Free Ship = Good Tip

It’s the wonder offer that works wonders for your sales

When I was a kid, my grandfather always used to say, “there’s no such thing as a free lunch.” He’s still right, but today the word “free” doesn’t raise as much of red flag as it did in Gramps’ day. In fact, more and more consumers are recognizing the value of free, especially when it comes to their online purchases and how they’re shipped. Because when it comes to shipping, “free” can be the key that unlocks the door between advertisers and customers.

Determining factor
According to a new study of 9,000 shoppers conducted by ForeSee Results, free shipping had a huge effect on holiday sales in 2008. The study showed that free shipping offers play a major role in whether consumers buy in a store or online, and, when purchasing online, where they shop. Avoiding shipping costs was the third most common response for why shoppers choose to buy in a store rather than on a retail website, behind the ability to receive the product immediately and being able to see or feel an item before purchase.

Additionally, consumers gave retailers offering free shipping higher scores than those not offering it—in every satisfaction category. These categories included likelihood to purchase online, brand commitment, likelihood to return, likelihood to recommend, and overall retailer satisfaction.

How to promote free shipping
All of this adds up to one inescapable conclusion: Free shipping can work wonders. So if you offer this option, be sure to scream it out in all of your ads, because your customers will want to know about and take advantage of it.

This is also true for all of the other special deals you offer, from coupons to discounts to free gift wrapping. If you offer it, let your customers know about it! Free shipping and other special deals are the best first impression you could possibly make on potential customers, as well as a great way of ensuring loyalty in the ones you already have.

One note though: If you offer free shipping but with restrictions—such as minimum order amounts or only on certain items—be sure to make that clear, too. The ForeSee study showed that consumers don’t like surprises when it comes to free shipping, but they’re far more lenient if the rules are explained up front.

In this time of tightening belts and careful finance monitoring, consumers are more careful than ever about where their dollars are going. Free shipping is a great way to ease consumer concerns and grow customer loyalty at the same time.

— Noah Belson, Content Quality Analyst

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12 Comments Add your own

1. Pronostic Fotbal | February 15th, 2009 at 5:48 am

Yeah … free shipping definitely attract more customers but the only thing is that the price (with free shipping included) must be competitive with others. I bought some microchips from the US some time ago and they (Microchips.com) delivered with free shipping world wide. I was very satisfied.
2. makepies | March 19th, 2009 at 7:24 am

The article would have been better if it offered some ideas on how the heck merchants are supposed to cover the cost of free shipping. Because when times are tight and prices are already low offering free shipping erodes already skinny margins.
3. The Upgrade Place | March 19th, 2009 at 7:46 am

We at TheUpgradePlace.com offer free shipping on orders over $295 since our products are already priced very low. This is one way to get the best of both worlds. Some merchants choose to raise prices and margins in order to offer free shipping. Depending on the type of buyer (consumer or business), an initial lower price may appeal more than free shipping.
4. ppc-Strategies | March 19th, 2009 at 7:59 am

Yes, free shipping erodes margins. But, you have to consider it a necessary cost of doing business. The end result is you’ll have more customers whose lifetime value more than makes up for the initial hit to your bottom line.
5. Josh | March 19th, 2009 at 9:17 am

I had a free shipping offer on my site when it launched. My sales were not spectacularly different than they are today. I had built the cost of shipping into the original price. Since I removed free shipping I lowered the price below the magic $50.00 margin which improved sales dramatically.

However as I phased out free shipping I added a time limit on the offer (Hurry, the free shipping offer expires on *date*) The result? My product flew out of my door.

So my recommendation is set an attractive price first and see how sales are going. Then try a limited-time free shipping offer (1 to 2 weeks) and promote the heck out of it. Create a sense of urgency. Add a line to your ad copy that says “limited stock” or something like it.

Keep costs as low as possible on the shipping side for the free offer (5-7 day shipping instead of 3 day).

What you will find is a lot of customers who were lingering on your site delaying their purchase (for whatever reasons) are pushed into making the leap and clicking the “buy now” button.

Good luck!
6. Niche Karma | March 19th, 2009 at 9:56 am

In many of our tests we have found that even if you do increase your prices just a little bit, particularly less than the difference of shipping, results tend to be very good. From a brand perspective, which is what matters most, your store is more likely to remain high on the prioritization list of consumers.
7. Niche Karma | March 19th, 2009 at 9:57 am

In many of our tests we have found that even if you do increase your prices just a little bit, particularly less than the difference of shipping, results tend to be very good. From a brand perspective, which is what matters most, your store is more likely to remain high on the prioritization list of consumers.
8. Jon | March 19th, 2009 at 10:34 am

Free shipping is nothing but a gimmick. Any customer with intelligence will look at the total cost of the product plus shipping. Nothing is free, the money has to come from somewhere.
9. Daniel Newby | March 19th, 2009 at 11:19 am

I understand, but have a hard time with, the “free shipping” concept. I designed my site to educate consumers as well as sell product, and I feel like it is a departure from that philosophy.

My solution was to mention “free shipping” on the sidebar, but state on each applicable item: “This price includes shipping.” Perhaps there is a better solution, but, at least subliminally, I hope to help them realize that shipping is always a part of the price they pay.

I do like the limited time offers concept, and increasingly experiment with that. Being the manufacturer, only rarely can I honestly say I have limited supply, so I avoid that phraseology.
10. The Unit | March 19th, 2009 at 1:57 pm

Free shipping. I wouldn’t have it any other way on my site. There are no restrictions. Everything on the site ships for free. It’s pretty simple for the customer.
11. bill parker | March 19th, 2009 at 3:41 pm

Free shipping is the heart and soul of my success. If you can’t do free at least choose a fixed cost (like woot.com) so the user knows immediately upon visiting your site what the cost will be. The unknown S&H costs are the number one reason for abandoned carts at a login screen. it’s just not worth the effort of creating a login to be let down by outrageous shipping costs.
12. ppc-Strategies | March 20th, 2009 at 5:08 am

I stand by my earlier post that free shipping brings in new customers and holds onto existing customers. My client http://www.justnaturalproducts.com is offering free shipping for the month of March, and sales are significantly improved over March 2008. Plus, we’ve communicated the free shipping offer via email to all her retail shop customers, and they are ordering online if they can’t make it into her store. It’s a win/win for her.

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