How Free Shipping Incentive Promotes Sales?


10 min remaining

For any transaction to succeed between buyers and sellers, shipping is a crucial stage. Have you ever thought about offering free shipping? It could help increase your store’s conversion rate. This tactic could be used to increase holiday conversion rates. It can also be completely counterproductive. This could reduce your business’ turnover and make your product more expensive. If it is successful, how do you get the customer to notice this offer? To prevent customers from missing out on this amazing opportunity, you must make it visible everywhere on your websites.

To learn more, just tune in to this article

What is free shipping?

A great tactic to persuade customers to order online is free shipping or free delivery. Your customers will love your business services if they can save a portion of their online shopping expenses.

This is a great way to make your store more attractive or more appealing than your competitors. This is another step towards optimizing your turnover and attracting customers to the store’s products/services.

It is found in the shipping process, which is the final step to helping customers buy better. It can have a significant impact on customer behavior and thought to help them buy products.

Your store can get free shipping

Realistic figures

WalkerSands Communications says it is one of the top reasons customers shop online. With 77% of online shoppers citing free shipping as their number one reason for shopping online, it is a strong incentive to make purchases.

Despite the fact that online commerce has changed dramatically, free delivery continues to be a viable method to increase revenue for virtual stores. This is according to their annual research which began in 2014 and continues until now.

Encourage your customer to be positive

First, because your customers are familiar with offline shopping. Customers can view shipping costs as an additional cost they must pay for the product. This concept causes buyers to feel annoyed and has their second thoughts when they consider buying the product from an online store.

Imagine that you are an online customer. Once you’ve added the products to your cart, the shipping cost will continue to increase as an additional cost. Do you want to purchase it immediately? You might need to reconsider and compare the costs of purchasing at a virtual or physical store. You might then think that shipping costs will make it more expensive than buying the item at a local store.

Second, customers may be more likely to shop online if they are offered free shipping. Customers feel more comfortable shopping online than they do in physical stores. Free shipping seems to be the best and most straightforward option for customers when comparing the different options available to them to purchase their products.

The third reason is the “free”, which is being overvalued by customers and makes them more likely to buy the product. It is still cheaper than other products of comparable quality. The buyers might be evaluating free too much, even though they know that it is not a free service and will have to pay for the product.

Let’s look at the Amazon case. Anna Kegler works for a Magento company and offers free shipping to Europe. Their revenue grew dramatically in many other countries than France. The “free word” makes it easy for customers to be seduced. The Amazon shipping fee for France was incorrectly reduced to 1 Franc. It was evident that even though the shipping cost had been reduced to 1 Franc, it still isn’t convincing enough to compare it to no shipping offer.

This type of service is also offered by other top brands

This is because many major online retailers have used this strategy to draw buyers. This strategy is being applied by many major companies, including Dell, Ace Hardware and JanSport, Sweetwater, and others. It is used by all the major corporations, which means that they can reap many of its benefits.

This could be used as a short-term strategy

Physical store owners are required to pay additional fees to place, furnish, decorate, and hire employees. All of these costs will be added onto the product price.

Online businesses, on the other hand, have to worry less about daily operations fees because they are managed via a virtual platform. A small warehouse is all they need, rather than a large store in a central area. The extra cost of shipping is not as high as renting a centrally located store. Customers who want to save money this holiday season will love the fact that every virtual order must be shipped with shipping.

Applying for free shipping is not easy

Your product margins are low

If you charge too much for your product, or the product’s value is too low, it can lead to bankruptcy. Free shipping can lead to your business going bankrupt. Shipping can sometimes be more costly than the product.

Low margin stores should avoid using these tactics. The customer may find the price too high due to free shipping. They will eventually stop buying your product, and the strategies will be ineffective. To make this work, stores must offer conditional shipping, or other attractive offers such as free returns, store pickup, and so forth.

Shipping costs are too high

Shipping costs that are too high can also be a problem when using this marketing tool. Shipping costs will rise from 2018 to 2019, which can have a significant impact on online sales. Customers will continue to pay an additional cost, so the seller must be prepared to offer the best pricing to their customers. The Allen Press listed figure shows the increase in shipping fees from 2018 to 2019.

