Free Shipping vs Charging for Shipping | EP 90

podcast Oct 05, 2022

 

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You’ve curated a beautiful subscription box. Your website is nearly ready. But there’s one decision holding you back from actually launching. And it’s all about shipping. Should you offer free shipping or charge for shipping? 

Of course, “free shipping” isn’t free. If you offer free shipping to your customers, you will adjust the prices of the items you sell to absorb those shipping costs and protect your profit margins. 

In this episode, I go deep on all things shipping. The truth is, there’s no easy answer to the free shipping or charging for shipping question. There is no one-size fits all strategy when it comes to shipping charges. There may even be more than one answer for your business. 

 

Think about your own buying behavior. What matters more to you when you’re shopping online? What matters to your customers? 

  • Shippo, a shipping software company, conducted a survey where they found:
    • 49% of customers prefer to pay a lower price for items and pay for shipping. 
    • 40% of customers want free shipping. 
    • 11% of customers want their items fast and are willing to pay expedited shipping charges.  
  • Another report showed: 
    • People prefer paying for low-cost shipping when purchasing lower-priced items. 
    • 93% of shoppers will add to their carts to reach a certain threshold to receive free shipping if it’s offered. 

 

For one-off online sales, offering free shipping once a customer reaches a purchase threshold is smart for a few reasons. 

  1. It can increase your average order value. 
  2. It incentivizes customers to order more items at once instead of placing multiple one-item orders, reducing your overall shipping charges. 
  3. It allows for lower pricing of items because you don’t have to account for as much of the cost of shipping in the price of each item. 

 

Answering this question for your subscription box is more difficult. Do you only ship or do you offer local pickup as well? Does the perceived value of your subscription box allow you to include shipping in the cost of the box or would that make the price “too high?” Don’t be afraid to test options with your audience to help you make this decision. 

Join me for this episode as I talk about what you need to consider when deciding whether to charge for shipping or offer free shipping to your customers and why you may end up choosing one strategy for your one-off sales and the other for your subscription box. 

 

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