Free shipping can be a very tantalizing offer for new customers, as well as those who don’t typically shop on your website. But, as shipping costs continue to rise, free shipping offers can become an expensive venture for your business, especially with so many customers expecting free shipping from most retailers. Here’s how you can best strategize your free shipping offers, so you can get the most out of these promotional deals:
The Necessity of Free Shipping
Back in the early days of the Internet, free shipping was a rarity. After all, shipping costs helped balance out the lower prices consumers often found online. But, now that local stores are matching online prices, and the Amazon Effect continues to impact businesses both online, and in the real world, free shipping has become a necessary part of doing business. The real question these days is not whether you should offer free shipping, but how you can get the most value out of this promotional offer.
Most companies mandate a minimum purchase before giving customers access to a free shipping offer, or exclusive promotion. Even Amazon follows this policy, with its $35 minimum for free standard shipping. When planning out how you can offer a free shipping option, it is crucial to know your margins before creating a shipping minimum. Some businesses require minimum purchases as high as $500 for a customer to get free shipping. Since the margins on these sold goods are so low, any other free shipping offer would not merit a purchase. It’s more of an incentive for repeat customers, who will buy a certain number of goods to get the free shipping deal.
Using Free Shipping as a Promotional Offer
Another way to maximize the value of your free shipping deal is to use it as a promotional offer for new customers, or as a means of selling inventory that isn’t moving as quickly as other goods. Getting new, first-time customers on board with free shipping is one way to offer the promotion, but you’ll have to make sure customers buy more than one item. Even if customers visit the site with one item in mind, offer bundles or other goods as promotions during the sale to encourage additional purchases. If they don’t ultimately buy more than one or two items for the free shipping, include a coupon to encourage future sales that begin with a single promotional purchase.
Another way to balance out free shipping is to align the offer with a greater promotional event. Annual, one-day sales, such as Free Shipping Day, or Small Business Weekend, are opportunities to gain sales, and additional exposure through free shipping. Some businesses send out press releases, and other announcements to inform customers in advance of these events, so they can plan their purchasing. With this time, customers will often scope out a website, and think over a potential purchase, which can result in more purchases than they originally planned with personal, free shipping coupons. These are all viable options for introducing free shipping, and should be used as tools to get the most out of your promotion.
Maximize Margins With the Right Inventory Software
If you decide to utilize free shipping, make sure you maintain a lean inventory management operation, as it is essential to keeping your margins strong. With tough margins, you can use free shipping as a viable, profitable means of growing your business. The right inventory management software can help keep your landed costs down, while facilitating promotional purchase plans, like free shipping. The right software can also make sure everyone at your company is on the same page, whether they be in the warehouse, the office, or the store.
QStock Inventory is a software solution that can do all of the above, and more. QStock can align all of your shipping needs– minimizing your landed costs, maintaining accurate shipping costs, and maximizing the value of any promotion you offer. Contact us today to get started.