How to Offer Free Shipping Without Breaking the Bank

While it’s a common practice for many Canadian businesses to offer free shipping during the holidays, more businesses are offering it year-round now in light of more consumers shopping from home. If you want to offer your customers free shipping, here’s some information that can help you decide if — or when — to offer this trendy perk.

What Are the Benefits of Free Shipping?

When you think about it, “free” shipping really isn’t free. While it’s free for the customer, there are still costs involved for you, the business owner. Shipping costs include things like sorting, packing and actual transport.

However, offering free shipping to customers is a huge draw. Some consumers seek out companies that offer free shipping — even when it means they have to add a product or two extra to their cart. In fact, 58% of online shoppers will add products to their cart to obtain free shipping. And 72% of shoppers have abandoned their cart when shipping costs bloated the overall purchase. That adds up to lost sales that could have been made if free shipping were offered.

Setting up Free Shipping and Not Losing Money

With more and more consumers shopping online, free shipping is compelling — especially for online transactions. But free shipping has costs that you as the business owner must factor in.

One of the easiest ways to provide free shipping to your customers without breaking the proverbial bank is adding shipping costs into the overall price of your products. But, keep in mind, pricing is competitive nowadays and can impact customer sentiment. For instance, say your normal pricing for something is $35 and shipping is around $5. You can price your product at $40 with free shipping.

Or you could price the item at $35 and add the $5 shipping fee at checkout. In both instances, the customer’s final purchase price is $40. The added cost of shipping may cause the buyer to rethink the purchase — even though the final price is $40 in both scenarios.

However, don’t just automatically add in shipping charges to all of your products. There are many ways to implement free shipping to initiate a purchase along the customer journey. You can instate free shipping in the following instances:

For a limited time only

This gives the sense of urgency that can create a “now or never” moment along the purchase journey. This can help turn abandoned carts into instant sales.

Once a cart reaches a certain minimum value

This helps you sell more products as customers search for more items to ensure they get free shipping.

On a tier-by-tier basis

If a customer doesn’t care about a longer shipping time frame, offer free shipping. On the other hand, if they need expedited or next-day delivery, offer different tiers of paid shipping for the different delivery windows.

As part of your loyalty program

Keep track of customer purchases and, over time, as customers reach a specific dollar amount in purchases for the month or the year, add a specific amount of free shipping or length of time that customers can enjoy free shipping.

As one-time rewards

For customers who sign up for emails, newsletters or other notifications, offer a one-time purchase with free shipping. For instance, offer free shipping on their next purchase or next purchase above a certain dollar amount.
But, at the end of the day, don’t just opt for free shipping all the time without analyzing how it would fit into your overall sales strategy.

When You Should Charge for Shipping

While free shipping is certainly an incentive for customers, don’t forgo ever charging shipping fees. Charging for shipping makes perfect sense in the following situations:

  • For high-value purchases, customers might view shipping as a non-issue. But, also remember, if the customer is purchasing an item at luxurious prices, don’t risk losing the customer over a shipping charge.
  • When items are over a certain size or weight and it’s a reasonable expectation from the consumer that shipping will be charged.
  • When you’re shipping outside of Canada. The total fees associated with international shipping are many and subject to several factors.

Just remember, you don’t have to choose one or the other — you can do both free and paid shipping. Whichever way you decide to approach shipping charges, just be sure to include shipping costs when projecting your cost of doing business.

Shipping Rules and Regulations in Canada

When shipping products in Canada, there are certain regulations you must follow, such as what can and cannot be shipped, and other rules that apply to shipping internationally.

For instance, there are some products that you cannot ship through the mail. Other items are regulated and must meet specific requirements in order to be shipped. Anything that may be questionable, such as live insects, might require special packaging instructions.

International shipping

When shipping outside of Canada, you may be met with additional fees or restrictions, depending on the destination country. Each country has its own set of rules and forms that must be filled out prior to shipment.

We’re Here to Help You Choose and Implement Your Shipping Strategy

Whether you decide on free or paid shipping, your brand is judged by how seamless your shipping is, which can affect your bottom line. From your Square Online store, we can help you strategize how to print your shipping labels and ship, all through our partnerships.

To get more guidance and tools for your business during this time, check our resource hub.