Should You Offer Free Shipping?

From Apple to DKNY and Adidas to Tiffany & Co., retailers are offering free shipping to entice customers around the world.

And, why not? ‘Free’ is perhaps the most powerful word in retail, with a direct link to consumer appreciation, enjoyment, and loyalty.

But, can businesses that aren’t huge multinational brands provide free shipping and returns? Can SMEs offer free delivery? What about online retailers shipping internationally?

The answer is definitely ‘yes’. However, etailers need to be smart to make it work and to keep their businesses healthy and profitable.

• Create a promotional strategy

The impact of free shipping on consumer behaviour cannot be underestimated. In fact, it was reported last year that free delivery is the number one feature that would encourage customers to shop online with a brand. The reasons are clear: offering free shipping makes your brand more competitive, decreases shopping-cart abandonment, and makes the customer experience easier.

Offering site-wide free shipping on all products could be a costly mistake though. Unless your business sells highly expensive goods (such as diamond jewellery), offering universal free delivery would most likely not be a profitable decision, even if it attracts more customers.

Instead, offer strategic shipping: a delivery promotion that works for both your business and your customer. For example, the cost of free shipping could be incorporated into the price of the product, if you sell moderate-value goods. This promotion gives the illusion of free shipping when, actually, the price tag has been increased to recover the shipping and handling fees.

Another option is to offer free shipping when a specific shopping cart value has been met. This strategy is particularly effective for retailers selling low-value items, with customers incentivised to add more goods to their orders to reach the threshold. Amazon is undoubtedly the leading proponent of this strategy, but it can work perfectly for smaller etailers too.

• Keep shipping costs low

There are several methods that could allow an online retailer to provide free delivery. It could be offered on selected products only, featured as a time-limited promotional event, or applied exclusively to economy shipping. However retailers should be mindful about parcel weight as this can have a significant impact on overall shipping costs. Calculating the billable weight prior to selling is key.

The most important advice, however, is to keep shipping costs low. This is absolutely essential in business terms: after all, how can free delivery be offered if the delivery itself is financially impractical? For etailers shipping internationally, high shipping costs can be restrictive, making it difficult to offer free shipping as an incentive to shoppers.

Working with an international mailing solutions expert like Asendia will give you the best chance to offer free shipping to online shoppers. You’ll be able to access more competitive rates, as well as big savings on postage and expert advice on customs clearance.

Many of our e-commerce clients are fast-growing online retailers and established global brands. No matter what size organisation you are, Asendia will be able to help with the right global shipping solutions so that offering free shipping and returns as an incentive to shoppers won’t be out of reach.