How to Keep Free Shipping Affordable for Your Online Business

eCommerce is easier, faster, and better than ever. However, despite the myriad shipping choices available to the modern customer, one thing is certain: free shipping is king. 

According to a 2018 survey, 79% of shoppers indicated that free shipping would make them more likely to shop online. That’s one bandwagon you should definitely be hopping on! 

Luckily, offering free shipping is just a hop and a skip away — we’ll show you how in this article!

1. Offer Free Shipping with a Minimum Order Value

Want to offer free shipping, but don’t want to break the bank? Then this might be the option for you.

By “unlocking” free shipping with a minimum order value, you’ll ensure the best of both worlds — you won’t have to worry about negative effects on your margins, and your customers won’t have to worry about paying for shipping!

Of course, this minimum order value varies among businesses. In order to calculate it, you must first figure out how much free shipping is going to cost you. Then, calculate the average order total per transaction. Your minimum order value, or MOV, should be higher than the average total cost in order to offset shipping costs, but not prohibitively higher to the point of discouraging customers from completing their purchase. You could also compare your MOV to what your competitors have to offer as well as your own market research.

2. Offer Free Shipping to Certain Destinations

This one’s pretty straightforward. According to our handy shipping zone chart, the closer the order’s destination (relative to the warehouse it’s being shipped from), the cheaper the shipping. Therefore, it makes sense to give local buyers a little extra boost by offering free shipping. It’s also a great strategy if you want to incentivize sales in certain geographic areas. 

3. Offer Free Shipping During the Holidays

The holidays bring seasonal greetings — and seasonal sales spikes! If there’s a time to offer free shipping (especially if you’re unable to otherwise), the holidays are it. By playing your cards right, you’ll maximize your sales and keep customers satisfied. And, because your order volume will be experiencing a surge, you won’t need to worry too much about keeping track of nickels and dimes. 

4. Offer Free Shipping for First Time Buyers or Email Subscribers 

Welcome new buyers with open arms by making their first purchase just a little sweeter with a dollop of free shipping. They’ll be sure to enjoy the perk, and, if your store is in tip-top shape, come back for more once they find out how much they love your products.

Additionally, offering free shipping to email subscribers can be a powerful marketing strategy. Not only will you be incentivizing a purchase, you’ll also be expanding upon your email list, which could translate to new sales opportunities down the road!

5. Absorb the Shipping Cost into the Sticker Price of Your Products 

If free shipping is not in the cards for you (yet!), this might be a solid alternative. Like option #1, a little bit of math is required on your end to figure out what percentage of the shipping rates you could (realistically) add to the sticker price of your products.

As you can imagine, you might run into some challenges. Most notably, higher product prices might raise a few eyebrows. If your customers are accustomed to paying a certain amount for their favorite items, they probably won’t be thrilled at the thought of paying extra.

6. Work with a 3PL to Get Discounted Shipping Rates

Wanna know a secret (that’s not really a secret)? Teaming up with the big leagues will bring in the big discounts. Why? Well, because a 3PL processes such a high volume of orders per month, they are the ideal customer for shipping carriers. Being able to ship “in bulk” means that 3PLs are in better positions to negotiate their shipping rates, and, in turn, pass these savings down to you! That’s just one of the many benefits of outsourcing your fulfillment. 

Tip: If your fulfillment center has multiple warehouses, check to see if it makes sense to split your inventory. Storing your products in multiple warehouses will not only reduce shipping costs, but also increase delivery speed! Win-win.

You know what they say — when there’s a will, there’s a way. You’ve got the will to offer free shipping, and we’ve got six ways to do it! And, if that weren’t enough, we’ve also written an eBook about this very same topic. You can check it out here

And, with that, we’re signing off! If you have any questions, or if Step #6 is of particular interest, we are happy to help. Don’t be shy — shoot us a line!