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Online Selling Trends 2014: Free Shipping or No Free Shipping?

In previous installments of Online Selling Trends, our panel of ecommerce leaders discussed the challenges and opportunities that lay ahead for online sellers in the New Year; they answered the question, Amazon – friend or foe; and they discussed how Google Product Listing Ads changed ecommerce.

In today’s installment, panelists tackle the issue of whether online merchants should offer free shipping or not. We also ask them, “What’s one thing online sellers may not know but should?”

Joining us on this year’s panel is GoDaddy SVP of Productivity Apps Steven Aldrich; Endicia General Manager Amine Khechfe; and StellaService CEO Jordy Leiser.

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EcommerceBytes: Free shipping or no free shipping?

GoDaddy SVP of Productivity Apps Steven Aldrich: There is no one answer but rules of thumb. Free shipping if you have high-value products or unique products. Paid-for shipping for lower value items or big/bulky items. Customers need to feel that the transaction is fair or they won’t complete the purchase.

Endicia General Manager Amine Khechfe: Like it or not, free shipping is here to stay. We conducted a survey this past year on online shopping habits, and consumers listed free shipping not only as the biggest influencer when shopping online, but also as the most important shipping option and the aspect of ecommerce they’d most like to see improved in 2014.

But there are smart ways to do free shipping that minimize the impact on business revenue. For example, raising the minimum purchase amount to qualify for free shipping. Amazon did this over the holiday season – they raised their free shipping minimum from $25 to $35.

In the end, if you’re not doing free shipping, it’s time to at least experiment (consider weekly promotions, free shipping coupons, etc.). That way, you can better decide if the option works for your business.

StellaService CEO Jordy Leiser: Again, with selection and price equal, there has to be a differentiator. More often, free shipping is how retailers try to set themselves apart.

EcommerceBytes: What’s one thing online sellers may not know but should?

GoDaddy SVP of Productivity Apps Steven Aldrich: The deduction per mile driven in 2014 will be $0.56, down from $0.565 in 2013. Keep track of your miles using a mobile app like GoDaddy Bookkeeping when you drive for business (e.g., to the post office, to visit a supplier, to meet an advisor) so that you only pay your fair share of taxes.

Endicia General Manager Amine Khechfe: I think online sellers may not know about some of the perks being offered by USPS. For example, Flat Rate boxes are an amazing deal – you have no weight restrictions – the product just needs to fit in the box!

USPS has also risen to the challenge of international shipping by offering more sophisticated tracking to an expanding list of countries – not to mention providing some of the best possible rates.

StellaService CEO Jordy Leiser: Customer service is a revenue opportunity, not a cost suck.

What’s your contact center issue resolution rate? Are frustrated customers calling you after their question wasn’t solved in an email? Are you duplicating efforts?

Is your fulfillment provider meeting your service level agreement for packaging quality? Are you customers being delivered a tarnished representation of your brand?

The opportunity to save money, make money and look good exists within your customer service department.

This year we extended this feature to include the perspective of some sellers. See the interviews in Online Selling Trends Part One, “Rising Cost of Shipping Presents Challenge”; Part Two, “Standing Out in the Crowd,” and Part Three, “Fakes Spell Trouble for Vintage Goods.”

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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