Shipping Promotions That Drive More Sales

Written by  October 27, 2007

As many of you already know, I constantly reinforce testing being the key to much success.

Recently, I tested out several shipping methods between a number of client sites. The objective was to find out which promotion had the best impact on sales.

The benefit of my testing it across multiple sites was that I got a better sampling and thus truer picture of what really had the biggest impact on sales.

Together, these sites combined for a great sampling with a unique monthly visitor count of well over 19,000 during the two month testing period.

So, what type of shipping promotions were tested?

  1. Flat rate shipping on anything ordered. “One Price. Unlimited Items.”
  2. Flat rate shipping combined with “Rush / Overnight Shipping”
  3. Free Shipping on orders amounts over certain amount
  4. Free Shipping on everything in stock
  5. Free Shipping combined with Rush / Overnight Shipping
  6. Real-Time Shipping quotes from various carriers

Each of these were rotated over a weeks time across the sites.

Depending on the amount of traffic your site receives, you may need to run test longer to get a proper sampling. Generally, the more traffic you get to a site, the shorter time it takes to test and gather results. Just make sure your margin of error is large enough to warrant a “winner”.

And the winner is …

After testing, the hands down winner that had the best impact on sales was offering Free Shipping for orders over a certain amount. In fact, offering Free Priority Mail shipping for all orders over a certain amount produced even better results – even when the price of the product was increased to cover that margin.

Yes, it’s true, you heard me right. Offering free shipping while at the same time increasing the price of certain products to cover that shipping cost still resulted in an increase in sales.

What is one thing all shoppers want?

No, it’s not a trick question. Ok, I’ll tell you. They want their product fast, and they want it free.

Wouldn’t you?

So, playing on that psychological thinking, the following terminology was tested when offering Free Priority Mail shipping on orders over a certain amount. When added, it too had an almost instant impact on sales.

“Get it Fast. Get it FREE!”

How can this be?

Free Shipping has a powerful psychological impact on online buyers. This can be especially true if your product can be found at a “local brick and mortar store.”

The testing revealed that in some cases, online buyers will even overlook the price of an item to get free shipping. This of course will vary between buyers and industries (more price conscience buyers in industries with “common” products can be “price sensitive” when making buying decisions) however, the overall consensus remains the same.

Free Shipping works and oftentimes is even expected as an option by online buyers. If you’re not offering it to your buyers, you should start.

The impact on sales summarized

Why Free Shipping with conditions (for orders over a certain amount?)

Well, free shipping alone is nice – and works. Free shipping for orders over a certain amount can achieve two things:

  1. Increases the number of overall sales from a store
  2. Increases the Average Order Value

Both of the above cause growth in your company while at the same time satisfying your customer wants and needs.

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Comments

2 Responses to “Shipping Promotions That Drive More Sales”

  1. Carpet Protection by Plasticover on October 28th, 2007 9:24 pm

    Another great post…thank you for your continued contributions.

    I totally agree with your approach and conclusion, but the problem is the ups post office is simply not guaranteed and not time-definite. We had several boxes vanish in route to important customers and the post office could not do anything for us. They had no real tracking on them and they showed up 3-4 weeks late with no explanation and no refund.

    We’ve vowed not to ship with them again and have had a great experience with FedEx. However, to replicate a 2-3 day experience like this, we are into air shipments which are way too expensive for our products.

    Not sure there is a solution here, but if you have recommendations we are all ears. I just wanted to share that USPS is not a real option in my opinion for a business that needs to do a high volume of sales and can’t tolerate problem shipments.

  2. econcepts on October 28th, 2007 9:51 pm

    Yes, I have also heard some stories with USPS as such. The preference of shipping is best chosen by the company who runs the site and it does not have to be USPS to work.

    The important thing to consider here is that even if it is not “priority” shipping, you should still consider offering free shipping for orders over a certain amount when looking for a promotion that will help boost sales.

    🙂

    I currently run this same promotion with UPS on another site I work with, and have had equally great success with it. That type of overnight / priority shipping certainly would work better for items with higher profit margins.

    Again however, the real key is to get the offer for free shipping of ANY kind for orders that exceed the amount you feel will drive your business forward and make your customers buy.

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