When Free Shipping Makes Sense
Posted by administrator on Wednesday, December 30th, 2009
I've been doing a lot of study recently on the consumer psychology of Free Shipping. It's been really fascinating. Some online stores do really well offering Free Shipping. Others may not do so well. Like most business decisions, it all depends on a number of factors.
In my research, I learned that women are more attracted to a Free Shipping offer than men are. According to some articles (1, 2), people are willing to pay a little more for a product and get free shipping than pay for the shipping cost during checkout. People perceive shipping as a "gotcha" or an "unexpected expense" and is a turn off.
Does Free Shipping make sense to for your business? In my reading, I've learned that it makes sense if you have a high profit margin on your product or if you have a high order volume. I recommend giving it a try for a month to see if you do get more orders. There are several strategies to try:
- Free shipping for certain items.
- Free shipping on orders over a certain order value (encourages larger orders).
- Fixed-rate shipping (standard shipping is $2.95 regardless of order size).
- Free shipping across the board.
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