How To Offer Free Shipping on Your Ecommerce Store & Still Make a Profit – Episode 1

Free and fast shipping is the name of the game now. It is a must have for any seller wanting to get ahead of the pack, not only on Amazon, but also on other platforms. While shipping may be free for the customer, you're still paying for it and it's creeping into your margins. Here at Kahoot, we have created the ultimate guide to profitable free shipping and over the next 10 weeks we'll share with you every way you can offer free shipping profitably. To kick it off, we're starting with our best tried and true methods. Number one Structured negotiation with multiple carriers. With Amazon itself getting into the freight and shipping business, other carriers like UPS and FedEx are doing all they can to retain their customers. For these carriers, every bit of business is important, including yours. Chances are you'll get a better deal if you can convince carriers that you are a reliable source of repeat business. First, make sure you have a good understanding of your shipping needs, from your typical weights and delivery speeds to features you need. Then make a formal request for proposal. This will help carriers tailor a good deal for you and it's also easier to distribute across multiple carriers. Number two Convince suppliers to use your shipping account. You might be leaving money on the table if you use your shipping account for only outbound shipments. Since most sellers get inbound inventory shipments from their suppliers, it would be a good idea to convince your suppliers to send them using your shipping account so you get billed directly for the inbound shipment. This translates to more shipping volume on your account and more volume discounts. Plus there might be room to negotiate further. Number three Intelligently set minimum order value. It would be best to avoid delivering low cost items for free as their shipping costs are often higher than the cost of the item itself, leaving very little margin. Setting a minimum order value in your shopping cart helps you generate enough margin to recover some of the shipping cost. One study has revealed that about half of the shoppers will add more items just to qualify for free shipping. That makes a great case for setting a minimum order value for free delivery. 4. Use trade or group association discounts. Trade organizations are not just good for the annual conferences and shows, but they offer a lot more advantages to their members. One of them is member carrier discounts. Depending on the size of the organization, you could be eligible for discounted rates of up to 50% with UPS and FedEx. While UPS does not advertise the associations they offer discounts to, don't hold back from asking your account manager or your association if you qualify. 5. Maximize ground shipping usage. According to a 2017 survey by Bizrate Insights 9 out of 10 shoppers are willing to wait longer for a free shipment. Hence, using the cheaper ground shipping option may be your best bet. Consider offering a no rush delivery option for your customers who are willing to wait for free shipping. Ground shipping uses trucks to ship around the country, thereby reducing shipping costs by 50% versus two day shipping service, giving you better margins. It's also good for the earth because truck deliveries produce up to 85% less CO2 emissions compared to air cargo. To summarize 1 negotiate with your carriers, 2 convince suppliers to use your shipping account, 3 set a minimum order value, 4 take advantage of association discounts and 5 choose ground shipping thanks for watching the first episode of our series. If you enjoyed our content, please share this post with a friend or colleague who might benefit from this series. Keep an eye out for episode two next week in which we will share how to make free shipping work with clever pricing strategies. And lastly, subscribe to our newsletter for even more awesome content delivered right to your inbox. See you next time.