Shipping Promotions for E-Commerce

2 comments

Recently I was studying a client’s competition, reading industry forums and gathering insight into how to generate more website sales. During my research, I noticed something really interesting about how people react to different shipping promotions.

First I read a number of forum posts where people were thrilled with a competitor’s shipping promotion that offered $4.95 flat shipping rate regardless of order size. A few posted comments mentioned how individuals would buy more higher volumes of product to lower the “per product shipping cost.” What was surprising is that many of these people preferred the flat rate shipping over other free shipping promotions that included conditions like free shipping over $25. In reality, the free shipping with conditions offered greater financial benefit over the flat rate, especially on higher volume orders. Yet psychologically, people somehow associated a better deal with the flat rate.

Secondly, I discovered that although shipping costs were important (the lower the better), the SPEED of delivery appeared even more important. I have noticed with my client’s sales, that a number of customers will decline free standard ground shipping and pay up to 25% – 30% of the product cost in shipping charges just to get the products a few days faster!
If you can offer “fast and free shipping” as a value proposition, my guess is that you will experience an increase in website conversion.

About the Author

Kevin Gold is Director of Internet Marketing at iNET Interactive, a social media company operating prominent online communities for technology professionals and technology enthusiasts. Kevin is a frequent contributing author to multiple publications including Search Marketing Standard, Practical eCommerce, DIRECT, Entrepreneur.com, ConversionChronicles.com, About.com, and On Target (Yahoo! Search Marketing newsletter).

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2 Comments

  1. Kevin, nice to see an example from a real client. I find it surprising that people would not see the financial benefit in choosing free shipping with conditions, but perhaps the average customer felt they would be ordering less than $25 worth of products? As far as the second example goes, I wonder if you think that sometimes the reason that people respond to the faster shipping scenario versus free, but slower, shipping is tied to an impulse online buy? In other words, if you have decided on the spur of the moment to purchase something that you might not otherwise have bought, you likewise want to have it delivered as soon as possible and thus cost is not the prime motivating factor?

  2. I have written an article on a similar vein and I'd say your guess is no longer a guess but a reality when it comes to shipping issues. People generally abandon their shopping carts halfway when they see very high shipping costs, and get encouraged when they see that it's free. Shipping cost is one of the top reasons why people buy so if merchants have resolved this issue then they will experience an increase in their conversion rate.