How to Offer Free Shipping and Not Lose Money
Shipping charges can be a tricky thing to figure out when you have your own Etsy store or other type of Ecommerce store. Should you charge for shipping or offer it for free? Free shipping is always a great benefit to be able to offer your customers, but how do you do it in such a way that it doesn’t reduce your profit on the items you sell? These are all common questions that anyone who sells physical products to their customers has asked at one time or another.
Should You Offer Free Shipping?
If you’re not already offering free shipping to your customers, there are a few things you need to consider before jumping into the free shipping arena. While it sounds like a great idea from the consumer’s side, it can have negative effects on your profit margin if you’re not careful.
Over all, with the rising costs of shipping physical items, offering blanket, across the board free shipping may not be the way to go. That doesn’t mean you can’t offer it at certain times and under certain circumstances.
In many ways, offering free shipping under specific circumstances is actually better for your sales than offering it on a constant basis. Your objective is to offer your customers the best deals you can, including on shipping coats, without losing money on your items. No business wants to lose money, and in the Etsy and ecommerce store world, many people have miscalculated on shipping costs and ended up losing money on some sales. It’s easy to do, but if you follow these guidelines, the chances of that happening are drastically reduced.
Free Shipping with Minimum Purchase
This is something that MANY online stores do, some you may have even shopped at yourself. You offer free shipping above a certain dollar amount that is purchased on your site. This has a two-fold effect; it gives consumers a reason to purchase more from you, and it raises the overall dollar amount of your sale, so your profit is higher. You can set your minimum purchase to any amount you choose, but if you set it too high, customers will feel it is just a ploy to look good and not ever really follow through on.
If your store sells higher priced items, you can set the minimum amount higher than if you sell a larger amount of items under $10 for example. If you have lower priced products in your store, setting your minimum amount to spend to $40 to get free shipping is a fair amount for the consumer to shoot for. If your items have higher price tags, setting your minimum purchase amount to $100 or even $150 is not unreasonable.
(psst! In January 2016, I am going to be in your city, hosting Etsy seller meetups, talking about optimizing your shop through a framework called “The Buyer’s Journey”. It’s free and it is all about Etsy SEO! You should attend it! Click here to find out more about the free meetups and events.)
Offer “Free Shipping Events”
Another way to give your customers the benefit of free shipping without losing money is to offer free shipping events.
What this means is that you will advertise a 2 or 3 day event where all purchases are eligible for free shipping regardless of whether they have a minimum amount purchased or not.
During these free shipping events, minimum purchases will not be required. These free shipping events can bring in a real increase in sales because people want to take advantage of the free shipping benefit.
Free shipping weekends and events are very popular with consumers. It doesn’t stop them from buying from you other times throughout the year but it encourages them to buy MORE from you during the times that they can get free shipping. It’s a very common and effective method that most of the larger stores offer their customers. There’s a good reason they offer this, it works!
Making Sure You Don’t Lose Money During Free Shipping Offers
If you decide you want to offer free shipping all the time, you can ensure you won’t lose money if you figure in the cost of not only the actual shipping, but the materials to ship them as well into the price of the item. These will include boxes (unless you’re shipping priority, which then boxes are free) tape, and packing material. You don’t have to charge an exorbitant amount for your items, but when you include them in the cost of your item, you can remove the likelihood of losing any money any time you offer free shipping.
Also be sure to seek out the least expensive ways of shipping. Purchasing your postage online from USPS can save you up to 16% on your shipping costs! Those kinds of savings add up when you ship a lot of items each week.
UPS or FedEx might off bulk shipping rates if you do a high volume of shipping each week. Check around and see where you can get the lowest costs and best deals for shipping. Decide what will work best for you Etsy store or ecommerce store and try a few ideas out to see which seems to appeal to your customers the best.
• Choose whether to offer free shipping every day or only at specific times
• Try a minimum purchase required amount to receive free shipping (base this on the average cost of your items)
• Offer free shipping weekends or 2-3 days events with no minimum purchase required
• When pricing your items in your store, figure the cost of shipping and shipping materials into your price if you want to offer blanket free shipping all the time.
• Look for the lowest cost ways for you to ship such as purchasing postage from USPS online and other ideas which can save you money on shipping costs.