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How to Offer Free Delivery and Still Make Money Online

Puneet Bhalla

Associate Director - Marketing @ Shiprocket

July 27, 2017

4 min read

Free shipping is a preferred option for online shopping, where customers on buying for a specific amount do not have to pay an additional shipping charge. Shipping of products for free is tempting to customers who recognize transparent pricing structures. This philosophy plays as an advantage for online retail businesses.

The big Question: Why offer free shipping as an online retail business?

Free shipment of items for understanding plays a very decisive and momentous role in online retail business. It is a crucial factor for a customer to decide on whether or not to order from an online marketplace.

  • Offering shipping services for free can lead to increased sales and capitalization on the industry benefits of eCommerce.
  • It offers a holistic option to the customer who is buying, as it integrates multiple costs and delivers a great value to the customer.
  • Only those transactions go through that offer an invariable retail price from product profile page to check out page. Maximum drop in the selling of a product occurs when price changes during checkout. This is one of the most considerable factors in online retail business.

The Crunch: How do Online retailers offer free shipping?

eCommerce is facing a challenge at hand that is to affordably manage to offer free shipping and balances out their expenses as well.

  • The inclusion of shipping within the operations costs and managing the same cost with the inventory control cost to reduce the financial load.
  • Promotion of product delivery for free along with product profiling leads to increased sales as it affects value proposition directly. Moreover, customers like to opt for free delivery while shopping and need to be aware of the fact. It is an important factor in customer decision that turns in high numbers of transactions going through.
  • Focus on operations and up-sells and cross-sells as it can be an efficient factor too. If continuous items are added then shipping can be effective. Profit margins are affected directly by addition of products daily. This factor comes into consideration when merchants incur shipping costs.
  • Establishing a cordial business relation with your shipping vendor can also result in fewer overheads. On generating loyal customers and brand support, products shipment without charges can draw a bigger picture in terms of taking a short-term loss as it can result in big success with time.

The Conclusion: How to offer free shipping and still make money?

Offering to ship products at no cost is considered as one of the most effective marketing tool aiming at an equitable benefit to both the customer as well as the retailer.  There can be multiple ways to create a stable customer base or brand image leading to a stable revenue generation for any online market store. Like Amazon has changed the game and offers different methods of shipping. It offers free shipping, customized shipping, pickup and so on. Amazon has set the trend for other market places to follow.

These are some various ways to offer free shipping to the customers and still manage to earn the profit:

  • A customer place an order for a specific amount resulting in them adding over and above the minimum shopping value to avail complimentary delivery of products. Customers will add products only to avail item’s shipment for nothing.
  • It can also promote up-selling. Promote a couple of products and add free shipping while checking out. This can result in an increased sale and can up-sell products.
  • Offering shipment for free of charge on all verticals for a specific time period can increase selling of products and the retailer can make an immediate profit on any product that does not come under free shipping domain. It can relatively increase sales during an off-season.

All the factors are interconnected and play a vital role both for the customer who is buying and the retailer who is selling. It is important for the retailer to know how to manage this cost in his business. The best way, however, is to merge operational and delivery costs at the time of including any product on portfolio and manage up-selling and cross-selling within this domain.

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3 thoughts on “How to Offer Free Delivery and Still Make Money Online

  1. HI Praveen,
    Almost all new E-Commerce company gives free shipping which includes the product price. When visitor read free shipping there is 75% chances of visitor can buy product from new E Commerce Website. Thank you sharing this nice blog.

    1. Hi Manish,

      What platform have you used for your online bookstore development?
      Kindly let us know so we can assist you accordingly.


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