Free shipping is a popular topic. It’s one that many people talk about and ask themselves if it’s worth the cost.
Small businesses need to make a profit to stay in business. So before offering complimentary shipping, it’s best to weigh out your options.
Whatever your shipping method, it’s important to offer some kind of incentive for customers who are willing to pay a little extra to get their package delivered faster.
Many e-commerce businesses offer free shipping, but offers like this can be risky and costly if you’re not prepared!
The How and Why of Free Shipping for Your Business
Is your business struggling to compete due to shipping prices from other online retailers? If so, you’re not alone.
Complimentary shipping is a great way to attract new shoppers and keep them coming back!
Every business wants to provide its consumers with the best possible experience, but sometimes it’s difficult to know how.
One way that you can create a better customer experience is by providing complimentary shipping.
When should your business decide to start offering complimentary shipping?
What are the benefits of offering free shipments for your online store? And what tactics do you need in place before you start giving away products as a promotional strategy?
Interested in learning more? Read on!
Who should offer complimentary shipping, and how do they do it right now in 2023 to get the best results?
A complimentary shipping option might seem like a no-brainer, but the truth is that it’s not for everyone.
One of the best ways to offer free shipping and keep your business running smoothly is by offering complimentary shipping in exchange for loyalty points!
The more customers you have, the less expensive each individual order will be, which means you can afford to ship for free without taking too much of a hit on your profit.
People are used to paying extra fees, so if they know that their purchase will include some kind of bonus – even if it’s just a discount coupon code – then they’re more likely to make an online purchase from your shop instead of somewhere else.
You should also provide people with as many shipping options as possible.
This means not only including complimentary or cheap shipping methods but also standard and expedited courier service so customers can tailor their purchase to suit best what they want or need!
What does free shipping mean?
Free shipping means the consumer does not have to pay extra shipping costs. This includes the cost of processing the order and delivering it out to their door or in-store if they prefer that method.
How does it work?
One of the biggest myths about free shipping is that it’s not ‘free’ at all. You’re just giving your customers a discount on their purchases and absorbing any losses you might incur.
Let’s bust this myth by explaining how complimentary shipping works. When someone buys an item, they receive complimentary (or sometimes called “free”) shipping at no extra cost to them.
This type of offer can work well for both buyers and sellers as you won’t have to worry as much about returns or customer service dissatisfaction if something does go wrong during delivery since nothing was charged upfront.
Is complimentary shipping a good idea for your e-commerce shop?
If you’re worried about the costs of returns or damaged products, then offering free shipping may not be right for you. But if that’s not what concerns you, it could work well!
How can companies offer free shipping?
How a company can offer free shipping is based on its business model.
The most common way for a business to offer free shipping to their consumers is by adding the costs of shipping into their product prices and making up the difference through either discounts or coupons.
How do companies offer free shipping?
Now, while the question above may seem like the one before, how a company can afford to offer free shipping, and how do companies (as in promote) their free shipping offers on their products, are two very different things.
If your product margin and revenue can support free shipping and can help your end customer avoid shipping charges, then implementing a shipping promotion is a wise incentive.
Whether it’s get free shipping on all orders, over a certain dollar amount, or a minimum order value, sweetening the deal, so to speak, is a profitable business.
Should I offer free shipping?
Should you offer free shipping on your online store or not – is a matter of digging deep into your revenue, and profit margins and studying your shipping zones.
Note: All your customers care about is when they’re going to get their products – not necessarily what it costs them.
Think of complimentary shipping as an investment in customer acquisition and retention, especially if you know that the majority of shoppers abandon carts because there are too many fees at checkout.
The best way to offer complimentary shipping on your website or store is through a product’s price plus extra taxes and duties.
Some other factors entrepreneurs should consider before making a decision include whether free shipping will affect profit margins and whether it will detract from other aspects of the consumers’ experience.
What are some ways to make complimentary shipping profitable?
