8 Effective Ways to Offer Free Shipping

Picture this: you’re shopping online and have a clear budget in mind. You find the perfect items, add them to your cart, and the total looks just right. But as you hit checkout, surprise shipping fees send your budget into a tailspin. 

Sound familiar? 

This scenario is all too common and a major headache for online shoppers. In fact, unexpected shipping costs (along with taxes) are the top reason for cart abandonment, accounting for around 48% of lost sales.

If you’re feeling the pinch in your eCommerce business, don’t worry—we’re here to help!

In this article, we’ll unveil eight effective strategies to implement free shipping, keeping your customers happy and carts full.

What Is Free Shipping?

Let’s start with the obvious: free shipping isn’t truly free. 

You might be wondering, how does that work? The reality is shipping a package always has a cost. For a business to offer "free" shipping, they’ve already figured out how to absorb or cover those costs sustainably. So, while it feels free to the customer, the business has a strategy to ensure the shipping expenses are accounted for.

8 Smart Pricing Tactics to Cover Your Free Shipping Offers

Did you know that 62% of shoppers won’t even think twice about leaving their cart if free shipping isn’t on the table? Imagine how many sales you could lock in just by offering this value!

So, here are some practical ways to implement this for your business.

Adjust your pricing

A tried-and-true way to make free shipping work for your business is to adjust your prices just enough to cover shipping costs. You can gradually increase your item prices or add a small amount per item to offset those expenses. 

Think of it as striking the right balance—keeping your prices competitive while offering the free shipping that customers love. Just remember to factor in any additional operating expenses to ensure your business stays profitable.

Set a minimum purchase

47% of customers are willing to spend more just to hit the free shipping minimum. That’s because they feel they’re getting a better deal by adding extra items to their cart rather than paying for shipping. 

It’s safe to say that offering free shipping is a highly effective way to boost your sales. By using it as a perk, you can increase your average order value. A common guideline is to set the free shipping threshold at 35% above your current average order value. For instance, if your average order value is $40, you would offer free shipping on orders over $54.

Create a loyalty program

Another fantastic way to offer free shipping is through a loyalty program. By rewarding your loyal customers with free shipping benefits, you enhance their shopping experience and encourage repeat purchases.

A great example is Amazon Prime. Customers pay an annual subscription fee in exchange for free shipping on many products. However, it’s important to weigh the potential downsides of this strategy. 

Consider whether your customers would be willing to pay for a membership. Think about how you can ensure that free shipping continues to be profitable for your business, especially if members tend to purchase a wide range of products.

Have shipping discounts with promotions

You can cover shipping fees by boosting your checkout rates during big events like Black Friday or payday sales—when everyone is so excited to add to cart! 

For customers, these sales are a golden opportunity to grab the items they’ve been eyeing at lower prices. And when you throw in free shipping? That’s the cherry on top! Not only does it make their shopping experience even sweeter, but it also encourages them to add more to their carts. 

Use technology

With today’s advanced technology, you can leverage it to help cover your business’s shipping costs. Various software solutions allow you to compare rates from different carriers, so you can choose the most cost-effective option.

But that’s just the beginning. Modern technology can even help you adjust prices based on data about product demand, inventory levels, and more. It can notify you of the best times to raise prices while offering your customers free shipping.

From inventory management systems to simple email marketing tools that promote your free shipping offers, utilizing technology is essential. It can quickly help you find ways to provide free shipping without cutting into your profit margins.

Make your shipping more affordable

If you're not careful, free shipping can quickly eat into your profit margins. That’s why, in addition to managing costs at the product level, it’s essential to explore ways to make your shipping more affordable.

Take our strategy at iDrive Logistics, for example. We provide competitive shipping solutions by optimizing the right combination of rates and carriers to deliver packages at the speed and cost our customers need. This ensures our partners can offer free shipping without compromising their bottom line.

Keep inventory close to demand

As a shipping and fulfillment solutions provider, iDrive understands how crucial inventory placement is. We offer our clients a strategy that shortens transit times and makes shipping more affordable.

So, take the time to evaluate your shipping provider carefully. Choose ones with fulfillment centers located near your target markets. This way, you can offer free shipping while minimizing the costs to your operations.

Choose the best shipping provider

Last but certainly not least, team up with a shipping provider that understands your needs and can help you craft the best strategy! 

A reliable partner can offer tailored advice on packaging, route optimization, and bulk discounts—all of which can reduce shipping costs. This strategic partnership lets you sustainably offer free shipping, enhancing customer satisfaction without compromising profitability.

Measuring the Impact of Your Free Shipping Strategy

How can you tell if your free shipping strategy truly impacts your sales? It’s all about keeping an eye on these key performance indicators (KPIs) once you implement it:

1. Average Order Value (AOV): Have you noticed an increase in your AOV after introducing free shipping? That’s a good sign! Many customers love taking advantage of free shipping, often adding extra items to their carts to qualify for the promotion. This enhances their shopping experience and boosts your sales.

2. Conversion Rates: Are you seeing more shoppers completing their purchases? This uptick is likely because free shipping attracts customers to check out their carts, making it easier for them to finalize their decisions.

3. Customer Retention Metrics: Keep an eye on your repeat purchase rates and customer lifetime value. These metrics are key indicators that your free shipping offer encourages customers to return for more.

4. Cart Abandonment Rates: Are there more customers who are successfully checking out? If so, that’s a strong sign that your free shipping strategy effectively convinces customers to complete their purchases.

5. Customer Feedback: Don’t overlook customer reviews! They provide valuable insights into your customers’ experiences. Gathering feedback can help you understand how free shipping has influenced their purchasing decisions and tailor your strategy accordingly.

Optimize Your Shipping to Boost Profitability with iDrive 

Here’s the real deal: Free shipping doesn’t have to be a financial burden! 

Today, businesses have plenty of opportunities to offer free shipping without sacrificing profits or overwhelming their customers. With these strategic pricing tactics and tips, you can successfully navigate this challenging aspect of eCommerce while attracting more customers!

Need a little extra help navigating these tricky situations? We’re here to assist you. At iDrive, we offer more than expertise; we bring a wealth of experience in creating customized shipping strategies for our clients. Our goal is simple: to help you enhance customer experience at a manageable cost.

Ready to optimize your shipping strategy for success? Connect with our team today to get started!