Common Shipping Modes Explained

Without a doubt, free shipping has become the boom or bust, make or break, must-have customer-based incentive for most, if not all, online retailers. On the one hand, it’s a surefire way to get customers to fill carts, complete checkouts and come back, time and time again, but on the other, when done ineffectively and without insight, free shipping can and will ruin an otherwise healthy business.

So how do some retailers get away with offering 중국배대지 such an eye-opening incentive without dropping their profit?

That’s easy, they don’t.

But first, the numbers…

The Boom-Style Benefits of “Free Shipping”

Numerous studies have been conducted in the last five to ten years about consumer-based habits in regards to free shipping. One, carried out by the Wharton School of Business in 2004, found that 52% of online shoppers abandoned their virtual shopping carts once they hit the shipping and handling portion of the process.

Another, more recent survey, performed by Forrester Consulting in Q3 of 2009, found that number to be closer to 44%.

Either way, on average, nearly 50% of would-be buyers visit a site, fill their carts and then throw it all away once they see the dollar signs rise in regards to the cost and care of getting it to their door.

When you take into account that some $38 billion – that’s billion with a b – was spent online in Q1 of 2011, and that already astronomical number will ultimately rise as e-commerce continues to explode, it’s easy to see just how much free shipping can effect you’re overall business model. (Not to mention that virtual mallrats, on average, spend 30% more, per order, when free shipping is included.)

So how is it done? Again, it isn’t. (Not like you think it is anyway.)

The Myth of Free Shipping

If you’re reading this as a shipper of goods, an online retailer or an e-commerce upstarter, you probably know by now that nothing in life is free, and that if it says it’s free on the front of the box, there’s undoubtedly a little asterisk next to it with a full deflating explanation on the back. Well, unfortunately, the same thing applies with free shipping.

Like the unicorn, the dragon and the loch ness monster, it’s all made up in the mind, or, more to the point, in the fiscal reports and marketing plan.

Offering outright no cost shipping – essentially eating the overall cost just to appease your customer base – often results in a busted business, or in the very least, a profit implosion. No, in order to offer the one thing nearly every online customer wants, you have to go all Wizard of Oz on the process and perform some ninja-style mental and mathematical gymnastics.