Offering customers free shipping charges can enhance conversion rate of your e commerce solutions. However, you need to make sure that the free shipping offer does not interfere with profit rates of your online store.
Hema Gupta
If you own an e-commerce site, offering customers free shipping can be a good way to enhance its conversion rate. Implementing this technique, however, is slightly tricky. This is because while offering free shipping is a powerful strategy, if applied incorrectly, it may have a negative impact on your profit. This means that you can offer free shipping to the customers, without allowing it to affect your profit rate.
It is true that fulfilling these two goals simultaneously is difficult. This article explains how you can overcome the difficulty.
Offer Free Shipping Membership For A Monthly/Yearly Fee
Allowing customers to enjoy free shipping benefits, in exchange for a monthly or yearly fee is an effective strategy. Recently, a famous online store enhanced its conversion rate by creating a paid membership program and delivering selected items for free for two days.
The promise that customers would receive items at zero shipping costs motivated many to opt for the program and purchase greater number of items. The fact that it was a limited period offer put greater pressure on consumers to buy more products.
Offer Something Unique and Include Shopping Costs in Its Price
If you specialize in offering exclusive products, you can include the shipping cost within the product price. One of the advantages of selling exclusive items is that consumers are unable to compare costs of similar products. If you include the shipping charges within the price and advertise the free shipping offer, it would definitely enhance your conversion rate.
Decide a Minimum Order Level for Enjoying Free Shipping
Some online retailers extend the free shipping offer to customers who order for items worth at least $25 or $50. This strategy encourages consumers to place order for more products, because they are aware of the fact that ordering certain number of items will allow them to enjoy zero shipping costs.
Of course, depending on the average order size and targeted profit rates of a company, the minimum order level should vary. Let us assume that average price of products available at your site is $30. If you want to acquire at least 15% profit, you need to set the minimum order level at $45. Such a strategy will encourage your customers to buy more products to enjoy the free shipping benefits.
Provide Customers with Free Shipping Benefits for Selected Items
Another good strategy is to extend the free shipping offer to selected and high-profit products. This will allow you to enhance conversion rate of your online store, while making customers happy at the same time. It will also help you to acquire good profit rates.
Announce Discounted Shipping Rates
If you cannot provide your consumers with free shipping, you can consider offering discounted rates. Avoid offering high discounts because it can affect your profit rates negatively. The general rule is to offer 10% or lower discount on shipping charges.
Free shipping can enhance profit rate of your online store overnight. However, you need to handle it carefully, so that your profit rate is not affected.
Hema Gupta
About the Guest Author:
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Hema Gupta is a web developer and technical author and is associated with quality web programming which is one of the leading website development company in India . She has authored quality content for various websites, ranging from sites that supply web development, web design, e-commerce solutions and customized web development.
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