Charge for Online Store Shipment: Zero Price or Lower Price

Hermes_Fang

Have you ever seen food stands in grocery stores offering free samples? You’ve probably gone there and taken a bite if you have. But have you ever thought about why we’re doing it?

Well, that’s because we, as people, gravitate towards anything free. We feel that we’re getting some value without risking any money. So then, you might be thinking, would this work with shipping too?

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How Shipping Costs Affect Purchase Behaviors

According to Baymard Institute, the biggest reason people abandon their carts is unexpected costs. But when you have free shipping, you won’t have these problems.

While the benefit of higher conversion rates sounds great, there are still some reasons why it’s better to have paid shipping but lower prices.

The biggest reason is that some businesses can not afford to offer free shipping. In 2016 alone, Amazon lost billions of dollars in shipping in the hopes of their customers adding more items to their carts. While their gamble worked, not all businesses can do that.

Additionally, free shipping can limit you to what limited-time offers you can offer. For example, you could make a better offer with paid shipping, where you offer a discount plus free shipping on all orders.

However, you can not do that when you have free shipping on all orders.

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Photo by Liza Summer

Free Shipping VS. Lower Product Cost

Now that you’ve heard arguments for both options, you might be wondering which one is better.

Unfortunately, there is no definitive answer to that! That’s because every business is different. So you’ll have to decide for yourself depending on your situation.

However, there is another way to do it. Instead of choosing one over the other, you could start offering conditional free shipping. That way, you’ll get the benefits of both methods. Here are two ways you could do that:

#1 - Free Shipping For Orders With Certain Cart Value

With this strategy, people need to pay for the shipping unless their cart value exceeds a specific dollar amount! That comes with a massive benefit; your customers will add more products to their cart to get to the needed cart value. And Shippo agrees with it!

According to their survey, 93% of shoppers will try to qualify for it, which leads to adding more items to their cart!

But when you go this route, you should pick your order value wisely. That’s because it shouldn’t be too low, where you’re going to become unprofitable. But also, the number should be accessible, so your client doesn’t need to pay hundreds of dollars just to get free shipping.

#2 - Free Shipping Available Based on Location and Products

Sometimes the previous method doesn’t work for some businesses. That could be because shipping some products might be too unprofitable. So instead of doing that, you could only give free shipping:

  • For certain products;
  • Or to specific shipping locations.

eCommerce platforms like Shopify and Shoplazza have smart shipment tools. You can easily set up what products or where you’d like to offer free shipping. It's a bit tricky to set it up on WordPress, but third-party plug-ins will always help.

However, you should make sure that you state the conditions in your product description when you do. That way, we’ll reduce the chances of our customers being surprised by the unexpected shipping costs.

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Photo by Liza Summer

Conclusion

There is no one-size-fits-all solution to this question. To solve this for your business, you should look at your situation and see if you can afford it. However, whatever you decide, it’s better to keep the shipping affordable so that you won’t lose your orders.

(Contributed by Andreas Ojala & HermesFang)

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6 years experience in digital marketing. A gracious loser, not a lousy winner.

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