Pros & Cons of offering free shipping

“Free Shipping” is what today’s customer would expect over a 10% discount coupon code or gift vouchers. Online shoppers are more likely to respond to free shipping as it makes online transaction more comparable than any other neighborhood store. Whatever maybe the reason, it is proven that consumer’s shopping behavior changes when free shipping is offered.

Offering free shipping will no doubt increase conversion rates for your store, but the truth of the matter is someone has to pay for the shipping. Either you as a retailer are eating the cost or you include that in your product price and your customers are paying a higher price. But, in most of the cases it’s a mixture of both.

You may be struggling with this concept and are uncertain whether to infuse free shipping into your web site marketing plan or not. To determine the right path for your ecommerce business, here is a closer look at the pros and cons of free shipping.

Pros of free shipping

–  This will allow you to stand out from the crowd, allowing you to build extra visibility making a huge disparity between you and your competitors.

– Displaying the total price (with no hidden-charges), you automatically encourage the customers to pay upfront by picking the free-shipping method.

– One of the many reasons why shoppers abandon their cart, is because they are told about the shipping fee after adding the product to the cart. This will increase the total product price and your customers will get annoyed, who in turn may never shop from your site. However, offering free shipping, your customers will never face such scenario resulting to less shopping cart abandoned rates.

–  When you offer free shipping, you’ll obviously want to advertise it to your customers. And, advertising about your free shipping offer will automatically divert more traffic to your ecommerce store.

– Offering this service, you’ll keep your customers happy who will always visit your store for making a purchase. And, your happy customers can help you build referrals through word of mouth and spread your goodness in social networking sites.

– This can be a boon during slow seasons. When your ecommerce store does not generate much conversions, you can target your old customers with free shipping incentives. By doing this you can increase sales for your business.

Cons of free shipping

– You are forced to increase the product price to cover the shipping charge. However, high product price can affect customer’s purchase decisions.

– Someone has to pay the charges, and mostly it is an added expense to retailers. As a retailer you might need to sacrifice other services. (e.g. customers service)

– If you are aware about your customer’s shopping behavior, similarly, some of your customers know that the shipping charges has been added to the product price. Hence, not all your customers will consider it to be a savings.

– When you plan to offer free shipping, it increases your back end maintenance costs. You’ll have to ensure that your system starts and stops free shipping promotions accurately. If not, it will directly hit the bottom line of your business.

– If you don’t make your free shipping promotional service visible to your customers, (especially your loyal ones) and later they realize that they have missed the free shipping window may not feel good about it. You’ll immediately see a vast change in their shopping behavior i.e. they may either never visit your site again or may shop very less from your site.

– The worst drawback is, this will make your customers used to shopping from your site only when you offer free shipping promotions, or else they won’t.

The bottom line

Shipping products to your customers is expensive and somebody has to pay for it. However, infusing a shipping management software and with the help of it’s shipping calculator if costs can be managed, I’m sure you’ll see free shipping as an opportunity to build traffic and repeat business.