How to Do Free Shipping Correctly

A lot of ecommerce stores offer free shipping, but that doesn’t mean they’re doing it right. These days most online shoppers have come to expect free shipping, and many will even go elsewhere if they find that a site doesn’t offer free shipping. But just because shoppers want it and your competitors are doing it, doesn’t mean you should just jump on the bandwagon. Before you decide to offer free shipping, you have to do a little planning. 
​
Like any other marketing initiative, free shipping should help you achieve your overall goals (like increasing sales volume, repeat purchases, or average order value). This means that you need to figure out why you’re planning on offering free shipping and which metrics you’ll analyze to determine if it’s helping you achieve those goals. 

Secondly, you need to know how you’ll actually structure your free shipping. What will the threshold be for receiving shipping for free? Will everyone be offered free shipping or just your most loyal customers? Will certain products be excluded? And so on. This is the most difficult and also the most important part of offering free shipping. To help you out, we’ve complied our top 5 tips for doing free shipping the right way:

​1.    Choose an Audience
Remember, you don’t have to offer free shipping to everyone! While some ecommerce stores decide to give free shipping across the board, others segment their audience and offer a shipping incentive to individual segments. The most common segments to receive free shipping are either first-time shoppers or your most loyal customers, but you can give away shipping to any individual segment of your larger audience really. 

Keep in mind that you don’t have to take an “all or nothing” approach either! You can give shipping incentives across a price gradient, which is to say that you can make some people pay full price for shipping, give some other people flat rate shipping, and comp shipping costs for others. This type of strategy works best when you coordinate it in conjunction with other things like loyalty programs or subscriptions. For instance, say you sell home air filters – you might not discount shipping costs at all for the one-time buyer but you may offer $5 flat rate shipping for people who sign up to have a filter automatically shipped to them every 6 months, and give free shipping to anyone who refers a friend.

2.    Upsell
In business you don’t want to give away anything for free, which means that if you do free shipping, it better serve a purpose! The best way to use free shipping is to offer it as an upselling incentive. This requires knowing what your average order value (AOV) and average product price are and then setting the free shipping threshold enough above it that shoppers will have to buy something else to qualify. For instance, if your AOV is $50 and your average product costs $25, you wouldn’t want to offer free shipping for orders over $40 because most people will already hit that value on their own. But you also don’t want to offer free shipping for orders over $55 because that makes it too easy for shoppers to simply choose a slightly better version of the product they were going to buy anyways or add an extra small item to their shopping cart to qualify. Instead, you want to offer free shipping on orders $75+ so that shoppers will have to buy another item altogether to get the incentive. 

3. Price it In
Shoppers hate feeling like they’ve been misled, which is why people abandon their shopping carts if they add an item to their cart and then are hit with high shipping costs! Instead of trying to draw visitors in by having the lowest product prices and then tagging on astronomical shipping costs afterwards, just build the cost of shipping into the product price and then offer free shipping. You can still have exclusions, if needed, for special shipping circumstances so that you don’t end up eating these costs. This is how online sellers can offer “free shipping” on large products like ATVs, farm equipment, flag poles, etc. It makes the shopping experience easier for consumers, which is likely to increase sales! 

4. Consider the Timeframe
Sometimes the most important thing for shoppers isn’t saving money – sometimes it’s getting what they need in time! Whether this means getting an item before Christmas, or a loved one’s birthday, or a community event, or the growing season starts – time matters a lot for some purchases. So instead of just offering free shipping and hoping that that will bring in more sales, consider offering guaranteed shipping or faster shipping to incentivize shoppers to choose your company over your competitors. One creative way to do this (that you tend to see around the holidays) is to give shoppers a free shipping upgrade. So for instance, let’s say that standard shipping on your site would cost a shopper $8.95 and 2-day rush shipping would cost $19.95 – for $8.95 a shopper can be guaranteed to have their package in 2 days instead of the 6-8 days that standard shipping would have offered. (Of course, you could also offer free rush shipping, but that can get really pricey depending on what you sell.)

5. Promote It
Don’t forget to tell people about your shipping offer! Promote your shipping incentives on social media, in your online PPC ads, through email, on your homepage, etc. Reach your audience through any means possible to give them yet another reason to choose you when they’re ready to make a purchase. 

Kate Pierce is the owner of LionShark Digital Marketing LLC, a West Michigan internet marketing company. Her areas of expertise include Paid Search, Search Engine Optimization, Business Blogging and Web Copywriting. She lives in the Grand Rapids area with her husband and son and enjoys cooking, watching sports, and spending time together as a family. Like a true digital marketing expert (i.e. geek), she loves talking about current marketing trends… so don’t say you weren’t warned!