If you’ve been around the e-commerce landscape since its early days, you know that free shipping used to be a nice-to-have perk. Now, with rising competition, it’s almost a necessity. Customers expect it, and it often determines whether they complete a purchase or bounce to a competitor.
For newcomers to the online selling game, offering free shipping can feel daunting. It might seem like a quick way to eat into your revenue and shrink your profit margins. But here’s the good news: free shipping doesn’t have to cost you.
In this article, we’ll lay out the clever strategies that you can implement to make free shipping work for your online store and increase sales – all without losing profit.
#1. Set a Minimum Order Value for Free Shipping
One of the easiest ways to make free shipping work for both you and your customers is by setting a minimum order threshold. This means, instead of offering free shipping on every single purchase, you make it available only for orders that hit a certain amount — say, RM50 or RM100.
This isn’t just about covering shipping costs. It’s about creating a win-win situation where customers feel like they’re getting a deal, and you’re seeing a higher average order value (AOV). It’s also how you can justify the cost of free shipping for your business, all while encouraging customers to add that extra item to their cart.
Psst… if your profit margin is on the higher side, set a lower threshold so it’s easier for customers to qualify for free shipping and buy more.
#2. Offer Free Shipping on Selected Products Only
Speaking of profit margins, if you’re worried that offering free shipping across your e-commerce store might cut into your profits, consider limiting it to select products — especially those with higher margins.
By choosing items that already yield a solid profit, you can absorb the shipping costs without impacting your bottom line. This approach can also help you clear out slow-moving inventory by making it more attractive to buyers.
For instance, if you’re an online store selling home decor, you could offer free shipping on larger-ticket items like furniture or rugs, which have a higher profit margin compared to smaller items. This way, you can leverage free shipping as a targeted strategy without risking profitability.
#3. Include Shipping Costs in Your Product Prices
When it comes to the backbone of Malaysia’s economy (the SMEs), offering free shipping can feel like a financial stretch. For small businesses, a smart way to make free shipping feasible is by incorporating shipping costs directly into product prices. Sure, it may seem a bit sneaky, but hear us out!
By adding just a few extra ringgits to each item, you can cover shipping expenses without hurting your bottom line, especially if you know customers tend to buy multiple items.
Picture this: if your products are priced at around RM9 each, adding just RM1 per item isn’t gonna break anyone’s bank. Now, when shipping costs RM5 and you offer free shipping, customers buying a few items won’t mind the slight price increase.
They still feel they’re getting a deal with “free shipping,” while you’ve cleverly spread the shipping cost across their order. Problem solved!
#4. Use Free Shipping as a Limited-Time Promotion
Another way to serve up free shipping without slicing into your profit margins is by making it a limited-time deal. Free shipping doesn’t have to be a forever thing. Instead, offer it as a temporary treat during peak shopping seasons like Double-Digit Sales or Payday Sales.
The best part? You’re creating a sense of urgency and excitement that gets customers clicking “Add to Cart” faster. Pair this with a minimum order threshold to get the most bang for your buck.
If you’re worried customers might take it for granted, throw in an “extra step” by making it a free shipping voucher with a minimum purchase requirement. This not only makes it feel like a special promo but also boosts the chances of a sale.
The result? A short-term sales boost, plus all the perks of offering free shipping without it weighing down your profits long-term.
#5. Partner with a Cost-Effective Courier Service
Despite all the strategies we’ve covered, none of them will matter if you don’t have a cost-effective courier partner who’s also reliable. Why? Because implementing free shipping with high delivery costs will simply hurt your bottom line. Worse still, if your products are delivered in poor condition, you could end up with more returns than sales.
Now that you know the importance of a solid logistics partner — heard of Ninja Van? Of course, you have, we’re famous! Hehe. But jokes aside, partnering with a reliable service like Ninja Van, which offers special discount rates for frequent shippers, can make a huge difference.
Besides having a wide range of delivery options, our competitive rates help keep your shipping costs low, making free shipping much more sustainable.
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