  • For UPs They continue to follow the price change for:
    • Prices for UPS Air, UPS Ground and international services will rise by 4.9%
    • If the Package Level information is not given before delivery, a $2 fee will be added to your package.
    • Additional charges and services may also be added.
  • For FedEx These changes will also be made in January 2019, as follows:
    • FedEx Express freight and package will average 4.9% for the U.S., U.S. export, and U.S. import services.
    • FedEx Ground Standard and FedEx Home Delivery Standard will see an average increase of 4.9 percent
    • FedEx rates will increase by an average 5.9%

On average, shipping costs increased by 4,9%. To cover high shipping fees, stores must use strategies such as setting a threshold that encourages customers to spend more.

This practical application allows businesses to add free shipping

1# Allow for free shipping when you adjust product costs 

You can easily divide the cost to include the product price in order to ensure that your store doesn’t lose margins. This method allows you to generate margin while also creating advertising campaigns and other fees.

This will require you to calculate the average shipping cost for each product.

2# Add a threshold to your policy

You must make more money when you offer free shipping. Stores must increase the average order value to get free shipping. Many savvy-buyers will be willing to purchase more products to meet their requirements in order to receive an order free of charge. You can also be confident that your products are of high quality and reasonable in price and this will encourage buyers to buy more of your products and increase your profits.

Free shipping will be offered, but only if the order meets a certain condition. Customers must also spend a certain amount to receive free shipping. Merchants must try many different solutions to determine which one is best for their store.

If a customer purchases more than $500, they will get free shipping. Customers who purchase less than that amount will be charged a flat rate. This is a great way to increase your product’s sales.

Once you have a clear, win-win shipping policy in place, you can use some tools or customize your store to obtain these features. Shipping Rules extension allows you to set delivery fees based upon shopping cart data. The Free Shipping bar module lets you notify buyers and encourage them to buy more.

3# Reduce the shipping weight and distance

The distance you are shipping to must be restricted. Mageplaza offers Shipping Restrictions Extension that allows owners to limit shipping based on their postcode, state, or country. You might also want to try the Multiple Flat Rates shipping module, which will limit your shipping fees based on different countries.

To prevent losses, weight restrictions for free shipping should be in place. To maximize business profits, it is possible to make exceptions for high shipping costs.

It is important to determine the right pricing for each delivery condition. See 15 most common shipping rules that are used all around the world.

Mageplaza Shipping Suite for Magento 2 – All-in-one delivery solution

E-commerce has made delivery a major part, especially with the current pandemic COVID-19. The right shipping strategy can save you headaches and help your business succeed in these difficult times.

Mageplaza Shipping Suite Magento 2 can help you increase sales and customer loyalty by offering outstanding delivery policies. This pack comes with a well-written user guide and is very easy to use.

Magento 2 Shipping Suite meets all your shipping and delivery needs. You can also use synergy to optimize and manage your shipping strategy. This program is essential for store owners who want to spend less time on tedious tasks and more time providing customer service.

The 9 shipping issues that this pack addresses will help increase conversion rates and improve customer trust.

  • Eliminate customers’ hesitations about making purchase decisions
  • Don’t worry about shipping failures due to lack information
  • Visually indicate multiple delivery options
  • Limit and assign shipping methods that best suit customer and order circumstances
  • Unlimited delivery fees
  • You can easily schedule delivery times with a shipping calendar found on the checkout page.
  • To adjust shipping fees for promotional programs, use shipping rules
  • Transparency is possible by showing the shipping cost on the product page to remove any “hidden costs”
  • Sending back-in stock notifications can improve customer experience

Find out more at ->

Last words

The holiday season is the best time to offer free shipping during a highly competitive period. Your stores will be able to increase sales by encouraging purchases and increasing the average order value. It does have some limitations.

  • Add the shipping costs to your products. Avoid losses and narrow margins
  • A threshold is the best way to increase your average order value.
  • Optimize your store with the most current extension to improve control over free shipping.

Businesses with a smaller margin need to choose a strategy that is cost-effective as shipping free of charge is not possible. You can also opt for free pick-up in store, free return or BOPIS. This will provide an alternative to free shipping.

About the author

Kobe Digital is a unified team of performance marketing, design, and video production experts. Our mastery of these disciplines is what makes us effective. Our ability to integrate them seamlessly is what makes us unique.