OuterBox’s eCommerce Blog
Free Shipping on eCommerce Websites and Conversion Rate Improvement
We all love free shipping. We all know we’re more likely to buy if we get free shipping. Yet, when most of us start an eCommerce website we don’t want to offer free shipping. Let’s face it, we’re cheap. We don’t want to give something away for free!
These days competition online, especially in the new era of services such as Amazon Prime, offering free shipping on most items is almost mandatory. Research shows that 93% of online shoppers say free shipping would encourage them to buy. Two out of the three shoppers said they would buy more online if they knew they could return items with free shipping (credit Econsultancy.com). Of course, if order to offer these services free, you’ll need to set your pricing and business model appropriately.
Let me give an example of success: A client of ours sold a product for $200. This was a unique product and was their brand. There were some sizes and color options, but on average it was around $200. Sales were around $400,000 the first year. Shipping on their product was around $50 a pop. People hated paying $50 and we saw a lot of people leaving their checkout process when choosing shipping. So what did we suggest? Offer free shipping and make the base price around $250. Their sales were in the million the year after. The illusion of free shipping! This is a great option and works well for many clients. Remember, the higher your product price the more perceived value there is. No one sees value is paying for shipping, but they do when paying for a product.
Offering free shipping is also a way to up-sell and cross sell other products. On many website you must spend $100, or another amount, before free shipping kicks in. How many times have you ordered one more book to get free shipping? I know research shows it happens all the time. The more you’re shipping to one address the less your shipping charges will be in relation to your profit on what you’re selling, so it makes financial sense, too. Look at your business, your numbers and see what free shipping is best for you. It will make a difference in your bottom line. Consider your eCommerce features and be sure your eCommerce website solution offers what you need to make it happen.
Raise that conversion rate!
