Online retailers are constantly looking for ways to increase sales and convert customers. You can increase sales and improve your bottom line by offering free shipping.
Numerous case studies and surveys show that free shipping is a good idea.
- 81% of customers consider free shipping their top concern when they shop.
- 93% of shoppers take action to qualify to receive free shipping. The most popular action is to add items to your cart.
- 50% of consumers prefer a faster transit time in order to be eligible for free shipping. 83% of buyers will wait 2 to 3 days to receive free shipping.
If the shipping costs and logistics are not considered and properly analyzed, free shipping can be detrimental to your business and margins. It is important to plan carefully and consider dropshipping before you offer “free shipping”.
Dropshipping free of charge
Dropshipping is when a retailer buys products from their supplier individually (as they are being sold) instead of buying bulk wholesale. The supplier then ships the product directly to the customer on behalf of the retailer. This supply chain strategy is dependent on your supplier’s ability to ship your products promptly and at a cost-effective rate.
Dropshipping can reduce margins. It depends on the shipping arrangements you make and the applicable dropship fees from the supplier. Free shipping might not be possible if the product is priced beyond what is reasonable.
Although you cannot control the dropship fee of the supplier, you can control the shipping arrangements. You can offer free shipping by getting to know your shipping costs and finding creative ways to lower them.
My Shipping Carrier account or My Supplier’s?
Many suppliers offer the possibility to ship your products via their shipping carrier accounts (Fedex or UPS, USPS etc.). Suppliers often permit retailers to use their account upon request. You may get lower shipping costs if the supplier has negotiated rates. This has the downside that you don’t have as much control over shipping costs and can’t see them. It can be difficult to control and analyze shipping costs in order to make sure you are making a profit on every product sold.
You will need to answer some questions to determine if you want to use the supplier’s carrier account or your own.
Which shipping method does your supplier offer? What free shipping options do you offer?
- Is your supplier offering lower shipping rates than your carrier account?
- Is your supplier located in multiple warehouses? What does this mean for shipping costs?
- Is your supplier able to ship internationally? How does that affect shipping rates?
- What are the “breakpoints” at which product size and weight significantly increase shipping?
- What is the likely highest shipping cost for an order?
- What is the most likely shipping cost for a free shipping order?
These questions are a great way to start deciding what products you want to ship and where you would like to ship.
Limited “Free Shipping” on Certain Products/Locations
You should avoid confusion about which products are eligible for free shipping. The key benefit of free shipping is that it eliminates the need to calculate costs, which can sometimes prevent customers from buying. It reduces the effectiveness and efficiency of the strategy if the customer has to still determine which products have shipping costs.
It might make sense to offer free shipping to certain products or certain geographic locations. Once you have a better understanding of your shipping costs and the shipping methods that you wish to offer, you can outline a simple “free shipping” offering. It should be as easy as possible, and it should not exceed 1-2 price ranges or product categories that offer free shipping. It is important to clearly indicate the locations.
This free shipping offer from a kayak ecommerce store is an example. It appears to avoid shipping unprofitably and still offers free shipping
Multi-Warehouse Supplier With Location Based Order Routing
Dropshipping products to your ecommerce store from a supplier should be considered. Some suppliers, usually distributors, will have multiple warehouses and order routing that is location-based.
Suppliers who can reduce the shipping distance and lower shipping costs for your orders will have a better chance of giving you free shipping.
Asking “How many warehouses do your company have” and “Do you route orders to closest warehouse based upon shipping address” will help you determine if shipping costs can be reduced by your supplier.
Avoiding Split Orders
Split orders are a shipping nightmare for dropshippers. Split orders are when your customer requires that their order be shipped in two separate boxes. This can often double the shipping cost.
This is the most common scenario in two e-commerce environments.
First Scenario: A supplier has multiple warehouses that stock a product. They receive an order with a large quantity that will require them to pick up and ship the product from multiple locations. This means that two separate orders must be sent and arrive at the customer’s doorstep in different boxes.
Split orders can be avoided by starting with the number of products you display on your website. You will need to show the average product quantity for each SKU in your warehouse when syncing inventory. This is better than showing the sum of all products in stock. This will reduce the likelihood of an order being sent that has to be split.
Let’s take an example: Your supplier provides a product quantity 1 in the first warehouse, and 3 in second warehouse. You would display a quantity of 2 on the e-commerce site, instead of adding the total to 4. This would reduce the likelihood of split orders. This is often done at large scale using Dropship Automation Software.
