6 Free Shipping Strategies and Their Alternatives

Free shipping.

These two words work like a magic spell. They are the #1 way to enthuse customers to buy from you.

However, offering free shipping on your online store may be quite a venture.

How can you predict whether free shipping will be profitable? How do you choose a good shipping strategy that doesn’t break the bank? Is it even a reliable idea for small businesses?

We suggest that you don’t act with a blindfold on, so we have collected some free shipping tactics for you.

Should I Offer Free Shipping?

Researchers say 46% of customers are likely to pay a bit more for their overall order if it comes with free shipping.

It might not come as a surprise, but 84% of online customers are more likely to shop with brands that offer free shipping.

87% of consumers will refer to Amazon for their gift purchases — and Amazon is one of the most famous providers of free shipping.

But you shouldn’t offer it just because your customers expect it, or because it might increase your order volume, or because you are eager to take a piece of Amazon’s and other giants’ big money.

What you really should do is make a cold-hearted calculation based on the following factors:

• Your profit margins. Remember that your margins vary per product. Don’t be too hasty to put a free shipping label on every piece in your store.
• Your products. The weight and size of a product influence the shipping cost. The heavier and larger a product is, the more restrictions you should consider for shipping.
• Your AOV. If you offer free shipping with a threshold, you’ll want to increase your AOV (average order value). Measure it and set a threshold a little above that amount.
• Your customer’s location. If you ship abroad or to faraway destinations, don’t forget to exclude them from your free shipping list or to at least set a threshold.

Don’t offer free shipping just because your customers expect it or because it might increase your order volume.

Related: How to Set Up Shipping Rates in Your Store Using Ecwid

6 Free Shipping Tactics for Your Online Store

If you have decided to offer free shipping on your website, you should know there is more than one way to do so. Here are six tactics to implement free shipping for your online store while keeping it profitable.

Free shipping on everything

Offer this if you sell small and lightweight products with a high-profit margin (for example, jewelry or portable electronics).

MAC Cosmetics can offer free shipping since their products are lightweight

Tip: If you can offer free shipping on everything, don’t stay under the radar. Mention your free shipping policy in your newsletter and on social media pages, add a bar saying “Free Shipping” on the store homepage.

A shipping threshold

Setting a threshold is a strong marketing punch to increase your AOV. This way you encourage customers to order more products: 9 out of 10 people say that having an order ship for free is the biggest incentive to add more to their cart.

Asos offers free shipping if the order is over $49.99

So setting a threshold helps to increase the average order value, but how do you calculate the minimum order amount? Let’s consider the following example.

Number of orders — 10
Average order value — $40
Profit margin — 25%
Average shipping cost per order — $10

Calculation:

Profit 10 х 40 = 400
Gross profit 400 х 25 / 100 = 100
Shipping expenses 10 х 10 = 100
Net profit 100 – 100 = 0

You will break even if you offer free shipping for a $40 order. For a net profit to be $100, gross profit should be $200. So the profit should be 200/25×100=$800, and an average order amount — 800/10=$80.

Do the same calculations for your business or try this free tool that’ll help you calculate your optimal shipping threshold.

Free shipping on a per-product basis

Apply this tactic to stimulate customers to buy certain products that you want to sell out.

• Slow-selling products. For example, sneakers in an unpopular color. It’s a great way to sell old stock.
• The most popular products with low-cost shipping.

Tip: You can also offer free shipping for certain product variations to encourage customers to buy more.

Free shipping to certain locations

If your sales go well, try this strategy to expand your customer base. Partner up with a new shipping service and offer deliveries to a new region.

If you have customers in Hawaii or in Alaska, you can restrict your shipping destinations to the U.S. continent only, just to be safe on far-away and expensive shipping.

Asos even separates United States and United States Minor Outlying Islands

Learn more: International Shipping: Picking a Provider & Shipping Around the Globe

Member program

Member programs are increasingly popular. It means you charge customers an annual fee in exchange for free shipping on some or all items.

