Ship it, Ship it Free
Recently, the topic of ‘Free Shipping’ came up in a discussion with a few small business owners. As we near the height of the holiday season, it seemed a timely topic for this week’s Blog.
If you make a physical product in your business, invariably you will need a way to deliver said product. That cost is normally referred to as a shipping fee or delivery charge. There are a few strategies to approach this transportation dilemma.
First, assuming you have a physical store, office, or plant, you can consider offering on-site pickup. This strategy can appease your local customers, at a minimum. If your product buyers are mostly local, this can be a win win for both sides. You as the business owner do not have to incur any delivery fees and the customer doesn’t have to view that annoying extra cost on their bill. Yes, I used the term annoying, as for many of us, that is what this is. And with so many sites/stores offering some form of ‘free’ delivery, it is one of the most sensitive costs a business owner can try and have their customer cover.
Second, you can employ a ‘Free Shipping’ threshold. This seems to be very common on most sites I have shopped online. And, trust me, I shop a lot online. Business owners set a particular dollar amount where free shipping kicks in for their buyers. This works best if the business is using a mail or delivery service which has a flat fee amount. Depending on the dimensions of your product, the flat fee can easily be absorbed into your sales price, particularly if the customer is buying more volume. And offering a free shipping dollar threshold may shape the behavior of your buyer and see them buying just a little bit more to avoid the fee. If each customer buys more, you will have a healthier top line revenue amount, something that can only help your business grow.
Shipping your product near and far may have different strategies to ensure the cost does not impede your profit margin. Do the math, know your break even point, and make sure that shipping fee is minimized for you in-house or find the most economical and less annoying manner to pass it along to your customer base. Sometimes, it is all about optics. Negotiate a flat fee with your chosen delivery service, add that to the price, and advertise Free Shipping. If you choose to deploy this strategy at any level, make sure your customer base sees those two words ‘Free Shipping’. Trust me, many of us seek out stores and suppliers whose website or buying terms feature those two words.
in the end, whether you choose to ship it free or just ship it with its cost, be like Callie the Schnauzer, in our Blog photo, know your options and when you are ready to make the jump, ensure you land on solid ground . Find a way to cover those costs so you can continue to have a healthy profit margin.
Be well.
