The concept of "free shipping" has been a powerful incentive for online shoppers for a long time. In today's competitive e-commerce landscape, however, businesses must make sure that their free shipping policies are profitable. If a business isn't careful, it may find itself giving away products for free and still be unable to break even. Here are five tips for turning "free shipping" into a profitable option for your business:
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Choose the Right Shipping Carrier: Choosing the right shipping carrier is the most important step in making “free shipping” profitable. Selecting a shipping carrier that offers discounts, flat-rate shipping, and free shipping thresholds can help your business save money and increase profits.
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Negotiate Your Shipping Rates: Negotiating the cost of shipping with your carriers is an important way to save money and make “free shipping” profitable. Speak to your shipping carrier and negotiate better rates in order to pass on the savings to your customers.
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Automate Your Shipping Process: Automating your order fulfillment and shipping process to increase efficiency, such as using a shipping software, can reduce labor costs and help you keep shipping costs low.
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Increase Your Average Order Value: Offering free shipping can encourage customers to buy more, which can help increase your average order value and enable you to absorb the cost of shipping more easily. Consider offering discounts and promotions at different order thresholds to encourage customers to buy more.
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Pass On the Cost: Although offering completely free shipping is not always possible, you can still offer it to your customers. One option is to add a shipping fee to the final cost of the order or a flat rate for all orders. This allows you to cover the cost of the shipping while still keeping your prices low.
By following these tips, businesses can make “free shipping” profitable and increase profits while still providing customers with a great shopping experience. By looking at the costs and options available, businesses can make sure they are offering an incentive that is beneficial to both the store and their customers.