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Should I offer “Free Shipping” to the buyers on my webstore?

The buying behavior of online buyers is discrete, complex and fickle. Though in general, the online model in India is based on discounts – we cannot surely tell which website among the two will be preferred by the buyer if both the sites are offering almost the same price & service. However, the latest trends in online buying can be studied and surveys can be referred to reach to a point where approximation can be made about what works for converting a visitor to an actual buyer.

One such parameter is Free Shipping. Many of our customers ask “Will my sell increase if I offer Free Shipping?”. My answer is “Yes, if you can afford to”. In delivery based B2C ecommerce, which targets to retail customers, seller offering Free Shipping has certainly edge over his competitor not offering free shipping. However, three parameters – product cost, product weight and margins play an important role in deciding whether to offer Free Shipping. Costly but lighter products are good to be shipped free, provided the margins are fair. Low margin products with low price tag – whether or not they are lighter do not permit the merchant to offer free shipping. A basic thumb rule is – offer free shipping if your margins are wider enough to accommodate the offset of free shipping.

But what if you cannot afford Free Shipping, but your competitor offers it. Well, in that case, compare your net offer price with your competitors net offer price. If yours is cheaper, you have scope to increase it a bit so that cost you incur in free shipping can be taken care of by the new price. Challenge is to stay competitive even at new offer price which will be obviously higher than your previous price.

Another workaround is to have a capping on cart amount for free shipping. For example, “Free shipping for all orders above $100”. This works well in our experience. It not only makes buyer feel he is getting (conditional) free shipping, it also increases your average cart size.

Not only on shipping, we can help online retailers in solving any kind of practical issues, problems they may face while running the business. Reach us by email info@LetsWebify.com

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