 Welcome to the journey. Today, we're going to talk about how to offer free shipping without hurting your bottom line. Changes, promotions, partnerships, these are just a few of the ways that you might be able to offer free shipping without actually harming your bottom line, which is why we're all here today. And unfortunately, there really is no one size fits all approach when it comes to free shipping. What works for one merchant may completely destroy the profit margins of another. And in some cases, offering your customers free shipping is just not viable, but it's worth doing the math to see how you can offer free shipping as a strategy to really grow your sales. And you're probably asking yourself, okay, should I offer free shipping? I got to say, it's hard to argue the significance that shipping can have on an e-commerce sale. So there was a study done recently, Neely sent my way compiling 41 independent studies and they found out that almost 70% of shopping baskets were abandoned online due to unexpected costs. In many cases, these unexpected costs include shipping fees. So, however, unless a repeat purchase drive a large portion of your sales, offering free shipping might not be profitable. So it's not worth offering free shipping unless you can make the offer profitable. And before even worrying about whether you can make free shipping profitable, you need to test how much making the offer will actually lift the conversion rate in the first place. If offering free shipping won't raise conversion, why go through all the trouble? First, you should A-B test your conversion rate with and without the free shipping offer. To get good results, here are a couple methods to conducting a free shipping test. First, offer free shipping on select items only and look for a bump in sales on those products. If you can offer free shipping on a very similar product without free shipping, it will give you the best insights into how free shipping impacted your sales. You can also offer free shipping during a promotional event. Just make sure to make the promotion long enough to give you a good test. A short promotion period might give you a boost in sales due to the promotion artificially inflating the number of the sales from the free shipping offer. Now, assuming you've done your homework and you've proven your hypothesis is correct, you will have the data that you need to make the best decision regarding free shipping. Well, first off, you can add it into your base price. So think about it, we live in an on-demand economy where you can order countless products with an app on your phone. I know I do. And then they're delivered in two hours or less like Amazon, Walmart, Target and other online retailers. They have made free shipping the norm. And they're really able to do this by adding shipping into the actual product cost. So for example, if you sell a $50 item and the average shipping cost is $7, you just charge $57 for the product and offer free shipping. Even though the price is the same, the psychology of seeing the phrase free shipping makes the buyer and me feel like they've gotten something extra and are more likely to go ahead with a transaction. Now, another option for you, you could use a third party shipping service. So what does that look like? Well, in this case, you might be able to pay a company to basically handle the shipping and packing the orders all on your behalf. And there are two popular ways that you can do this. So first off, there's traditional drop shipping. And with this service, you send your inventory over to the third party warehouse. The drop shipper handles all the order fulfillment on your behalf. So yes, this saves you time and it saves you the effort on shipping. And while this is not free, drop shippers might have access to discounted shipping rates. Again, you can build this cost into the sales price to maintain the same profit margin when you offer free shipping. You can also use a third party program. Probably the most popular is fulfillment by Amazon or FBA, where you ship your product to Amazon warehouse and offer product sales with free prime shipping when selling on Amazon.com. And like other option, Amazon charges fees that can be built into your product's prices. And it's important to understand that these fees can add up fast, but there is risk in building your entire business on another company's platform. If you'd like a video dedicated on how to use drop shipping for your business, let us know in the comments below and give your customers some options. They love that customers like to have some control over cost. And one way to offer that is with shipping to give your customers the option to decide how they want to receive their product. And you can offer basic shipping or for free, or you can let the customer pay more for that expedited shipping that you need it now. And like other options, you really want to price in the cost of basic shipping to maintain your margins, but you can give the customers faster access to products when they want or need them. And if you sell something people regularly need at the last minute, such as like holiday time, for example, those expedited shipping options might be worthwhile to some of those shoppers. Next, you want to evaluate your shipping vendors. Now, while you're in the process of pricing out the plan to offer free shipping, just make sure to check with all shipping vendors to find ways to save money. So let's go through a few. For example, you might get the best deal with USPS, but if you don't know if FedEx or UPS may be cheaper for your products, you want to do the research, right? And don't forget about other shippers like DHL or OnTrack and bulk discounts from online and even self-service shipping tools. While there are three primary vendors used in product shipments in the United States, don't feel restricted to that short list. Let's talk about minimum order for free shipping. I fall for this every time when I'm shopping, but basically setting a minimum order price for free shipping, it's going to help you manage risk in a free shipping program as low-value products. They won't qualify for free shipping on their own. And so this is how many large retailers handle shipping policies. For example, many online stores offer free shipping for orders of $35 or more. And others might offer free shipping using different minimum order sizes to reflect the shipping costs relative to the products costs. And if you have a standard margin on your sales, you can quickly calculate the minimum order price that you need to maintain healthy profits while giving your customers an offer for free shipping. Now, testing different offers is definitely key to find out which shipping method is going to be most profitable for you and your business. So see if you can find like that ideal combination of higher conversion rate and profits that give you a profit boost, as well as some new additionally acquired customers. It's very likely that most, if not all of your competitors are utilizing this due to the growing popularity of online retail. So if this is something that you're wanting to incorporate at your business and for your online store, do the math. It's totally worth it. So you understand your cost and then you can choose the right price and you'll get the right sales strategy and protect your bottom line and give customers the free shipping that they want. All right, that's a wrap. You just learned how to offer free shipping without hurting your bottom line. Be sure to like this video and leave a comment below. Hey, while you're there, subscribe to this channel and ring that bell to get these episodes first. This is The Journey and we'll see you next time.