The Reality Behind "Free Shipping" For Your Business and Your Customers
by Marco Raye
March 12, 2019
For most online shoppers, "free shipping" is a siren's song luring them towards completing a purchase. One reality in 2019 for eCommerce businesses is that few offers are as enticing to consumers on the cusp of buying a full shopping cart. But how free is free shipping, and how does it affect your business and your customers? This article delves deeper into the reality of free shipping as a marketing tool, what it means for your bottom line, and how you can convert its promotional potential to increase sales with EasyPost's tech-forward rating API.
Is Free Shipping Really Free?
Contrary to its name, "free shipping" is not free. For online stores to offer this tactic, products must be marked up to cover shipping costs. By now you may be asking, "Then why do online stores frequently dangle this offer in front of customers?" Primarily because they're aware that shoppers prefer to avoid shipping costs entirely. Instead of forcing shoppers to consider shipping costs in addition to the price of a product, stores "bake" this cost into the total price to create an alluring offer.
Benefits of Free Shipping for eCommerce Businesses
- Create an image of "Choice:" Online shopping provides a comfortable alternative to many inconveniences associated with traditional in-store shopping. Hiding shipping costs in the total cost of a product creates a fascinating illusion to shoppers that they're gaining more for less. Think about your personal shopping habits. Including "free" anything usually overvalues a product or opportunity in a buyer's eyes, but it's all a fantasy. In reality, this practice allows many businesses to avoid taking a hit on shipping costs while leaving customers feeling delighted about claiming a "deal." This method is often shown by either increasing the cost per item or including a minimum-order requirement.
- Boost Average Order Value & Increases Revenue: 93% of online buyers are encouraged to buy more products if free shipping options are available (Invesp). As stated before, many online businesses experience increased average revenue per user by qualifying customers for free shipping who meet minimum-order requirements. This type of offer reduces the frustrating instances of shopping cart abandonment, which directly increases the number of completed sales. Ultimately it should come as no surprise that shoppers often repeat buy a service or product when it includes a "free" benefit.
- Improve Customer Loyalty: Did you know that 9 out of 10 consumers say free shipping is the top incentive to shop online more? Furthermore, orders with free shipping average around 30% higher in value (Invesp). To better demonstrate this concept, think of Amazon Prime. This giant in eCommerce fulfillment is a shining example of an online store leveraging this link to drive loyalty to their brand by way of new and returning customers. In exchange for customers opting to become a Prime member, or repeat customer, Amazon removes the immediate concern of tacking on an "extra fee" for something like shipping for as long as they remain a loyal Prime member.
How Does EasyPost Save You Money In The "Free Shipping" Movement?
Many online businesses understand free shipping as one of the top customer-centric benefits but struggle with shipping rates standing in the way of them reaping many of the valuable perks mentioned above. With EasyPost, the secret to considering free shipping for your business is simple and easy to use. Through our rating API technology, we optimize your shipping process by providing cost-effective carrier rates to hit the level of shipping service that keeps your customers coming back for more.
- Rating API That Lowers Shipping Costs: EasyPost enables your business to select specific shipping costs across 100+ carriers with your preferred business logic. Rating a variety of carriers based on their shipping costs contains two standout benefits. The first is that this system allows your business to consider offering "free shipping," which we've established is benefit-rich for online companies. The second is that it also enables your business to ship deliveries at the perfect level of service for both your business and your customers. Distinguish your brand in a competitive market and turn one-time buyers into repeat customers with offers too good to turn down.
EasyPost: Your Complete Shipping and Logistics Solution
EasyPost's Rating API enables your business to select the optimal price point for your business. Doing so places one of the most robust online selling strategies in the palm of your hand at a price that lets everyone win. If customers know they can buy the same product from your online store at a lower price, plus receive free shipping, you effectively leave them no choice but to complete their purchase.
"Free shipping" isn't free, but that shouldn't discourage you from exploring alternate avenues to offering this revenue generation tool to your audience. If you have any questions related to EasyPost's Rating API or how we can help your eCommerce fulfillment operation reduce its shipping costs through our suite of shipping and logistics solutions, please contact our team today.