Free shipping is all the rage in e-commerce. But can it work for your shop? It depends on the numbers. A free shipping incentive may be the best way to make it profitable for your WooCommerce shop.
A lot of WooCommerce shops turn to free shipping as a way to boost their numbers. We’ve already explored some of the key WooCommerce data points to track in your WooCommerce store (many of which are featured in the iThemes Sales Accelerator dashboard).
What can you do if your e-commerce stats aren’t as good as they could be?
- Maybe your total sales aren’t rising the way you want.
- Maybe you’re not getting enough returning customers.
- Maybe your average order value is too low, making your profit margin razor thin.
- Maybe shopping cart abandonment is too high.
One simple solution is to offer a free shipping incentive.
Free Shipping Incentive in Action
Free shipping by itself can be a huge motivator. But many store owners are wary of giving away the bank.That’s why you offer a free shipping incentive at a threshold—“Free shipping on orders of $40 or more!”—which encourages customers to buy more and help cover the cost of that free shipping. With this approach, you’re incentivizing customers and helping the bottom line.
Here’s how a free shipping incentive helps:
- Reduces shopping cart abandonment: Extra costs revealed at checkout—like shipping—are cited by 61% in studies of cart abandonment rate as the reason they don’t finish their purchase (next closest reason is at 35%).
- Boosts your average order value: Rather than buying just one thing, customers are filling up their cart trying to cash in on the free shipping. That means each order is more profitable.
- Encourages customers to come back: Knowing you offer free shipping—even if it requires a minimum order—will bring customers back. It’s the kind of thing that makes fans.
- Boosts your sales: All of this will boost your total sales, and more importantly, your profit.
Real World Free Shipping Incentive
A skin care company, NuFACE, gave the free shipping incentive a try. They did A/B testing, offered free shipping at $75, and the results?
- 90% increase in orders.
- 7.32% rise in average order value (AOV).
NuFACE found that the free shipping threshold increases AOV and it’s a common way for stores to score: “Approximately 60% of online retailers cite ‘free shipping with conditions’ as their most successful marketing tool.”
So consider a free shipping incentive as a way to boost your WooCommerce numbers. Read more on how the offer of free shipping affects online shopping.
How to Make Free Shipping Profitable
Wait! How do I make free shipping work?! Fair question. Many store owners are still worried that free shipping will eat into their profit margins.In fact, free shipping is not universally loved. Amazon loses billions on shipping. Some argue that free shipping is a lie.
Using a free shipping incentive as opposed to free shipping on everything you sell should help. Setting a free shipping threshold allows you to establish a minimum order amount. But you’ll need to do some testing to figure out what incentive threshold is both effective and still profitable.
Here’s a detailed post on how to make free shipping profitable. There are also why free shipping matters and how to offer it. Every store is different, so you’ll have to experiment and see what works for your store.
In the end, it all comes down to the numbers. You need to know and understand your WooCommerce store’s numbers. That’s why we created iThemes Sales Accelerator, a WooCommerce reporting plugin and iOS app.
Follow Your WooCommerce Data Points with iThemes Sales Accelerator
To get a better handle on your WooCommerce data points, check out our WooCommerce reports plugin, iThemes Sales Accelerator. With iThemes Sales Accelerator, you can get data on your WooCommerce shop, start making informed decisions and make more money.