Everywhere you look, you can find instances of businesses offering free shipping. As a business yourself, you’re probably wondering how to offer free shipping to your customers and if it is even possible without losing a pile of money trying to make it happen.
While free shipping shouldn’t be offered on every and anything, there are a few instances where you can provide that value for consumers without breaking your own bank. Here are 6 ways to offer free shipping to your customers while still managing to turn a profit for your business.
One of the most critical components in offering free shipping is ensuring you work with a fulfillment partner that can meet your needs. Contact our team to find out how our fulfillment and distribution services can fit your order fulfillment objectives.
By far, this way is the toughest method of free shipping to offer since it is more dependent on what items you’re selling and if making free shipping available can be absorbed by your operations.
There are ways to do this, however. Namely, if you sell a limited amount of items with high enough profit margins to absorb the cost of free shipping. It can be used to boost sales for online shoppers and you shouldn’t be losing money on shipping fees.
Few companies can offer complimentary shipping for this reason. A good example is zappos.com, which sells shoes. Zappos is well-known for its free shipping on all of its footwear, which makes sense when it’s known that shoes can be highly profitable goods for the seller.
Staying with the shoe example, Nike is similar to Zappos in its free shipping on all nike.com orders but has the additional caveat of requiring you to sign up for a free membership (which will be discussed later). Nike asks for basic personal information for its free shipping and a generous return policy, but it is an exchange of sorts since the company can learn about your purchasing habits and also directly market to you via email, the website or the smartphone app.
This is a popular way to give your customers added value while also limiting the amount of shipments you’ll have to make for small items that can be included with more valuable merchandise.
Here’s an example: a commemorative pin might be for sale on your website for $8 but it would cost you $2 for total shipping costs for that very small item. But if the customer ordered several pins, or even just a number of dissimilar items that could be put into the same package, it might cost you the same or marginally more to now ship $35 worth of items in one go.
In order to get the free shipping, the consumer might be incentivized to meet the minimum order threshold by purchasing additional goods which theoretically means more profits coming in. Because you don’t need to charge for multiple packages shipped from the same order, or your profit margin is large enough, you can offer your customers free shipping. Therefore, it should help mitigate any losses for your enterprise.
One thing you want to really consider is setting a realistic minimum order that does two things: limits your cost of shipping and is also a sweet spot for enticing a customer to consider the free shipping on orders as a true value proposition. Looking at the average value of the orders you fill should give you a great sense of where that line is. For instance, if you have very few orders of $50 or more, there’s little to no benefit to making $50 your order minimum for free shipping.
This is a good way to incentivize customers to purchase particular goods, either because you have a surplus and want to move these items or because you see an opportunity to still reach your financial goals while being able to extend a value to your customers. This is known as items that qualify for free shipping.
Using an example from the previous section, let’s look at that same $8 pin. Maybe it only costs you $2 to buy it and an additional $2 to ship it. Even at a total cost of $4 per pin to you, there is still an opportunity to make a $4 profit off the sale of each one. To really get the inventory clearing out, you can include free shipping. When you take the “certain items” approach to free shipping, it should only be with items that can absorb the added cost to you.
Also like Amazon, if you’re a Prime member, you are entitled to free shipping on many (but not all) items on the website. Free shipping through a paid membership is a marketing ploy to build loyalty to your business since members have bought a subscription to get access to the savings that they assume will come with it. The membership also can include additional perks such as items that can only be purchased through a specific retailer hosting the membership program.
You can also offer a free membership, which has its own sets of benefits for both the customer and business. Often, it can be perks that are of little to no cost to your operations. This can include giving members early access to products, discount codes on items you wanted to clear out anyhow, allowing a more generous return policy and — of course — complimentary shipping. These benefits can make customers feel like MVPs and could also go a long way toward getting them to spend their hard-earned dollars with you.
This is good for busy times like the holiday season leading up to Christmas or even if you want to give your business a periodic pick-me-up. From a business perspective, this can be a good idea if you want to drum up some sales or create a thought in a buyer’s mind that they have to act now and not put off the purchase.
This kind of free shipping can also help you test out how well offering this perk can work for your sales and your customers. This type of free shipping can work without painting your business into a corner if it turns out that it doesn’t pan out.
This one may not be as relevant to an online-only business but one way free shipping is offered by some sellers is by shipping directly to a strategic location that is convenient for both the buyer and seller. An example of this is when Walmart allows for shipping to be free as long as you pick up the purchased goods from one of its physical locations.
The location is not a distribution center itself but kind of acts like that in terms of its role in shipment to the end customer. This would also be more if you were affiliated with a retailer that allowed this to occur.
You might think to yourself that adding a partner into the equation could decrease your profits. However, employing the services of a third-party logistics (3PL) company can unlock several benefits that can free your business up to more easily offer free shipping.
A well-rounded 3PL has many warehouses and fulfillment centers located across the country, which means you would have access to strategic places to ship your products more cheaply. As an example, if you only had your one warehouse space in Baltimore, Maryland, but had to constantly ship items to America’s west coast. This could become seriously expensive, meaning you’ll have to eat the added shipping costs or pass the cost onto your customers.
But if you use a 3PL, you can have your items drop shipped to them at multiple locations or a single location much closer to where your primary business takes place. By shortening the distance and the amount of different locations, this should keep money in your business’s coffers. Also, if the distance between shipping is shorter, it stands to reason you’d be able to offer faster shipping as well.
Also, a 3PL deals in such volume with order fulfillment that it will very likely have secured a deeper discount on shipping costs than your business would be able to on its own. When you add it all up, it can be a very fruitful decision to partner up with a 3PL.
Once you’ve figured out how to offer free shipping to your customers, let R+L Global Logistics help your ecommerce business reach the next level with our unique blend of assets and skills. We can provide the resources to allow you to ship faster and more cheaper than you could otherwise.
R+L Global Logistics can not only store your items in our various warehouses until you’re ready for us to ship them in bulk to retailers, but we can also expertly carry out all fulfillment and distribution services on your behalf so that you can focus more on running a successful business.
We also offer the following:
R+L Global Logistics is ready to help you lower your price on shipping products so you can extend true value to your customers. Our professional team can manage your whole supply chain.
So when you’re ready to offer free shipping to your customers, give R+L Global Logistics a call at 866-989-3082 for a free quote and to discuss all of our services.