Shipping. To "free", or not to "free", that is the question

Shipping, tax and other "extra costs"

The number one reason - by far - that people ditch their cart

People pay for benefits, not products. A marketing consultant told me that. No, hang on .... about 50 marketing consultants and 10 books told me that. But after 25 years of owning a distance-selling business, I still don't know why so many people are adamant it's not a benefit to have the thing they want brought right to their front door. That is, not a benefit worth paying for.

It ain't all for free, Lee

In your role as the E-commerce merchant, have the likes of UPS, DHL or the mail companies ever offered to deliver to all your customers for free? Of course not.

So in reality, it's not about whether or not to offer "free shipping", because you can't. It's about how best to juggle perception and reality to get your customers to pay for the delivery they're going to get in any case. But served up in a cocktail that makes you the most money overall.

The research suggests that most people (61%) are negatively swayed by apparently being "charged" for shipping.

So assuming your market position, prices and profitability are stable: here's a table of suggestions towards hammering out your most profitable e-commerce shipping protocol. The more radical propositions are at the top.

I would humbly suggest that any new approach should be tested in a controlled experiment that uses the original shipping rationale as a control. Get in touch if you need help with that.

Ideas to consider ... and ... test?

Make shipping "free" on everything and see if increased profit from extra business can pay for all shipping and still leave you with more profit than before (I did say the more radical suggestions were at the top)
Make shipping "free" on everything and increase the price of products
Make shipping "free" for your better orders, when the shopping cart reaches a threshold value or threshold weight if that makes more sense
Make shipping "free" when a cart contains only high profit-to-weight products where you're happy to eat the shipping cost
Deal with the shipping, destination country and any tax directly in the cart. People react worse if these are added on later in the checkout process
If you're charging for shipping, get your cart programmed to get the actual cost right for each parcel. For example, if you can work on a weight criterion, weigh every product in your shop and get the cart to calculate the parcel weight and resulting delivery cost correctly. People respond better if they can see that cost varies with a reasonable principle
Have a neutral shipping policy (no profit, no loss). Not a radical suggestion, but at least you'll know you're being fair. If someone couldn't accept paying what it genuinely would cost to deliver it to them by the cheapest viable method, you'll probably be able to sleep at night knowing that that prospect didn't really want it

Need help implementing and testing any of the above?