Free Delivery Marketing : Why Offer Free Shipping?
Free shipping is a shipping amenity granted by a corporation or vendor that does not levy supplementary fees for shipping the commodities to their patrons. This indicates that the cost of shipping is comprised within the price of the product, and customers are not beholden to pay any added fees to get their possessions delivered to their doorsteps. Certain corporations and vendors may tender free shipping as an enticement or as an advantage for customers who expend a specific sum of money on their website or store.
Free Shipping types
Conditional and unconditional free shipping are two distinct marketing strategies. In the subsequent sections, we shall elucidate on the meaning of each model and delineate the steps required to execute them successfully on your e-commerce website.
Conditional Free Shipping
Conditional free shipping refers to a shipping offer that is only available under certain conditions or requirements. For example, a retailer may offer free shipping on orders over a certain amount, or to customers who live within a certain geographic region. Another example is a promotion that offers free delivery on a specific product or product category. These types of shipping offers are typically used as a marketing tool to encourage customers to make a purchase or to spend a certain amount of money.
How to Set Up Conditional Free Shipping Offers in Your Store
1. Product-Specific Shipping
A marketing maneuver known as a “free shipping promotion” offers patrons of a retail website or physical store the chance to receive their selected items sans additional fees for transportation. Such a maneuver is commonly employed to entice clients to acquire certain merchandise and promote select goods.
2. Free shipping during certain occasions
During certain designated periods, a vendor or e-commerce platform may extend a promotional offering of gratis shipping for purchases made within the given time frame. These intervals can encompass events such as the yuletide season or shopping events like Black Friday, as well as particular months, for example, November or December. These marketing incentives are frequently implemented to stimulate and impel patrons to procure items during these windows, presenting a desirable means for consumers to economize on their orders.
3. Set a basic threshold levels
In order to provide gratis shipping without adversely affecting the profitability of your enterprise, it is imperative to establish a minimum requirement for orders. This requirement should be computed by taking into account the mean expense of shipping, the gross profit margin of the establishment, and the typical order value. To derive this threshold, the following formula can be utilized:
(Mean Shipping Expense / Gross Profit Margin) + Typical Order Value.
For instance, if your establishment has an average order value of $50, an average shipping expense of $7.50, and a gross profit margin of 30%, the minimum threshold for free shipping would be $75. This infers that customers must expend at least $75 to be eligible for gratis shipping.
4. Subscription-Based Shipping
Subscription-based shipping is a service that enables customers to opt for recurring deliveries of items or goods, such as groceries, personal care products, household essentials, or apparel, at a set interval. The purchaser is usually required to pay a monthly or yearly fee for this service and can customize their delivery schedule and order preferences. This method is frequently employed for convenience, removing the need for frequent trips to the store and saving time.
Unconditional free shipping
Unconditional complimentary shipping denotes a shipping principle in which an organization or retailer presents gratis conveyance for all purchase transactions, without regard to the purchase value or the shipping location. In essence, this implies that patrons are not required to satisfy any specific criteria or provisions to be eligible for gratis shipping. It is a means for establishments to draw in clients by proposing an effortless and economical method to obtain their acquisitions.
How to Set Up Conditional Free Shipping Offers in Your Store
1. Deduct shipping charges from your revenues
To elicit the amount of shipping fees from your earnings, it is required to subtract the expenditure of shipping from the gross revenue value. You can achieve this by deducting the cost of shipping from the overall sales revenue. For instance, assuming that your total sales revenue amounts to $10,000 and the shipping expenses equal $500, your net revenue after deducting the shipping fees would be $9,500. It is of utmost significance to maintain meticulous records of your shipping expenditures and revenues to ensure precise bookkeeping of these costs and revenues in your financial statements.
2. Include shipping charges in the product price
The implementation of this methodology may provide a valuable advantage to consumers by eradicating the element of surprise associated with supplementary shipping expenditures upon completing their purchase. Additionally, it has the potential to enhance the clarity of the pricing structure and potentially simplify the procurement process. However, it may also create the impression of escalated product prices, which has the possibility of discouraging potential patrons. It is imperative to carefully evaluate the conceivable effects on revenue generation and customer satisfaction before deciding to incorporate shipping charges into the product’s cost.
Why should you offer Free Shipping?
- Increased Sales : Offering free shipping can be a powerful incentive for customers to make a purchase, as it removes the added cost of shipping from their final purchase price. This can lead to an increase in sales, particularly for businesses that sell products that are not easily found in brick-and-mortar stores.
- Improved Customer Satisfaction : Customers appreciate free shipping as it saves them money and makes their shopping experience more convenient. This can lead to increased customer satisfaction and loyalty, which can result in repeat business and positive word-of-mouth recommendations.
- Enhanced Brand Awareness & Loyalty : Offering free shipping can also be a way to differentiate your business from competitors and increase brand awareness. Free shipping increases customer loyalty while also improving brand loyalty. Customers become loyal to your brand and return to your store on a regular basis, avoiding competitors who charge high shipping costs.
- competitive advantage over competitors : No business is exempt to competition. Whether you’re a large or small company, you’re competing for customer attention and money with other brands in your industry. To gain a larger market share, provide your target audience with something that other businesses do not or are hesitant to provide. One example is free shipping. Businesses are hesitant to offer free shipping to their customers because they do not understand how to correctly calculate shipping costs and avoid them eating into their profits. Also, other businesses in your niche may already provide free shipping.
- Reduces Cart Abandonment : The most common reason for shopping cart abandonment is high shipping costs. It also makes sense. When customers look for a product, they do not consider the shipping cost. When the price on the payment page is significantly higher than what they saw on the product page or expected, they reluctantly abandon their cart. Consider how happy a customer would be if the product price remained constant throughout.
Conclusion
Countless buyers expect free delivery, and it would be fantastic if you could provide it. You are not required to begin with an unconditional free shipping model, which requires you to sell every item with a free shipping tag. Begin with the conditional free shipping model with Vispan Solutions to encourage customers to take advantage of your shipping offer.