Sam’s Club offers free shipping to program members, among other bonuses

Tip: Run a holiday contest and offer a free membership to attract more attention to the program.

Free shipping compensated by higher prices

Okay, it’s not strictly speaking free shipping. But it is still a good idea to raise your prices with a couple of dollars to compensate for your shipping costs. The game is worth the candle because a free shipping label will surely bring more traffic to your store.

Ray-Ban’s high prices make it possible to offer free overnight shipping

How to Implement Free Shipping in Your Ecwid Store

If you’ve been using Ecwid for a while, you have probably noticed the advanced shipping setting in your Control panel. You can create multiple shipping methods and specify destinations, flat rates, and delivery speed.

To add a “free shipping” option for all orders, just go to Control panel → Shipping and Pickup → Add new method. Set the flat rate to $0 and name the method “Free Shipping”. This way, your customers will see at the checkout that shipping doesn’t cost them anything.

To add a “free shipping” method for a certain product: Control Panel → Catalog → Edit Product → Tax and Shipping → Choose Free Shipping → Save.

To add a “free shipping” method for a certain region: Сontrol Panel → Shipping and Pickup → Select the “Free Shipping” method that you’ve created earlier → Edit → Specify Region → Save.

To add a “free shipping” method for order over the set sum: Control Panel → Marketing → Discount Coupons → Add New Coupon → Free Shipping → Set up limits (threshold).

To add a “free shipping” method for a group of customers (members): Control Panel → Marketing → Discount Coupons → Add New Coupon → Free Shipping. Send the coupon to members only. You can also limit the number of times they can use it.

If you want to promote free shipping on your website, use the Free Shipping Icon. This icon will be added to your product details page.

Add a free customizable promo bar to your homepage to welcome your customers with a Free Shipping offer.

Free Shipping Alternatives

When free shipping is not an option, you can try other ways to improve your customers’ attitude towards your shipping terms. Here are a couple of suggestions.

Use eco-friendly packaging

Styrofoam, which is used to keep products safe from damage and extreme temperatures, is heavily polluting the environment. Not only is it unsustainable, but its manufacturing process generates a lot of waste.

Faraday Face uses recyclable and compostable materials for packaging

If you have a mature attitude towards helping our planet, use fibrous blocking materials such as corrugated inserts instead of styrofoam. And don’t forget to tell your customers about it. Ecological problems touch many people’s hearts. Show them you care too.

Related: Everything You Need To Know About Packaging

Same-day delivery

Sometimes free shipping is not what people are looking for in the first place.

With big retailers like Amazon people are getting used to receiving orders within a short time, so it becomes more and more important to provide fast delivery.

Amazon offers same-day delivery in select areas to Prime members and to non-members at an additional cost

If you’re a local business, make same-day delivery your strong point. Feel free to charge more for the urgency, but keep an eye on your courier service.

Related: How to Get from Zero to Ship: Carriers, Rates and Strategies

Free return/exchange

92% of customers will buy again if the product return process is easy, and 79% of shoppers want free return shipping. Moreover, 67% of customers check the return page before making a purchase. As you can see from the stats, free returns are just as important as free shipping.

When customers see a free shipping label, they automatically think you offer free returns as well. But that is not necessarily the case.

If you can’t offer free shipping, free returns will comfort your customers. Learn how to make the process easier for both you and customers and how to minimize returns as well.

Free in-store pickup

Some people love in-store pickup even more than delivery at their door. Why? Because an in-store pickup service allows them to order now and come for the purchase when it’s convenient for them.

Use tools like Ecwid’s In-Store Pickup to easily show your pickup location options to customers and increase conversions on your website.

Read also: Why You Should Offer In-Store Pickup (Even If You Don’t Have A Physical Store)

Free shipping can make the shopping experience more pleasant, which in turn may increase the number of loyal customers you have. Make sure you weigh all pros and cons, and calculate a free shipping threshold properly. And if you already offer free shipping to your customers, I’d love to learn how it works for you.