We have witnessed the introduction of numerous strategies in eCommerce, which rewards customers with free shipping. Given key online markets like Amazon lowering charges, many web-based companies are wondering if they should do the same. However, free shipping: So, is free shipping beneficial for your eCommerce business? Well, let’s get deeper into the advantages and disadvantages to make your decision easier.
Is Free Shipping a Good Idea?
Free shipment can be a helpful marketing strategy for most firms since it tends to drive up the sales by removing obstacles to purchase and improving overall customer satisfaction and they come back for more. It can also add an advantage especially with so many retail firms making free shipping offers in the market.
However, it also has its glitches, such as affecting profit making or at least leading to the expansion of cost surfaces which are not easily manageable for even small-scale businesses. To counteract this, some businesses use free shipping but limit it to that one product and they will usually set a minimum order quantity which usually turns off some customers.
Also, there is a possibility that consumers may develop suspicion that products prices are raised with an aim of covering the free shipping cost.
Benefits of Offering Free Shipping
1. Increased Sales
Promises for free shipping should also be made since it may work wonders for online consumers. Research also reveals that customers wear a shipping fee when it is not added to the original price of the product. You will be able to increase your overall sales when you eliminate costs such as the shipping amount that is likely to lead to cart abandonment.
2. Competitive Advantage
According to businesses, a way of impressing the consumer is getting to the consumer immediately when the consumer is approached by competitors. Another advantage of free shipping is that it puts you at an advantage over your competitors who charge their clients for shipping. It is another touch point that consumers use when searching or choosing a retailer to buy their products from.
3. Higher Average Order Value
As a way of recovering their cost, most of the sellers provide free shipping services with special conditions that qualify the consumer. This leads to customers achieving a minimum order value that will enable them to qualify for free shipping hence higher order value.
4. Enhanced Customer Loyalty
A good example of an offering that can benefit customers and therefore increase purchase intentions is free home delivery. Ensuring that customers gained a positive shopping experience while not having to spend money on shipping makes them place repeat orders.
Drawbacks of Offering Free Shipping
1. Increased Costs
Being able to accommodate the shipping expense can be costly for any business, especially for those small business persons. And if not well handled it can even reduce your profit margins. Thus, you should measure the potential effect on the revenue while considering free shipping.
2. Impact on Pricing Strategy
Free shipping … may only be possible if the product prices are adjusted to offset the cost of home delivery. Still, it can drive price-sensitive consumers away and may have an effect on your standing in the market.
3. Not Always Feasible for All Products
Free shipping is not effective for every item since some goods may be large and / or require more postage. To measure the cost, one needs to determine if free shipping is possible with the entire range of products available.
Best Practices for Implementing Free Shipping
Set a Minimum Order Value
Gain better results in sales through setting other conditions, for example minimum order required for free delivery. They are used to help with delivery costs while also a popular and effective way to boost the average order value.
Consider Product Margins
Look at your product margins and see whether you can give away free shipping. In many cases, the options are to consume the shipping cost for high-margin products.
Use Free Shipping Strategically
Free shipments must be used during the launch of promotions or festive seasons to encourage buyers to order. Using free shipping in a short period of time makes customers demand the product and lead to sales.
Conclusion
Free shipping is also a very useful instrument for increasing sales and customer base but it has its price-adjustments that have to be made. When it is done right then the technique of free shipping will always aid an eCommerce business to improves its competitiveness of the business and increase its success in the long run.