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Using Smart Shipping to Boost Your Business

Written by Jeff Allen on June 30, 2014 in How to Sell Products Online

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In the online marketplace transactions are constantly occurring, and an often overlooked aspect of business is shipping. It’s always been there. We know it’s coming. Put your item in your cart and head to checkout. It’s almost an instinctive part of ecommerce.

We’re so used to paying for shipping that we almost don’t think about it anymore. But those times we do think about it, shipping can be the most influential part of the transaction.

Something as simple as offering free shipping can affect how much people buy from you. On the other hand, have a poor return policy and you’ll likely see your customers shopping with competition.  Depending on your business model, you may have quite a bit of control on shipping and returns.  Let’s look at how you can tweak your shipping standards to help maximize your customer base and profits.

Why Free Shipping?

Depending on your business, you may feel like free shipping isn’t something you need to, or even can offer. Thanks to Amazon and other big online marketplaces, nearly 95% of customers now expect a free shipping option with their purchases, and more than 54% of abandoned shopping carts are due to shipping costs. The significance of that number is, if you don’t offer a free shipping option, many of your customers may wind up doing business with another retailer.

Avoid having this happen by utilizing the effect free shipping has on shoppers. They’ll often pay a higher price for the promise of free shipping. This is because, according to some, it makes the online experience comparable to that of their local store.  By removing the appearance of paying extra for shipping, customers will be more likely to pay extra for your product.

More Profit Through Free Shipping

shipping box full of cash

However, free shipping doesn’t just benefit the customer. You as the retailer can look forward to increased business as well. According to shippingeasy.com, 64% of online shoppers say that free shipping greatly impacts their ordering decision, and 93% of shoppers will buy more if they know the shipping costs will be covered.

Offering special shipping deals with bundled purchases will also increase your profit. These cost less to ship, and customers tend to buy more when items are offered in a bundle. Covering shipping costs will be a small price to pay compared to the return customers it creates and the increased business you are able to do with them.

Setting the Right Price

More customers making more purchases is great, but the truth remains that covering shipping costs will get pricey.  Simply eating the costs of shipping may work for big companies like Amazon, but it can be dangerous for small businesses. An easy way to lighten up your load is to apply some of the shipping costs to the price of the product.

A customer is more confident buying a product with free shipping than buying that same product at say, a $10 discount--even if the shipping only saves them $7. Be cautious about over-pricing your item, but adding some of the shipping costs into the final price is a pretty common practice among online retailers.

Another way is to offer bundle deals (like was said above), or have a certain price required for free shipping.  Once you find which method works best for your business, you'll begin to see how both you and your customer profit with free shipping. 

Returns Matter, Too

More than a third of online shoppers won't shop with their retailer again if the return process is not convenient. No business likes to get returns, but it’s going to happen. The item may get damaged in transit, you may ship a faulty product, or the customer may just be impossible to please.

Whatever the reason for the return, make it as easy as possible. Most shoppers (63%) will check your return policy before ever making a purchase. If it’s too complicated, chances are they’ll go somewhere else. Also keep in mind that your return policy has just as big an impact as your shipping rates. 67% of shoppers say that they’ll buy more if they know the return process is free. 

 Many companies don't offer free shipping and while that saves them a small amount of money, they often lose out on the continued business of those customers.

Ship Smart, Be Successful

100 percent satisfaction guaranteed

Whether you’re a veteran of online retail or selling your very first product, the shipping process can be just as important as the purchase itself. Customers have a tendency of recommending retailers based on their overall experience, and that includes shipping/returns. By making the experience as easy and cheap as possible, you’ll see an increase in both customer satisfaction and retention, which means you’ll see a profitable increase in the success of your online business.

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