Scenario 2: A customer orders multiple products from different warehouses or suppliers. This is a common occurrence.
Dropshippers can’t avoid the possibility of split orders, but there are ways to reduce the likelihood.
To avoid this, you can work with a few larger distributors that stock a variety of products and have thousands of SKUs across multiple brands and product lines. It is also important to find distributors with a lot of the same products in their warehouses. This will help you avoid split orders.
Taking a leaf from the Competitors’ Free Shipping Strategies
Dropshipping operations are dominated by strong competition. This indicates that the niche chosen is sustainable and profitable.
It can be helpful to look at what competitors brands do on their websites, blogs, and social media posts. Businesses can, for example, pay attention to how rival campaigns are written to find out what works best.
A business can keep abreast of the strategies of its competitors to help it create free shipping campaigns that increase conversion rates. This is done by capitalizing on any gaps left by other sellers when optimizing their stores for free shipping.
Requesting Product Samples
Dropshipping companies can give customers a taste or a feel for the products they offer by ordering samples.
This strategy allows businesses to evaluate the packaging and delivery time used product suppliers, and make appropriate changes to improve customer experiences.
Dropshipping is a service that allows for free shipping. Businesses should assess the cost-effectiveness to their customers.
Dropshipping: Which E-Commerce Platform is Right for You?
Dropshipping businesses can be run smoothly by e-commerce platforms. There are many options, but some platforms can make it difficult to offer free shipping.
Shopify shipping, AliExpress shipping and Wix shipping services automate tax and freight calculations, making checkout much faster.
Automation can increase transparency and customer trust. If you want your business to reap the benefits of free shipping, it is important to set up your store on an ecommerce platform that allows you to grow and fulfill all of your shipping needs.
An Analysis of the Average Shipping Time for Fulfilled orders
Dropshipping shops have a difficult time setting expectations for shipping time, especially when they don’t know what their average product fulfillment times are.
The ship time estimate for a product is not often provided by suppliers. Businesses can calculate the average order processing time and delivery time.
Dropshipping shipping times can be evaluated firsthand by companies so that they can choose the most efficient dropshipping delivery method for free shipping.
Allowing Customers to Know the Average Shipping Time
U.S. consumers are concerned about convenience. Customers can have a better shopping experience by having tracking information provided to them by businesses. Customers should know the estimated delivery time.
Transparency is key to disarming customer complaints and refund requests.
Create Appealing Free Shipping Campaigns
Impulse buyers may be more attracted to a campaign that has a time limit than one without one. This will help reduce abandonment of online shopping carts, and it may convince customers that free shipping is a good idea.
Dropshipping businesses can offer free shipping to encourage buyers to buy. The offer should be communicated to the targeted audience.
You can attach the campaign to a popup that will appear on the screen whenever a customer checks in or visits your store.
Using a Unique and Effective Free Shipping Model
Dropshipping companies can attract many customers with free shipping because they are different from other businesses, and can be used as a permanent or temporary marketing strategy.
If implemented correctly, it can be a significant selling point for online shops.
When setting prices to generate profits, shipping costs must always be taken into account. Dropshipping models should consider the effectiveness of dropshipping delivery methods.
Customers can enjoy the service only on selected products or all products.
All Visitors Informed About the Free Shipping Service
Posting free shipping campaigns on product pages or mailing lists can increase their visibility. To increase conversion, businesses should make sure that the information is accessible by existing and new visitors.
Head banners can be used to direct customers to pages that offer free shipping information.
This is where the endgame lies: to build a loyal customer base and strengthen a company’s brand.
Loyal Customers and First-Time Buyers Get Free Shipping
A retail study showed that 9 out of 10 online shoppers consider free shipping to be an incentive to shop online. For increasing sales and winning new customers, free shipping is a powerful marketing strategy.
Online retailers have the option to offer free shipping to their loyal customers. To help grow their business, they can offer free shipping to loyal customers or first-time buyers.
Targeting Markets with the Best Shipping Options
Only markets with the best shipping options can benefit from free shipping strategies
Posting ads on platforms like AdWords or Facebook is one way to reach your target audience. These platforms give advertisers insight into where their ads are displayed.
Effective free shipping campaigns can be created by businesses that have a good understanding of shipping costs and delivery times. Campaigns that target markets with lower shipping costs and quicker delivery times will improve product fulfillment satisfaction.