Will Free Shipping Work for Your Online Business? Here’s How to Tell

This article is part of an on-going series of blog posts under the Guide to Providing Excellent Customer Experience to E-commerce Customers, to help you with your business, brought to you by My Business Venture.

My Business Venture Complaints Guide Talks Free Shipping Feasibility

 

Free shipping has become the norm for online businesses these days. If you don’t offer it, you better be sure your products aren’t offered anywhere else with free shipping, because if they are, you risk losing your customers and getting swallowed by the competition whole. On the other hand, offering free shipping can bring in more customers, true, but it can also decimate your profit margins if you don’t manage it effectively.

When it comes to free shipping, a one-size-fits-all approach simply doesn’t exist. What works for one seller may not work for another. In some cases, it may even be completely unreasonable. My Business Venture (MBV) discusses a few key points that you should know if you are considering free shipping for your online business.

How to tell if offering free shipping works for you

There are three crucial areas that you need to look at before you make the free shipping plunge. First, you need to know your shipping costs. Shippers often charge by weight and category, so you must identify if your product will be expensive to ship. You must then decide if you can absorb the shipping cost to the retail price or not. Remember that you can—and should—negotiate for the lowest price possible with your products.

Second, you must learn how much your competitors are charging for similar products. If your competitors offer free shipping and their items are similarly priced as yours, then you may have to do the same to compete.

The free shipping rule of thumb

As a general rule, if your products have a high profit margin and cost little to ship, offering free shipping is practically a given. For instance, if you sell a $500 piece of jewelry that costs $5 to ship, the shipping fee is a small price to pay for the promotional benefit that free shipping can give your brand.

On the other hand, if your product costs $5, bloating the price to $10 just to accommodate the shipping fee will make your customers feel like they’re getting ripped off. Better to be upfront about the cost of shipping and skip free shipping altogether to keep prices at an honest level and avoid the bad customer experiences discussed in this My Business Venture complaints guide.

About MBV

MBV started over 23 years ago out of an apt with a $100 investment and has grown to help 1000’s realize the same dream over the last 23 years. If you think offering free shipping is feasible for your business, we can help you establish a free shipping system that works.