Can Free Shipping Really Drive Online Sales?

Anytime you offer something for free, sales will increase. Whether you sell CDs or refrigerators, there are ways to offer free shipping without losing money. It will entail some work on your end, but if it means more sales, it could very well be worth your while.

First determine if your

profit margin can support your free shipping offer. If your profit margin is so low that you would barely break even, free shipping probably won't be an option. Free shipping works best when the item itself is expensive and shipping costs are low.

If you sell small, lightweight items, there are many ways to offer free shipping without gutting your bottom line. USPS Media Mail is a low-cost alternative for mailing books, CDs, DVD, videotapes, and software. Add delivery confirmation, and you have got a cheap, trackable shipping method.

Offering free shipping for orders of a certain size is a great way to increase orders. If you offer free shipping on all orders over $100, customers who have $80 worth of merchandise in their carts may be inclined to spend another $20 to take advantage of the offer.

If you have several competitors that offer similarly priced items and you just can't beat their prices, free shipping may give you the leverage you need to increase your market share. It can be difficult for smaller business owners to compete with large stores that have access to more purchasing power, but free shipping can help level the playing field.

You can also try offering free shipping for a limited time to see if your customers are interested and if it increases your sales. Not only can this help you acquire new customers, but it's also a good way to test the waters and see how much free shipping will cut into your profits.

If you ship mainly large or heavy items, freight companies can be a cheap alternative to national shippers. However, not all freight companies offer door to door service, so warn your customers ahead of time if the company only offers curbside delivery.

Since free delivery is usually synonymous with slow delivery, you should also offer your customers the option of upgrading to expedited shipping -- for an additional fee, of course. This can also help shield you from the costs of your free shipping offer. Customers could be drawn in by your free shipping offer, but subsequently decide they need the item sooner. In this instance, you receive the benefit of offering free shipping without having to pay the cost.

Regardless of who is paying the cost of shipping, it's critical to manage your customers' expectations. If you routinely ship using Media Mail, for instance, you will need to inform customers that it may take up to two weeks for their package to arrive. Delivery confirmation, which is trackable, can go a long way toward assuaging customers' fears about lost or waylaid packages.