How small businesses can offer free shipping to customers

Everyone loves free shipping, and these days most people expect it when they shop online. Before you absorb the shipping fees, consider whether it makes sense for your business. Let’s discuss the benefits of free shipping and how you can make up for the costs, so it’s a win-win for you and your customers.

Female business owner shipping package

Benefits of free shipping

While free shipping is a fantastic deal for shoppers, it’s also an effective marketing tool for small business owners. By placing a digital “Free Shipping” banner on your homepage, you’re bound to catch potential consumer’s attention. Free shipping can also be a great incentive to complete an online purchase. 70% of shoppers abandon their cart at some point in the payment process—and a whopping 49% do so when they discover shipping fees.

If your product or price-point doesn’t enable you to offer free shipping, inform customers when they view their cart. If your product has a flat-rate shipping fee, let shoppers know the exact amount. If shipping fees vary, consider adding a shipping rates calculator application or plugin to your e-commerce platform. Once installed, customers input their zip code to see the exact shipping costs.  

 

Can you afford to offer free shipping?

Providing free shipping is profitable when you're taking orders on products priced high enough to cover the average shipping cost. Take a look at your profit margins and see where you can adjust.  

  • Increase prices accordingly. You may benefit from increasing product prices slightly. However, if you raise them too high, you may end up turning customers away, so make sure you’re comparable to your competition.
  • Offer free shipping with a minimum order value. For small businesses that sell lower-priced items offer free shipping on orders over a certain amount. One strategy is supplying free shipping at 15% more than your average shopping cart order. For example, if a customer’s order is $65, then offer free shipping for all orders over $75. From the shopping cart, let customers know how much more they need to spend to qualify for free shipping.
  • Use economical shipping methods. It's important to let your customers know what kind of free shipping to expect. FedEx Ground® shipping is the most cost-effective method and can take up to a week for delivery. If you sell products requiring expedited shipping through FedEx Express®, like FedEx Standard Overnight® or FedEx 2Day®, covering these costs is more expensive. Many retailers do not cover expedited shipping costs unless it’s integral to their business model.
 

Figure out your free shipping marketing strategy 

You don't have to provide free shipping on every product you sell, and you don't necessarily have to offer it all the time. There are other options you can explore, including several ideas listed below:

  • Provide free shipping on a consumer’s second order, rather than their first. This encourages them to shop with you again.
  • Make it a VIP perk. Offer free shipping for those who regularly order, have spent a certain amount, or have signed up to become members of your exclusive club or rewards program.
  • Gift free shipping when a customer purchases two or more of the same product.
  • Craft a special free shipping promotion that takes place several times a year, like around holidays or for customers’ birthdays.
  • If you can't provide free shipping, offer a discount on shipping fees for certain products, on orders over a specific value, or for first-time customers.
 

Whichever free shipping marketing strategy you choose, know you can always remove or adjust it whenever necessary. Start small, experiment, and watch the response from your customers. Soon, you'll discover how to offer free shipping in a way that best suits your business needs. To learn more, visit our Small Business Center for additional tips and insights.

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