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  • Free Shipping, hmm?

    Do any of you offer free shipping on your orders? Whether it be at a certain value or during a promotion, do you find it effective? I've been researching ways to up our conversions and it seems like a lot of people bail out due to shipping costs.

    Currently we mark shipping costs UP almost 20% and although I've suggested lowering the cost to my boss he remains convinced that the markup is necessary just to "break even" on our shipping costs... I don't see how that's even possible. We get about a 15% DISCOUNT from UPS due to the volume we ship and yet we can't afford to pay ONE minimum wage worker (yeah, just ONE) to do shipping 4-6hrs a day?

    I know free shipping is an extreme that was once reserved for the big boys (I'm looking at you, Amazon) but it seems like more and more medium-sized retailers like ourselves are offering this to their customers. Personally, I think people EXPECT free shipping, to some degree. We've had customers absolutely horrified by a $12-15 ground shipping charge across the country.

    Anyway, I was just wondering what your thoughts on this subject were and if you offer free shipping, how the heck do you afford it? :D

    Regards,

    Jason

  • #2
    We offer free shipping as a promotional code, which is clearly available throughout the site. We do limited it to orders with quantity of 100 or more. I know another business similar to ours and they offer is on orders over $50.

    I do think it helps a lot with conversion. We ask people to provide us with their event date, if ground shipping won't get it to them in time we call or email telling them what the cost will be to get it to them in time. At this point either their event date is soft or the $$ aren't such a big deal.

    We, like you, get a significant discount from UPS ... but that discount is even greater when air services are used. We don't mark our shipping up, a simple box charge is all we use ($3)- we figure it is part of the cost of doing business. Is shipping a profit center or is it a means to profit?

    Free shipping provides comfort -- even when people don't use it.

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    • #3
      Unfortunately, we offer heavy equipment, machines, supplies and paper stock goods, ALL of which are HEAVY! :(
      We've experiemented and it seems that we've gone out of profit zone due to so many customers in fringe areas or "delivery area surcharges" we were losing out......
      We've compromised, and used a reduced weight than the actual weight to keep shipping charges somewhat in line...

      A lot of customers bail because of shipping charges, but, the UPS and Fed Ex "delivery area surcharges" are becoming more common place....:(
      Last edited by Mark; 02-25-2009, 01:17 PM.

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      • #4
        We also find that a lot of customers bail out bc of shipping charges. As an avid Internet shopper myself, I admit I don't enjoy paying shipping charges, but I by no means expect to get free shipping. I think that is absurd. I have found our shipping charges are pretty competitive compared to our competitors.

        We occasionally offer free shipping promotions, and offer free shipping on orders over $500 all of the time. Unfortunately, I do not receive discounts on shipping (either bc I don't ship enough myself to receive a discount, or bc 90% of our products ship straight from our vendors and we are at the mercy of what they charge).

        We by no means make profit on shipping charges! At this time if we lower our shipping costs, we would have to off set by raising our prices. This is why we currently only occasionally offer free shipping.

        I would love to offer this more often, unfortunately it is hard times for businesses too.

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        • #5
          are you using the distributors for the shipping calculations?
          , what we are having difficulty with is that orders that include a few or more different distributors, the shipping charges calculate a little too high. We may move to the price range / flat fee shipping.

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          • #6
            I have been doing free shipping for orders over $49 for the last two months hoping it will boost sales. But the sales I have gotten, I haven't made anything on them, so the deal ends this week. I notice that my large competitors do not offer free shipping at all, except for occasional specials they run.

            I even had one customer who didn't even know he could get free shipping, that just blew my mind since its in big red letters glaring at him!!

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            • #7
              For the last year I've had free shipping on orders of $75 or more. But for me -my shipping is RARELY over $8 - my stuff is light.

              My cross stitch customers would love to have free shipping at a lower level (it's hard to buy $75 of cross stitch at one time) - but if I lowered it - my jewelry customers would almost always get free shipping - so it stays where it is.

              I KNOW it helps though - I have quite a few customers who add to their cart just enough to get the free shipping - it's worth it for me.

              As a shopper - I always look for free shipping - it's a major selling point for me.
              C Ekman
              Owner/Designer: Cobweb Corner
              http://www.cobwebcorner.com

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              • #8
                Good info, guys, thanks.

                We're currently taking a look at the distribution of Ground shipping charges across the continental USA we normally get. It's a bit of a crap shoot in that we may sell some of our small, light, expensive items (Light up ice cubes) or our heavy, cheap, numerous items (glow sticks). We do have that significant shipping discount though, I figure we should flaunt it.

                Shipping costs range from $8-12 usually, but CAN swell as high as $25. It's those swells I think my boss is afraid of... the math might be able to convince him that it's statistically more probable that we'll make money than lose it, but for the moment he's unconvinced that charging less for anything will ever make us money, haha. We'll wait for the numbers to come in and see what I can conjure up.

                I think offering free shipping at the lowest price level possible (Amazon is at $25 now? ridiculous...) will be key in staying ahead of the game in the current global economy, especially for someone that sells party novelties and such like us :P not too many companies celebrating profits right now

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