Free Shipping

The very title of this week’s column made you look, didn’t it? Free shipping can indeed be a very powerful means of closing a sale.

I recently purchased a pair of mountain bike tires on eBay for $5 each. It sounded like a great deal until you read the shipping price: $17. That meant I could go buy the tires locally for the same cost. But, the ad stated, if I bought more than one item, the shipping would be combined and I could save substantially. OK, I thought, I’ll buy a pair, and the shipping of the second item should only be a few dollars more and it will be worth it. Unfortunately, the way the eBay check out process works is that I didn’t know what the total shipping for the combined purchase would be until after I had committed to buy. It turns out the cost of shipping the second tire was $14 (a whopping $3 savings!) Needless to say, I wasn’t happy. This guy was making the tire look cheap, then making up for the price in shipping charges. That’s a good way to lose people during the checkout process.

In fact I have a customer who has been complaining that too many people abandoned their shopping carts on his website. The problem, according to this customer, is that the shipping costs are too high. (He uses real-time shipping calculations from UPS and charges the customer exactly what UPS charges him with no markup). Since I order stuff from him myself, and often pay $10 in shipping for a $10 item, I could see why his customers would be miffed and abandon their carts. So I made a suggestion to him: stop using real-time calculations from UPS. Instead, figure in the average shipping cost and add this to the price of his product. Then, advertise that he has free shipping. That way, there aren’t any surprises during the check-out process and customers won’t feel like they are getting ripped off. Instead, they’ll feel like they got a great deal.

Research shows that shipping costs are the number one reason for shopping cart abandonment. Sadly, the customer I mentioned above refused to consider my suggestion. If you really want a better conversion rate for people buying from your website however, you need to figure out how to do free shipping.

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