable. You have a competitive advantage over other websites and you want to make sure your customer knows! [Via: Fedex Shipping]