Shipping is a huge deal when you sell online. Let’s start with a few statistics:
- 22 percent of online shopping cart abandonments are because of unexpected costs at checkout.
- 47 percent of online buyers in 2018 said free shipping was the deciding factor when choosing who to buy from online.
- 55 percent of people who shop online say that free shipping is the most important checkout option.
- 85 percent of consumers rate free shipping as the No.1 purchase incentive.
Your small business is competing with giants like Amazon Prime and other large-scale marketplaces that often offer free shipping, especially on bigger orders. For your online store to stand on its own, you’ll need to be as competitive with these larger marketplaces, and price point on your products might not be the best battleground for your small business.
So where can you compete? Repeat shoppers are the lifeblood of small businesses, and shipping can be one of the most important tools in your utility belt.
With these points in mind, let’s talk about free (and reduced) shipping as a tool for growing your base of repeat business.
So, Why the Focus on Shipping?
In general, consumers expect online shopping to be cheaper than shopping in a physical location. After all, the reasoning goes, online stores don’t incur many of the costs of brick and mortar businesses.
Shipping is the key cost difference between digital and physical selling, particularly if customers are only purchasing one item. Shipping is the majority of the “convenience cost” that shoppers pay for not needing to go to a physical location.
For most shoppers, free shipping has a high perceived value from the very beginning. Offering free shipping on every product can become expensive quickly, though, so for many small businesses the best approach is to use free shipping as an incentive and/or reward.
Using Free (and Discounted) Shipping
By cutting back on the initial cost of shopping online, you can incentivize your customers to buy more products. Start by setting the threshold for free shipping slightly above the average cost of your items. For example, if you run a store from your blog and sell most of your products for about $15 a piece, free shipping could start on purchases of $20 and up. The trick here is convincing customers to add just a little more to their cart than they had initially planned. Consider advertising lower cost items alongside your main offerings as quick, easy ways to hit the free shipping threshold.
Alternately, you can incentivize sales of specific merchandise by offering free shipping on select items. This is a great way to clear out specific inventory. You can also focus on specific items in your inventory that you think are likely to increase your sales when bundled with other items. Let’s say you sell refurbished electronics. Customers that buy a laptop from you will also need carrying cases, USB drives, and other small purchases linked to their main item.
Free and discounted shipping is also a vital tool for rewarding customers for making purchases, which is important since repeat business accounts for 40 percent of sales online. Alongside free (or discounted) shipping on products for returning customers, consider building a rewards program.
But, Won’t Satisfied Customers be Coming Back Regardless?
In theory, yes; but you can make it easy for them.
When you include a coupon in the first email you send to a customer after they make a purchase, you’re instantly providing value in your communications. Remember: email marketing consistently converts at a higher rate than any other channel. This initial communication should be crafted to build a longer-term engagement with your brand.
Once a customer buys from you, you have a lot more power to incentivize certain behaviors. For example, consider offering free shipping on their next order if they sign up for your newsletter or share your products on social media. There are a ton of different ways to promote your products with user generated content, and free or reduced shipping is a vital tool in your repertoire.
Basically, clever use of free and discounted shipping can orient your repeat business towards the needs and goals of your specific business. When you do more than satisfy—you surprise, you amaze—your customers are more likely to return, and more likely to recommend your store to someone else.
Again, the competition is stiff online. Don’t leave return business up to chance. Help your customers choose you again and again.
Selz is the e-commerce platform for growing businesses. Selling physical products, digital products, and services. Create beautiful online stores, sell from existing websites and sell through social media.
About the Author
Bryce Patterson is a writer and content marketer at Selz. He gives e-commerce business and non-profits a more human, relatable voice. He has written a novel, worked on a comic book, and played in a handful of bands. Bryce lives in Colorado.