The two most popular methods for figuring out free shipping is either adding a surcharge or charging per package delivered by weight.
But, if that’s not possible, then you can always charge small surcharges on top of the product costs when delivering orders over a certain weight.
When considering which route you want to go down with complimentary shipments, remember they have different impacts across various industries.
Offering complimentary shipping is not an all-or-nothing proposition. You can always offer to ship for free any product(s) that meet a certain threshold, such as an order over $100 in value or under 20 lbs.
There are also some other perks of offering free shipping, including the potential customer lifetime value, average order value, and future sales conversion rate increases.
Do I need to worry about attracting unwanted visitors?
One disadvantage that people use as justification against offering complimentary shipments is that they’re worried about new customers who will demand refunds after ordering their product(s).
This mentality fails to account for how many customers have abandoned their carts because they don’t want to pay for shipping.
How will complimentary shipping impact my customer experience?
The free shipping experience will vary based on the online shopper’s expectations.
For some customers, complimentary shipping is a pleasant surprise, and they order in droves because of it.
Other times, when there are surcharges for fulfillment by weight or unexpected costs, that can leave your brand with both an unhappy customer and low margins.”
6 Tips on how to offer free shipping and still make money
- Make sure that the price margin on your product is high enough or else you’ll end up losing. Online retailers can drive more sales by offering free shipping! But, as you might suspect, shipping costs money and usually comes out of your product’s price. The solution is choosing between different options on how to handle the expense.
- Increase product rates, so your customers cover the costs.
- A business pays the full price of shipping from its margins which means that they are left with less revenue to reinvest.
- Provide a flat rate for shipping where both you and the customer share in the costs of shipping.
- Give a discount or promotion on certain service options to your VIP clients.
- Additionally, you can also try offering free shipping on a minimum order value. This strategy can help offset the costs of shipping by helping to increase your average order size. But you’re still the one paying for it out of your margins.
Answers to 7 Frequently Asked Questions
Is complimentary shipping or free shipping really free?
It should go without saying but free shipping is not free. There is always a cost involved.
The idea of paying nothing to have a product shipped anywhere in the world sounds too good to be true, but that’s just what “free” shipping means.
The truth about this marketing tactic isn’t often felt by consumers who’ve come to expect it. Instead, businesses suffer from its effects.
The biggest impact comes for smaller e-commerce companies. Free Shipping can cost more than your business can handle if not done correctly.
How much does free shipping cost?
The cost of complimentary shipping is nothing as it’s free or perceived to be free to the consumer. But the cost of free shipping (to the shop owner) can depend on what type of company you are in and what types of products you sell.
To offer free shipping, first, you need to make sure that you are getting the best prices possible on your shipping rates. And this is where ShipSimple can help. You can save up to 70% on your first shipment. Let us show you how!
What does complimentary or free shipping do for e-commerce customers?
Free shipping benefits consumers by helping them save and by making more money available to them for other necessities.
Bottom line, the less a consumer pays for shipping costs, the more you could expect them to spend on your site.
When should I offer complimentary shipping?
That’s a great question. If you notice sales are slowing down and your marketing is falling flat, then implementing a shipping strategy incentive could be the next best step.
Offering free shipping may be the key to giving your business a competitive advantage that helps you stay ahead of your competition.
When you maximize your prices and your customer’s average order value increases, both you and your customer win!
Can’t I just show free shipping on the checkout page without making it complimentary?
Absolutely! Offering complimentary shipping is great, but offering free shipping at the checkout page means that your customer doesn’t have to wait until they reach the final step in their purchase journey.
Plus, it’s a good idea to give customers more time for second thoughts before making any purchases and help them feel more confident about their decision.
Try promoting complimentary shipping during different time periods throughout the year, like after a big sale or holiday season.
What about international shipping?
International shipping can be a challenge for small businesses and e-commerce retailers.
