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Here's a reader question about free shipping offers, from Suzy, as answered by Helen, Ecommerce Strategist on our team: Q: For the past 1.5 years, due to increasing costs, I haven't provided free shipping. Do you have any best-practices thoughts on how to approach free shipping? When to provide provide free shipping? Is it important for a small biz? Should I mark-up my other goods to help balance the free shipping? |
A: Customers hate to pay for shipping, and this is the second biggest reason for cart abandonment. Free shipping thresholds, like free shipping over $100, work very well to reduce hesitation and boost Average Order Value (AOV). Many shoppers would rather spend more money to win free shipping even if that results in spending more overall. They would rather spend more to have more tangible things.
However, this needs to work out for you as a merchant so that the boost to AOV makes up for eating the shipping costs. A rule of thumb for a free shipping threshold is 25% higher than your current AOV. We also like to take that number and compare it to competitor sites and adjust it to a nice round number that fits within the industry standard (but never lower than your current AOV!).
The next best thing to a free shipping threshold would be a flat shipping rate. This is challenging for sites that sell a diverse array of product types with wide-ranging sizes and weights. The idea behind this strategy is that shoppers can mentally prepare for the shipping cost. As they are adding items to their cart, they already know (if your site displays it prominently) that the final cost will be $7 more, for example. That way, they don't have a surprise at checkout that causes them to re-evaluate the purchase all over again. When choosing a flat rate, you will win some and lose some. Ideally, the flat rate feels generous to most shoppers but averages out to cover an acceptable chunk of your total shipping costs.
Question: Answered
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