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How to Increase Profits by Offering Free Shipping

Posted on Mar 21, 2023 11:45:00 AM by Brandon Draga

In today’s world, small businesses that ship parcels and LTL pallets are constantly seeking ways to stand out in the market.

While the eCommerce industry is growing rapidly, these businesses face their own set of challenges.

Small businesses need to cater to customers who require both large and small shipments.

One of the most popular tactics that small businesses use to attract and retain customers is free shipping.

Offering free shipping can be an expensive proposition, and small businesses need to be strategic to ensure that the benefits of this service outweigh the costs.

In fact, the increased overhead can quickly make free shipping a financial burden if not managed carefully.

To offer free shipping effectively, small businesses that ship pallets can employ some useful tactics. By being smart about offering free shipping, small businesses that ship pallets can not only improve customer satisfaction but also increase profits.

This is especially important in today's competitive market, where every advantage counts.

Ultimately, the key to success is to find the right balance between offering free shipping and managing the costs associated with it.

With that in mind, let’s take a look at some tactics you can use to not only offer free shipping effectively, but to do so in a way that can increase your profits!


Utilize Order Minimums

This tried-and-true tactic is effective for multiple reasons.

Firstly, there have been multiple studies that have found that customers, when offered free shipping on orders above a particular dollar value, will often increase their order size to qualify.

In fact, Statista reports that as many as 48% of consumers will buy more to avoid paying for shipping.

Not only will this tactic incentivize customers to spend more on a single purchase, but will also encourage customer retention, resulting in repeat business with an overall higher average order value (AOV).

This, in turn, will help to mitigate your shipping costs as customers will be more inclined to place larger individual orders over multiple smaller ones.




Include Free Shipping as a Loyalty Perk

As we alluded to above, customer retention is an ongoing concern for many businesses.

With the market completely saturated with options, it is integral to make your customers feel that it is worth their while to remain loyal to your brand over others.

Offering free shipping as a loyalty perk is a solution that, in and of itself, can take on many forms.

For instance, this could be as simple as offering free shipping on a customer’s milestone orders (every fifth, tenth, twentieth order, etc).

This not only encourages repeat patronage but will open customers up to receiving further marketing and conversion opportunities for your business.

Free shipping as a loyalty perk could also work in tandem with the order minimum technique.



Source: Medium


Offer Free Shipping for a Limited Time

Despite how much we’ve discussed the importance and ever-present nature of free shipping in the small business ecosystem, the reality is that for many smaller businesses offering ongoing free shipping is simply not yet a cost-effective option.

If you are looking for a way to reap the benefits of offering free shipping but haven’t yet grown to the point where it’s a viable long-term strategy, there is certainly an argument to be made for offering your customers free shipping within a limited time frame.

As a means of increasing conversions, offering limited-time shipping (such as during a holiday weekend) can serve as a marketing tool in the same way as offering discounts on items, encouraging potential customers who may have been hesitant in the past.

It creates a sense of urgency or fear of missing out (FOMO) in the buyer's mind that pushes them toward the impulse to make the purchase in the moment.

In terms of customer retention, limited-time free shipping could also be used as a loyalty perk.

Much in the same way many businesses offer exclusive deals to customer on their mailing lists, offering occasional promo codes for limited-time free shipping to customers on your mailing list will not only encourage audience retention, but will also incentivize those customers to place orders with higher AOVs while free shipping is offered.




Make Free Shipping More Cost-Effective with Freightcom

It may seem like an oversimplification to say that to see higher profits on free shipping you simply need to pay less for shipping.

With Freightcom, however, it really is that simple!

Freightcom is the all-in-one shipping management platform that provides businesses with discounted, real-time rates on LTL and parcel shipping from North America’s leading carriers.

We help you quote, book, ship, and track all your shipments in one place, saving your business time and money, all for zero upfront or monthly fees!

Contact one of our shipping experts today and start getting business shipping so good you’ll want to give it away for free.

Book a Demo

Topics: Shipping Tips, LTL, eCommerce, Parcel

Brandon Draga

Written by Brandon Draga

Brandon Draga is a full-time content writer at Freightcom, the leading shipping solution for businesses in Canada. When Brandon is not writing content to help businesses with their shipping needs, he can be found at local skate parks or writing fantasy novels.

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