Why Free Shipping can be a viable option and why not? Let’s dive deep and see how things stand.
When to Offer Free Shipping
When you can actually afford it
First of all, you will have to calculate if you can afford it. Some suppliers like AliExpress offer you to search by wether they often free shipping or not. Be wary of the standard shipping fee which takes forever to reach the customer which is bad customer service!
If international shipping is not sustainable best drop the product and find something else. Often times, you will have to promote what you are selling and given the amount of money you spent on advertising it might become impossible to profit from a single product if it’s shipping is too expensive. Cheap items with more expensive shipping cost than the cost of the items itself is a no go.
Sometimes if your supplier is offering ePacket shipping you can take advantage of that and offer free shipping to your customers as well. For many products, ePacket shipping costs are very low which will allow you to offer free shipping plus it would be immoral to want shipping fees from a customer while you are not paying them yourself, although that is a way to increase your profits as well. Just remember that ePackets are free only for some countries.
There is strong competition
Sometimes, you would have very strong competition and if they are already offering free shipping it would be really unwise of you not to. And if they don’t, well this is one way you can have the upper hand.
Research has been done to point out that the majority of customers first research a product before they make a purchase and they because a few different stores before making a decision. So ensure you are aware of what your competition is doing and how to beat that.
To increase the amount of orders
To have a higher average order amount(AOA) it is a good idea to either offer free shipping or send a bonus item as a gift when a customer buys a certain product from you.
Try to think about what pricing is the customer looking for and make them feel like they are making a fair purchase. The higher purchase numbers you have, your reputation as a seller will improve (If you are doing things right of course.) Therefore, do your best and see how it goes. In eBay, having a positive reputation and a high number of sales will secure you high profits.
When not to do it
- When you want to increase the average order value (AOV)
- When you have low margins
- When you use it for marketing campaigns
Now, if you want to have high margins from a product you should not offer free shipping as then that would not really benefit your goal. And another thing to keep in mind is that if you are using free shipping as a promotional campaign you will not be able to use it again if you offer free shipping through the whole year.
Other important things.
- Location of customers
- Long-term marketing strategies
Keep in mind that offering free shipping in countries in the USA is much easier than in other places. Research shows that people are preferring to buy an item with free shipping rather than a small discount and that free shipping really increases the number of orders. (In some cases up to 90%) So, it is up to you whether to use it or not.
If your margins aren’t high enough, it is not wise to sell a product for pennies. Have a fair price sometimes but also make sure you are investing your time wisely.
Also, think about the way you are promoting your products. If you are running ads on Facebook, for example, think about the key factors about your adds and their longevity. Will you promote “Free shipping for this weekend only” or do something else? It’s up to you.