Want to create a free shipping strategy that aligns with the way you run your business? Here’s what you need to do.
As a small to mid-sized merchant, you probably have a lot of questions about how to offer free shipping effectively through your Shopify store.
From a customer’s perspective, the benefits to free shipping are very obvious – no shipping costs! But as a business owner, it may not be as clear.
Does it make sense to offer free shipping to loyal customers only? For specific products? Or for a limited time like a holiday? There’s a lot that goes into using free shipping as a marketing tool online.
So what all do you need to consider before offering free shipping in Shopify? In this blog, we’ll outline the main benefits of free shipping from a merchant point of view. Plus, discuss several ways you can use it to your competitive advantage.
Why You Should Offer Free Shipping on Shopify
Before you launch free shipping on your site, let’s take a look at four reasons why you should offer it in the first place.
It attracts customers
This is the big one! Customers love the idea of free. And they don’t like getting all the way to checkout just to find extra shipping costs. If you do offer free shipping, tout it all over your website.
It helps you stand out from competitors
If a buyer is comparison shopping, perks like free shipping will likely push them over the line to purchase from you. So again, make sure shoppers are aware of the free shipping once they land on your site.
It builds customer relationships
As limits around store capacity continue, free shipping is a great way to engage and build more long term customer relationships. Especially if you have a brick and mortar location. Offering free delivery to local customers rewards your store regulars in place of any in-store experiences you would otherwise offer them.
Learn how to set up local delivery on ShipperHQ.
It boosts average order value (AOV)
Free shipping might actually increase your profits by boosting your average order value. If you require a minimum purchase for orders (i.e. free shipping for orders over $75), customers just might add more to their carts overall. Which means, more money in your pocket.
4 Smart Ways to Use Free Shipping to Your Advantage
You may be reading this and think “But what about all the profit I’ll lose absorbing the cost of shipping?” It’s true that free shipping without the right strategy can eat into your bottom line. However, there are ways to use it strategically to attract more customers and make more money. Let’s take a look.
1. Limit it to Certain Locations
While the idea is to entice customers with free shipping, you don’t necessarily want all of your visitors to use this. Offering it to every single person who buys something could prove problematic down the line, logistically and financially.
If certain areas of the country, or international destinations, are just too far out for free shipping to make sense, set limitations around it. Only offer it to customers located in specific geographic locations.
For example, sending an item to Colorado is different from trying to get it to Hawaii. Sure, they’re both in the United States, but costs to ship to Hawaii are far higher. Plus, residents of Hawaii are used to paying higher shipping fees, so consumer perception won’t hurt you there.
Shipping across international borders also includes more complexity, with extra fees to worry about. So, limiting promotions to your country of origin might be best.
Free shipping can also be applied to specific shipping zones instead, or the distance a package travels from the point of origin to the destination. To determine shipping costs for zones within the U.S, learn more from these charts distributed by USPS and UPS.
2. Offer it to Select Items or Customers
You may also consider setting free shipping limitations on the items being shipped out.
Maybe you base it off the item value. Shipping something for free that only cost $10 might not be worth it. But how about a $50 item? Or consider how much the item costs you to ship.
If you sell extra large or awkwardly shaped goods, free shipping might not make sense. Often these kinds of shipments come with so many extra fees and rules, or require special delivery service, that it will cost you money no matter what.
For example, perhaps you sell home goods. Maybe free shipping only makes sense for your decor department and not your furniture section, which requires white-glove service for delivery.
In addition, it’s common to think about who you’re targeting a free shipping promotion to. New customers? Repeat buyers? Or are you trying to push products to a specific customer base?
These questions can help you figure out how to create a certain experience for a segment of your shoppers. Limiting free shipping to a customer’s first order – for instance – is a popular tactic to use and build loyalty fast. Or to commemorate a ‘milestone’ they’ve achieved such as spending over $300 from you so far.
3. Free shipping ≠ fast shipping
Just because you have free shipping, doesn’t mean a package has to also be at your customer’s doorstep in a couple days. And they aren’t necessarily going to expect it either (even though they want it).
Set your ground shipping option as the free option, as the costs are lowest to you. Then offer more expedited methods that customers have to pay for. Let them choose which they care about more, low costs or faster delivery.
In this busy day and age, many people want their online orders ASAP. Even if something like 2-day delivery costs an extra $10, maybe to them it’s worth the cost.
The key here is to show accurate delivery dates, in order to make it clear to buyers how much longer they will wait for free shipping. Also, you want to make sure your expedited options really will be delivered faster. Sometimes ground shipping to a nearby location can be just as quick.
Another tactic is to add a surcharge on top of the free shipping for faster delivery. This way, customers who want the item Next Day still get “free shipping,” but they simply pay the extra money your Shopify store would otherwise get hit with.
4. Create Holiday and Event Based Promotions
We all know people are going to be shopping around the big holidays like Christmas or Valentine’s Day. And your competitors know this too. That’s why free shipping promotions show up all over the place during these times.
The main risk here is that it might not always be the most eye catching offer, if everyone else is doing it. So consider also using free shipping for lesser known holidays, or for a special event like a customer’s birthday. You could time it to mimic any in-store promotions you’re offering too.
However, it’s not enough to just set up free shipping in the checkout. Really sell it with banners or pop ups on your homepage, or send out a marketing email to promote free shipping as frequently as you want. If free shipping is truly a limited time offer, your customers will want to take advantage (especially if you emphasize this point in your messaging).
Making promises around shipping for a holiday comes with it’s own challenges too. Your customers will want to know you can guarantee a delivery date. Otherwise, they might not come back at all. So make sure to add cut-off times early enough to deliver items on time, and not after the holiday or special event.
Free Shipping on Shopify: A Great Promo If You Can Automate It
Promos like free shipping are an amazing way to bring customers in through the virtual door, and to keep them there in uncertain times where shopping face-to-face has its limitations.
However, maintaining it could be an issue if you’re not careful.
Like every other aspect of the business world, careful consideration is the way to go. Charting a clear path can help make free shipping a revenue driver for you, not a profit eater.
That’s why we built ShipperHQ. ShipperHQ’s Shopify shipping app allows you to carefully control your free shipping offerings. From setting minimum purchase limits, to restricting out-of-the-way locations, to excluding large items, ShipperHQ is your one-stop command center for your Shopify store’s entire shipping strategy, free or otherwise.
Want to customize your free shipping strategy on Shopify? Start a 15-day free trial of ShipperHQ today.