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Is Offering Free Shipping to Your E-Commerce Site Nice to Have or Essential?

Back in the day, companies used to make a ton of cash by charging customers high shipping fees. Customers thought that those costs were simply what Fedex or UPS charges to ship that item. But as consumers have become more savvy and so many retails are now offering FREE Shipping, those days of easy profits are long gone.

But the good news is that Free Shipping can lead to huge increases in average order values, conversion rates, and reduce abandon carts. So you might lose a few bucks on free shipping today, but the long term profits of acquiring that customer will more than pay for itself.

Below the infographic, check out some summary points that are pretty powerful.

How Important is a Free Shipping Incentive?

Key Points

I have summarized some of the key points in this infographic:

  • Your competitors are offering free shipping today – 47% of online orders offer free shipping today.
  • According to the Wharton School of Business, 52% of cart abandonment is due to a shipping and handling charge.
  • 61% of consumers are somewhat likely to cancel their order if free shipping is not included.
  • Average order value increases by 30% when free shipping is offered.
  • Offering free shipping is the equivalent of offering a 25% discount on the merchandise.
  • A free shipping offer that saves the customer $6.99 is the equivalent of offering the customer $10 off their order.

Clearly finding a way to add free shipping to your E-Commerce site can lead to huge increases in sales. Depending on the cost to ship your products, this may be a slam dunk or it might be a loss leader.

You can also add some sophistication and merchandising rules to your site to offer free shipping as an incentive for:

  • 1st time visitors
  • loyal visitors
  • customers buying >$100 worth of merchandise
  • customers who saw an ad or email incentive offering free shipping
  • or other incentive based free shipping programs.

You can learn more about website conversion best practices on our site or contact us for more great ideas.

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