Offerring Free Shipping in E-Commerce?
A lot of E-Commerce website owners blindly offer free shipping in the hopes that it will increase their sales. It usually does, but they lose more money on paying for shipping than they make on extra sales.
As with any other type of promotion in the E-Commerce industry, you should NEVER offer it to just anybody. If you offer it to everyone, free shipping, and other promotions will eat into your margins and the promotion itself will rarely make up the lost profit in additional sales. Offer free shipping on qualified orders to encourage customers to spend more or to buy your higher margin products. Alternatively you can use it as a tracking tool for your marketing efforts. Next time you’re planning on trying out a new way to advertise put this free shipping coupon in that advertisement to track the results you get from the advertisement. Here are some pros and cons of free shipping.
Pros:
- Allows you to track results from new marketing efforts that otherwise would be hard or impossible to track (e.g. offline ads like magazine, radio or TV ads that advertise your e-commerce website).
- Encourages higher spending or purchase of higher margin products if used right.
Cons:
- Eats into your margins.
