Online sales and free shipping

The thumbnail version:

  • Shipping costs are a significant consideration in online shopping
  • Businesses have to take this into account when trying to attract customers
  • There are various ways of addressing the issue

The full version:

If you operate an online store there are various ways to promote business. One of the more common ways is manipulating the shipping component of the total transaction price.

Big online business have been doing this for some time. Amazon is a good example. They offer various shipping-cost options including “Prime”, their subscription “free-shipping” scheme. You subscribe to Prime for $9 a month and are then offered “free” shipping on deliveries. $9 doesn’t sound like much but you can be sure that they’ve worked it out carefully and are not losing on the deal. However, that’s Amazon—it’s not going to work for a small business with a limited customer base.

So what can a print shop with an online business do to use the shipping-cost component to make it seem attractive to customers? You can’t simply eat the shipping costs if you want to stay in business. So here are some options to consider:

  • Build the cost of shipping into the product price and offer “free” shipping.
  • Build part of the cost of shipping into the product price and offer partially reduced shipping.
  • You can offer free shipping if the order meets a minimum value at which you can accommodate the the shipping cost without destroying your margin. But if you opt for this, don’t make the minimum so high that it is unattainable—it is bound to be disappointing to customers and probably more harmful than helpful.

If your online business doesn’t address shipping costs as an inducement to do business with your shop, it should. You really have no choice because online customers nowadays expect it, thanks to Amazon and a few other influential online businesses.