When Free Shipping Lowers Perceived Value.
Free shipping can be a great way to increase your conversions but can leave your customers questioning product value if you’re selling fragile or oversized items. It’s important to remember that a large piece of what goes into the shipping price is the size and weight of the item being shipped, along with how far the parcel has to travel to arrive at its destination.
When implementing a ‘free’ shipping strategy, the shipping cost is offset within the product price; your customers are paying for shipping, they just don’t know it. Recently, I was shopping online for shelving and came across a $190 shelf that had negative reviews taking shots at how poor the quality was for its nearly $200 price tag.
“Just disappointed in the quality of the product for the price…For nearly a $200 shelf, you’d think it would be better quality.”
While the seller was trying to incentivize sales with free shipping, they inadvertently encouraged their customers to look at the value they offer in a different light.
If we break this scenario down, the shipping cost for a 15-pound shelf that measures nearly 3×3 feet tall when assembled and features metal pipes to secure it to the wall is going be quite costly. When we add in the variable that ‘free’ shipping is offered on the item throughout Canada, the seller must include rural and remote zones into their average shipping cost. ‘Free’ shipping is a psychological trick which the seller used to incentivize the sale, but it’s within reason to assume that they are offsetting up to $75 of shipping into the price of the shelf, a 40% additional markup on the item.
The Intuitive Way
Oversized items are charged the exact shipping cost at checkout, while general items fit a ‘general’ profile and are charged a flat shipping rate. Remember, when free shipping lowers perceived value, you increase the likelihood of dropped carts or a loss in profit. The ‘general’ profile ensures a fair shipping price across your range of products and helps eliminate losing money due to shipping costs.
The Right Tools
Depending on whether the oversized items are a uniform size and weight, Shopify’s built-in checkout shipping calculation options could suffice. You would set up two shipping profiles, one that calculates using live rates, and the other charges a flat rate. The problem with this method is that it can increase abandoned carts since your customers may be surprised at seeing a shipping charge at checkout when an oversized item is in the cart.
To set expectations during checkout and provide context, you could use Intuitive Shipping to assign a custom shipping note at checkout, informing customers that oversized items are charged exact live rates. A bonus? If your oversized items are not of uniform size and weight, you can also take advantage of our SmartBoxingTM feature to ensure accurate live rates are displayed.