Making free shipping ‘free’ for merchants as well
Customers are cost-conscious and always looking for a deal. Many retailers are tossing around the idea of free shipping, which is one way they can eliminate a very real obstacle that discourages many people from making online purchases. From the customer standpoint, there are few things more frustrating than finding a website that offers the item they need within their budget, only to discover shipping tacks on an additional $10.
Unfortunately, free shipping for customers is not so free for retailers. If merchants want to offer this perk, they need to eat the cost of free shipping at some point. Fortunately, there are numerous ways they can go about this process, which may enable more sellers to offer their customers free shipping.
Before merchants start looking at ways to reduce the material costs of free shipping, however, they first need to deduce whether they are going to benefit from providing such a service. Just because some of the most prolific retailers in the space offer free shipping, that does not mean that all merchants should do the same. For some types of purchases, shipping fees are all but expected – for example, retailers selling exercise equipment and weights. For other retailers, shoppers may just not care – if someone is buying expensive jewelry or clothing online, a $5 shipping fee may not be much of an issue. As the saying goes, “if it is not broken, do not fix it.” Retailers should look to address problem points, and if shipping costs are of little to no concerns, then sellers could spend their time addressing other pressing matters.
However, if offering free shipping is something a retailer wants to do, here are a few options that could help it make the option more affordable:
1. Be selective
As Practical Ecommerce suggest, retailers do not need to offer free shipping on every order. Even the most popular merchants place free shipping behind thresholds that customers must reach to unlock the perk. For instance, a person may have to spend at least $25 before he or she qualifies for free shipping.
Retailers could also opt to only offer free shipping on select items. These could be popular goods that may entice people to make more purchases, small goods that do not cost much to ship anyway or products in specific categories. At the end of the day, retailers do not need to offer free shipping unconditionally to every customer. In fact, few merchants actually do that. In this sense, it is critical that retailers pick and choose their free shipping “battles” wisely.
2. Choose the appropriate fulfillment options
Retailers that have limited fulfillment options are asking to pay an arm and a leg when it comes to shipping orders to customers. If they only have a few regional distribution centers from which they fulfill orders, they are bound to encounter some costly troubles.
The more options retailers have for fulfillment, the better able they will be to choose the low-cost alternative. For example, what if they could use ship-from-store functions to deliver items for half the price? This makes eating the cost of free shipping more palatable in the long haul.
3. Make the right carrier selection
Fedex, UPS, the United States Postal Service and more – they all may be delivery service providers, but they do not all provide the same rates and offerings. It is quite possible that retailers could be getting charged more for the same service another carrier offers for less. Perhaps one carrier offers services the merchant does not need, or they simply do not cover specific areas as well. The size, weight, origin and destination of an order can all meaningful impact how much it costs to ship.
Most carriers are willing to work with retailers to tailor their offerings and services to find a meeting point between the carriers’ and merchants’ needs. However, if merchants are looking to switch to free shipping, now is as good a time as any to explore all the options. Choosing the right carrier can make free shipping a lot more affordable.
4. Improving efficiency
Everything retailers do is interconnected in one way or another. If retailers want to offset costs from offering free shipping, that does mean they need to find more efficient methods to manage orders. They could make other operational improvements to tasks such as order management and pass the savings down to customers.
While free shipping is not a must, it is highly appealing to many customers. Retailers looking to make a splash among customers this year should explore avenues to offer lower shipping rates.