"Free" Shipping: What Your Business Can Learn from Amazon Prime

should-you-offer-free-shipping

Amazon announced that its annual membership, Amazon Prime, will now cost $99 per year, up from $79. The $20 extra isn't a huge increase considering Prime membership includes multiple benefits such as the ability to borrow Kindle books, stream movies, television shows and more. But the real value in Prime is the two-day shipping on a large number of Amazon items at no extra cost.

I’ve actually caught myself boasting about my Amazon Prime membership because it “includes free two-day shipping”. Funny, how that works right? I pay $79 $99 a year, just so I can get “free” shipping at the time of my actual purchase. I’m well aware it costs me, but that membership doesn’t just buy me exclusivity, it buys me peace of mind. I always know that if I buy a Prime-eligible product, I’ll get it in two days and I’ll pay zero dollars for shipping. No questions. No thinking. Just buy, buy, buy.

Wouldn’t it be nice if we could all offer features like this as sellers? Something that makes our customers happy, keeps them coming back *and* increases our profit margin? Of course we all can’t be Amazon. But exchanging "free shipping" for something that's of value to your marketing strategy could be incredibly profitable in the long run.

This post isn’t dedicated to telling you whether or not you should offer free shipping. Our goal is to provide you with the most strategic ways to leverage free shipping once you have decided you’d like to test it.

 

Here are six strategic moves when offering free shipping for your online store:

1. Push for customers to “qualify” for free shipping.
If you are hesitant to offer free shipping to all customers, then follow Amazon Prime’s lead and focus on member-based incentives. For small businesses, grabbing an email address from a potential customer is GOLD. It takes little time for someone to type in their contact info, and it won't feel like they're giving too much to get something in return. This will allow you to market to that person even if they don't purchase something right away.

 

2. Use it to move the process forward.
According to a Forrester study, 44% of online customers abandon their shopping carts because of high shipping costs. If you have people who leave things in their shopping cart for days, then offer free shipping as an incentive to click “buy”.

If you’re a Shopify seller, you can take advantage of their Abandoned Checkout Recovery feature which allows you to send automated recovery emails that get people back to your store so they complete their order. (This is only available for their “Professional” or Unlimited plans, but they also have several options in their app store that provide similar features.) If you can capture who is leaving items behind, you can add them to a list in your email marketing software and send them an offer code for free shipping.

 

3. Offer it to first time buyers only.
First impressions are everything. And for a lot of small businesses, customer loyalty is all about a really positive, interesting brand experience.To build credibility with a new customer, offer them free shipping. Something as small as a friendly, “Hey, we see you’re new! Let shipping be on us with your first purchase!” can make a huge impact.

To make it go further, just ask that they share their purchase on Twitter or take a photo of it on Instagram. At the very least, you should be (again) capturing their email address and encouraging them to opt into your marketing emails.

 

4. Leverage evangelist to share their purchases in order to get free shipping.
Have some repeat customers? Get them to share some of their favorite products in order to get free shipping on their next product. Make it a discount code that never expires so they are more motivated to take action quickly for something they know will be accessible for a while. Use social media tracking tools to see if it causes a spike in mentions and discussions that include your brand.

 

5. Give it an expiration date.
On the flipside, see if people respond to immediacy. Use holidays to offer free shipping and see if people tend to respond to that more. Often times, you’ll notify them via email or through your social accounts. Be sure to use a tool like Bit.ly to track links so you can test how successful limited-time offers are.

 

6. Test against discounts.
If you are really not sure that free shipping is going to be a good fit for you, test them to gauge the success against ongoing discounts you offer. Within several email marketing platforms, you can track the success of various offers. If something will potentially have a large impact on your profit margin, ALWAYS test it.

 

Whether its free shipping, exclusive access to products or suggested products providing a more unique experience for your customer, looking to larger commerce organizations like Amazon can be helpful. Be aware of the commerce and multichannel selling trends, then think of creative ways it can be scaled for your business.

And if you’re at a loss, just come back to the Stitch blog and we’ll help you find the best route.

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