Managing Promotions in Shopify: Free Shipping

Managing Promotions in Shopify: Free Shipping

This is the 3rd post in our 5-part blog series exploring the huge returns you can see by using successful e-commerce promotions. Follow them all to get valuable tips on strategically planning promotions and how to execute them in Shopify.

  • Price Discounts
  • Buy One Get One
  • Free Shipping
  • Bundling
  • Bulk Pricing

  • We’ll walk you through how to strategically plan each type of promotion, and show you how to execute them all in Shopify. Follow them to get valuable tips for growing your business!

    Darn you, Amazon. Ever since the behemoth of online shopping started offering free shipping on orders over $25, shoppers have begun to expect free shipping when they purchase online. In fact, free shipping is the most important option to 77% of online shoppers.

    But can you offer free shipping and still be profitable?

    You can, and we’re going to get you started.

    Is Free Shipping Really That Important to Shoppers?

    In a word, yes. Almost two-thirds of consumers review your return policy before buying, and Baby Boomers and women name shipping costs as their number one pet peeve when shopping online.

    Offering free shipping is an easy way to respond to these expectations, and is an easy promotion to explain to shoppers. Plus, it can be a boon to your bottom line.

    How to Make Free Shipping Profitable for You

    While free shipping is free for your customers, someone still needs to pay to get your products from point A to point B. And that person is you. (Womp womp) To make sure you’re still profitable even after paying for shipping, it’s important to make enough on each order to cover shipping costs and still come out ahead.

    When it’s done well, though, free shipping can be a great way to:

  • Increase Average Order value (AOV): Entice shoppers to spend more by establishing a minimum threshold for free shipping, such as “Free shipping on orders over $150”. According to a recent study, 60% of online shoppers have added more to their cart to qualify for free shipping.  

    • Reduce Abandoned Carts: A study from Compete found that three out of five shoppers won’t make a purchase if they aren’t offered free shipping. With the high rate of cart abandonment, anything you can do to regain those lost sales is a big win.

    • Increase Conversions: Free shipping offers -- especially short-term promotions that create a sense of urgency -- can motivate people who are “just browsing” to commit to a sale.

    So where should you begin? Well, you may have begun to notice a theme running through all of our posts in this Managing Promotions blog series: Have a strategy.

    Creating a Free Shipping Promotion Strategy

    To make sure that a free shipping promo is a win-win for you and your customers, you’ll want to execute it in the right way for your business, products, and goals. Good thing that free shipping offers a ton of flexibility in how you execute it. Here are a few options to consider:

    • Free Shipping All The Time: This option works best for large corporations or those with wide margins (cough cough… Amazon), but is risky for smaller online retailers.

    • Free Return Shipping: If free shipping is too costly for your business or your product line includes apparel or other fit-specific items, free returns are a happy medium to soothe customers’ concerns about shipping items back if they don’t fit.

    • Free Shipping with Minimum Thresholds: Ensure your margins and offer an enticing promotion by establishing a minimum dollar threshold, such as “Free Shipping on Orders Over $75”.  This approach requires careful research to find the right minimum based on your expenses and margins, and likely a period of A/B testing to determine the threshold that will bring in the highest profits for your store. And don’t forget that shoppers will often spend more just to reach the free shipping threshold!

    • Slow Free Shipping: This option lets you give your customers a choice: slower shipping for free, or pay for expedited shipping. It gives you the goodwill benefit of offering free shipping, while minimizing the associated cost.

    • Free Shipping on Certain Items: Restrict your free shipping offer to items that either carry a high margin or have low shipping costs (like shoes). This way, you can protect your profits and offer shoppers an appealing promotion at the same time.

    • Membership / Loyalty Free Shipping: Reward your loyal customers with free shipping, just for them. They’ll feel like they get an exclusive benefit, and you’ll help ensure they keep returning to shop again and again.

    It may be challenging at first to figure out which of these many options is the right fit for your store. (Get a kick start with this awesome infographic from Big Commerce: “The Holy Grail of Profitable Shipping”.) Try A/B testing different variations, and soon enough you’ll figure out which delivers the best results!

    Use Free Shipping to Rise Above the Competition

    Would you believe that only 22 percent of merchants display information about their shipping policy on their homepage? Talk about a missed opportunity! And an easy way to get a leg up on the competition.

    Once you establish your free shipping promotion strategy, advertise it boldly at the top of your homepage. Write up a comprehensive shipping policy that addresses general pricing, time in transit, a returns policy and other details and add a link from your homepage so shoppers can easily access the information. It may make the difference between a sale and another abandoned cart.

    How to Use Shopify to Offer Free Shipping

    Your Shopify site has built-in functionality for free shipping in a few different ways. It’s important to note that the following steps only affect the conditions under which free shipping is granted within the checkout process. To make sure your customers know about your free shipping offers, you’ll need to promote them as well. A few ideas for advertising free shipping include:

    • Adding it to a theme banner
    • Noting your free shipping policy in a prominent place on the home page and/or a product page
    • Advertising it in an email campaign, social media or other marketing

    1. Price-Based Rates

    To offer free shipping for purchases over a set dollar amount, start at your admin homepage. At the bottom left click “Settings,” then click “Shipping”. Find the zone where you want to offer free shipping (domestic, military, international) and click “Edit”.

    In the “Price Based Rates” section click “Add Rate”. Enter a name for the shipping rate, such as “Free Shipping Over $150” and then enter a minimum and maximum (if relevant) order price. Select the box for “Free Shipping Rate” and click “Done”. You will be returned to the zone page; click “Save”.

    Customers will now receive free shipping at checkout when they meet the minimum order price. However, the free shipping offer will not be promoted visually -- there’s another step to make sure your customers know about the offer and any related requirements.

    1. Weight-Based Rates

    You can also set a weight limit for free shipping; either a minimum or maximum weight requirement (or both). To do this:

    Start at your admin homepage. At the bottom left click “Settings,” then click “Shipping”. Find the zone where you want to offer free shipping (domestic, military, international) and click “Edit”.

    In the “Weight-Based Rates” section click “Add Rate”. Enter a name for the shipping rate, such as “Free Shipping Under 25 lbs.” and enter the minimum and/or maximum weight limits. Select the box for “Free Shipping Rate” and click “Done”. You will be returned to the zone page; click “Save”.

    1. Discount Codes

    We dipped our toes into the idea of discount codes in the first post of this series, and we’re coming back to it again now. For free shipping offers that are a temporary promotion rather than a long-term policy, a discount code may be the way to go.

    To create a discount code (for example, FREESHIPPING150 for free shipping on orders over $150), you start out -- where else? -- in the Shopify admin area. In the left side menu, click on “Discounts”. Select “Create Discount” and enter a discount code name. Set the discount type (we’re talking free shipping here) and amount. Note whether the code applies to any specific products or collections, customer eligibility and any usage limits. Set the start and end date/time for the discount code, and click “Save.”

    Ta-da! You’re done.

    Free Shipping With Shopify Scripts

    Now, if you’re a bit more on the advanced side, technologically speaking, and you have a lot of logic built out using Shopify Scripts (if this sounds like a foreign language to you, just skip over this part), you may want to continue to go all-in with scripts to create your free shipping promotions. Here at Growth Spark, Shopify Scripts are our lingo. Our secret language. Our… oh nevermind, yeah we’re kind of geeks.

    But if Shopify Scripts are your thing, then we’re your go-to. We can make those free shipping offers happen so you can get to promoting. And making more sales. And lots more happy customers.

    As with all things Shopify, we would love to hear more about how we can help you.  

    Questions? Interested in working with us? Let's chat!