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What are the advantages and disadvantages of offering free shipping? And how can you optimize your shipping with Shipmondo?
Free shipping is one of the most sought-after benefits that online shops can offer their customers. It can lead to higher conversion rates and increased customer satisfaction. However, it also comes with costs and challenges.
Before deciding to go all-in on free shipping, it’s important to weigh both the advantages and disadvantages. Most importantly, consider how you can optimize your shipping strategy with Shipmondo to provide flexibility for your customers while keeping costs under control.
Advantages of offering free shipping
There are several advantages to offering free shipping to your customers. However, as with most things, it should be taken with a grain of salt, and not all tips will fit your specific situation. Here are three key points that might persuade you to consider offering it:
Increased conversion rate and customer satisfaction
Free shipping removes one of the biggest barriers in the checkout process: extra costs. It can be a decisive factor in whether a customer completes a purchase or abandons their cart. By offering free shipping, you can reduce the number of abandoned carts and improve customer satisfaction.
A competitive edge in a crowded market
The e-commerce market is more competitive than ever, and free shipping can give you an edge. For larger companies, free shipping can be an attractive offer that builds customer loyalty and attracts new buyers. On the other hand, for smaller businesses, the cost of including shipping in the price might be too high.
Increased average order value
Many businesses set a minimum order value to qualify for free shipping. This strategy encourages customers to add more items to their cart, helping to offset shipping costs and increase revenue per order. However, it’s a delicate calculation, as heavier or bulkier orders may cost more to ship, even with the same carrier. It’s important to strike the right balance when setting your threshold for free shipping.
Disadvantages of free shipping
While there are advantages, free shipping also has its downsides. It might not always be economically viable for your business, especially if you already have favorable shipping rates that your customers find acceptable. Here are three considerations to keep in mind:
Costs that Impact the bottom line
Free shipping isn’t free for your business, and as order volumes increase, shipping costs can quickly add up—even if you can negotiate better rates as your shipping volume grows.
Shipping costs are never entirely predictable, making it difficult to determine when free shipping will make sense financially. Changes in carrier rates and unforeseen logistics expenses can erode your margins on “free” deliveries.
Customer expectations for speed and service
When you offer free shipping, customers often still expect fast and efficient delivery. If your logistics can’t meet these expectations, it can lead to lower customer satisfaction and potentially harm your brand’s reputation.
International shipping challenges
For businesses that ship internationally, offering free shipping can quickly become a complex issue. Different markets come with varying shipping costs and requirements, making it hard to offer a uniform free shipping solution across regions.
Shipmondo Delivery Checkout: Free shipping with options
With Shipmondo Dilevery Checkout, you can offer your customers a flexible checkout experience where they can choose their preferred carrier and delivery method.
For instance, you can offer free shipping to customers who are willing to wait 2-3 days for their package, while those who need next-day delivery can pay for expedited shipping. Shipmondo allows you to manage both free and paid shipping options while letting customers choose between multiple carriers based on their delivery needs.
This flexibility reduces your costs and improves customer satisfaction.
Unique shipping options
Having multiple carriers enables you to offer tailored solutions to your customers. For example, you can offer afternoon delivery with Instabox, early morning delivery with dao, or flexible home delivery with PostNord.
If one carrier is particularly popular among your customers, you can negotiate better rates with them. If these rates are favorable, you might even offer free shipping exclusively through that carrier, while keeping other options paid.
Free returns
You can also offer free returns, allowing customers to easily return products. This can encourage customers to complete purchases, knowing they can quickly and easily return items if necessary. It may also lead to higher basket sizes as customers feel more secure.
Additionally, free returns can provide valuable insights by collecting data on why customers return products, helping you understand your target audience and improve your offerings.
Make returns easier with Shipmondo’s Returns Portal.
Optimize logistics and Order Management with Shipmondo
Shipmondo offers more than just flexible shipping solutions. Features like digital picking routes and a returns portal can streamline your order management, saving both time and money.
Digital picking routes optimize picking and packing processes, reducing errors and increasing efficiency. Meanwhile, the returns portal automates and simplifies the return process, ensuring a hassle-free experience for your customers and reducing internal workload.
Shipmondo also provides performance analytics for picking and returns, allowing you to continually optimize your warehouse operations.
Our Delivery Checkout is tailored to specific platforms like Shopify, WooCommerce, and Prestashop. We develop all solutions in-house to ensure they are optimized to support the various needs our customers may have.
Want to try Shipmondo?
Create a Shipmondo account today and gain instant access to our shipping module and order management tools. With Shipmondo, you can create a flexible shipping strategy that suits both your customers and your business—whether or not you choose to offer free shipping.
