How to Make Free Shipping Profitable

How to Make Free Shipping Profitable

August 2, 2016 Admin 2Comment

If you’re marketing your website well and even building a good network, but is still unable to make good amount of profit and are unable to meet the business goals then you need to do put in some more business strategy to get your business to the track. Why not try one of the surefire marketing tactics for online selling i.e., offering free shipping. Offering free shipping can eventually help you improve your conversion rate and cash inflow.

On average 70% of abandoned carts are due to delivery with cost being the leading factor. Offering free delivery eliminates these abandoned carts and increasing conversions while lowering customer acquisition costs. So in this blog article, we’ve put together some key tips to profitably offer free shipping and, therefore, boost your sales.

Here are some Pros and Cons of offering free shipping:

Pros      

  • Accrue order value more than a 15%.
  • Elevate the conversion rate.
  • The growth of customer retention.
  • Develop marketing edge over competitors.

      Cons

  • Reduction of operating margin.
  • Difficult to exchange free shipping once accomplished.

Follow these 4 steps to make your free shipping profitable!

Set a Minimum order value

Simply offer free shipping to orders over a certain amount. This will encourage your customers to not only spend more over the threshold but also allows you to pay transport cost and make some profit. You should aim to have a threshold where you’ll be making enough profit to exceed the delivery cost on most orders.

Set Restrictions

Make your free shipping offer more profitable by offering free shipping to the customers on products where you are quite aware of shipping cost is low. And don’t forget to observe the improvement later on which you’ll get by offering free shipping on your selected products.

Cost shipping into product price

The most obvious way to make your free shipping profitable is to raise your product price and offer free shipping for your product and eventually increase your product marketing and margins.

Examine the Prices Increases

The last step that you need to do is to increase all your product prices to repay for the loss while earning on free shipping and see how your product compares and making the growth.

Hence, if used correctly, free shipping can prove out to be a great marketing and conversion tool. Remember to display your offer prominently across your site to encourage shoppers to buy from you.

 

 

 

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