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Exploring Free Shipping Options

Jul 1, 2009

Since shoppers are interested in buying from retailers who offer free shipping, that service will only increase a merchant's online sales, according to Luke Knowles, the founder of FreeShipping.org. "There are many different ways to offer free shipping," Knowles explained.

"Retailers might try one and not like it, but it is ideal to experiment," he said. In an eBook entitled, "The Free Shipping eBook," which can be downloaded for free at www.freeshipping.org/ebook he has written about the seven types of free shipping offers. The book is written for both large and small online retailers.

1) Free Shipping on Everything (or Free Shipping Without Conditions). Merchants who have a high enough profit margin can offer free shipping with every order. Many shoe and jewelry merchants offer complimentary shipping on everything for this very reason. Lalit Dhadphale of HealthWarehouse.com began offering free shipping on all orders in August 2006, a first in the online healthcare segment. Lalit said, "We opted to go free shipping across the board with no coupons or minimums for everyone and the results have exceeded our expectations (and our customers as well)." This is the most enticing deal for shoppers and can generate increased sales.

2) Free Shipping with a Minimum Order. The most common free shipping offer is free shipping with a minimum purchase price. This type of free shipping offer encourages shoppers to spend more to qualify for the discount. Also, as fuel costs increase, merchants can raise the spending limit needed to qualify for free shipping. If the average customer spends $90 per order, try offering free shipping on purchases over $100. This will encourage shoppers to buy more to get free shipping.

3) Free Shipping on Select Items. Many merchants selling small and large items promote free shipping only on select products as it is not cost effective to offer free shipping for oversized items. This type of free shipping offer can be a great way to quickly increase sales on overstock items or last year's model.

4) Free Shipping Site to Store. Some large merchants like Walmart and Sears offer free shipping when you pick up the items at a physical store location. At first glance the site to store savings may not be as apparent to the customer without front door delivery. However, as Walmart.com offers a much larger selection than a local Walmart store, it is still a benefit to the shopper. Free shipping site to store can be a great way to get customers to enter your physical location.

5) Free Shipping by Delivery Location. The author estimates that more than half of all free shipping offers are for deliveries within the continental U.S. Don't forget about Alaska, Hawaii, and U.S. territories. Many merchants who provide complimentary delivery only offer it to the lower 48 states. By offering free shipping to locations outside of the contiguous U.S. you can create an advantage over competitors in those markets.

6) Free Shipping by Membership. Membership has its rewards. Many online retailers offer free shipping to those who have joined a special members only club. It is customary to charge an annual fee for membership. A prime example of this is the Amazon Prime membership, which gives members free two day shipping on their orders, among other rewards. For $79 per year members join Amazon Prime. Sears has a similar offer called ShipVantage. Free shipping with a membership can help to build customer loyalty. Loyalty programs are a great way to lock in future purchases.

7) Flat Rate Shipping. Flat rate shipping differs slightly from free shipping. Flat rate shipping is when a retailer offers a low shipping rate regardless of purchase price, quantity, or weight. The Gap and Old Navy both offer flat rate shipping of $7 for any size order and Kohl's regularly offers 99 cent shipping per item. Customers shop with confidence knowing that delivery costs will not increase with a larger shopping cart. This helps to reduce abandoned shopping carts. A flat rate shipping offer is also attractive to shoppers because it allows them to know what the shipping charges will be up front.

Knowles and his wife, Maisie Knowles, founded FreeShipping.org in December 2007. The site is a one stop destination for consumers to find online retailers that offer free shipping deals. Currently, there are more than 1,300 retailers that offer free shipping deals and discount coupons on FreeShipping.org.

Topic: Business Strategies

Related Articles: shipping 

Article ID: 1095

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