The good news is complimentary international shipping isn’t as hard as it sounds!
With the right logistics partner, you could offer complimentary or discounted international shipping without breaking the bank.
Just remember that when you implement this strategy, you should find ways to make up for the revenue lost with higher-priced products and other upselling techniques and strategies.
What about marketing my complimentary/free shipping?
There are a few different ways that you can market complimentary/free shipping.
Some retailers will have banners on the homepage or in their emails to announce free shipping and other deals relevant to your products.
You could also include complimentary international shipping as one of your marketing strategies by listing it alongside other product benefits when you market online, in social media posts, email blasts, and more!
To help you save on shipping and still make a profit when getting started with your complimentary shipping program – contact ShipSimple today! You could save up to 70% on your first fulfillment order. Visit www.shipsimple.ca now!
Finally, we recommend implementing complimentary returns so that customers feel like they’re getting the complete experience from shopping on your website.
For some tips about how to do this, check out Shopify: “How to Implement a Return Policy That’s a Win for Both You and Your Customers.”
5 Steps to Offering Free Shipping on Your Products and Services
1. Brainstorm and create your free shipping program
There’s a balance between offering competitive pricing and giving your customer the incentive of complimentary shipping that will compel them to buy from you instead of one of your competitors.
Find out what percentage of your buyers would be compelled by complimentary or “free” (as in 0% cost) shipping offers for each product category that you sell.
For example, 50% would likely order if they found this information at checkout; 20% might not place an order without it; 30% would order even if they had to pay for the shipping.
One fact to keep in mind:
*Note: You may want to offer complimentary shipping on some items but not others. For example, complimentary shipping might be appropriate for high-end products.
Examples of complimentary shipping incentives are:
- Free shipping on orders over $100
- Promotional shipping or limited-timed offers
- Free shipping on all orders
- Free shipping sale
- Free shipping on certain items
2. Create a free shipping banner for your website
The banner, or announcement bar, is the headline at the top of a web page that lists key features, promotions, and other important information to your customers.
It’s a headline or value proposition that grabs their attention, typically in a short sentence.
Examples of shipping banners are:
- Free Shipping on Orders over $100
- Free Shipping on all orders or
- Free Shipping for this week only!
You should create a complimentary banner to promote your free shipping incentive. This will help drive sales when customers are shopping and considering their sale.
Here is another sample that you could use in a banner ad. Don’t be afraid to promote a specific courier company over another, especially if you have better rates with that particular courier. This can help you control your risks in running a shipping promotion.
“Click Here! Complimentary Purolator ground service included with every order.”
3. Invest and create a free shipping ad
It’s important to invest in complimentary shipping ad campaigns. This can help increase the number of clicks and conversions on your site or eCommerce store.
Here are some things you can do with complimentary ads:
- Show a promo code that offers complimentary free shipping when people click it
- Run ads during holidays when your competitors don’t (i.e., Christmas)
- Be specific! Target certain cities or regions and promote certain products to them.
4. Post complimentary shipping posts on Facebook and Instagram.
Here are some best practices for promoting complimentary/free shipping on social media posts.
When you post a complimentary shipping photo or video, make sure to use the hashtags #complimentaryshipping, #freeshipping, and/or other complimentary phrases in addition to your brand name.
You can also add tags to products as well.
– Order now & get complimentary shipping! (Tag @ShopName)
– Free Shipping On All Orders Today Only!
– Get free two-day delivery with any purchase of $25+! (Tag @Shopname)
Have questions or need help with anything? Contact us today! ShipSimple is here to help businesses find the best rates on international freight forwarding services, including LTL Trucking, Full Truckload Shipping, Air Freight Services, and more!
What are your thoughts on complimentary shipping?
Have you tried it in the past, or do you plan to try it now that we’ve given some of our best tips and tricks for having success with this type of strategy?
What questions or concerns did reading this blog post make you think about?
Let us know in the comments below. We read every single one!