If you are a small online retailer, you may be feeling the pinch of competing with free or overnight shipping. Huge companies like Amazon keep pushing the envelope with some products even available for delivery the same day they’re ordered. How does a small e-commerce retailer compete with that?
In our new online landscape, even waiting 3 to 5 days for a delivery can seem like an eternity. But as a small retailer, can you justify charging for overnight shipping particularly when today’s consumers are showing that they are not willing to pay for them?
Current Consumer Expectations
With the advent of large retailers offering free and overnight shipping, the expectations of the average consumer have changed. Often, customers won’t purchase something if it has a delivery fee associated with it or if they can’t get it the next day. In fact, CNBC conducted a survey that found that 43 percent of people felt that the most important aspect of shopping online was free shipping.
Prime is a Paid Membership
When it comes to Amazon, Prime membership is how consumers pay for their fast delivery. But that is out-of-sight, out-of-mind at each point of sale. Consequently, shoppers don’t realize that they are, in fact, paying for their faster deliveries to some degree.
The Struggle is Real for Smaller Retailers
In the shadow of the large retailers, independent online retailers are struggling to compete with next-day deliveries, especially at any semblance of a reasonable cost. If you offer products that are unique and not available from the big retailers, you’re in luck. Most people don’t mind waiting a few days for a product that is unique or customized. But if that isn’t the case, you will want to strategize on how you can offer free shipping for the goods that you sell online.
Consider Your Marketing Advantages
There are some important aspects of offering free shipping that you may want to consider. By offering free or overnight shipping, you can reduce shopping cart abandonment, increase your online conversions and build your customer and brand loyalty. That can be worth its weight in gold.
Although you may be reluctant to bite into this piece of your profits, providing next-day or free shipping is a way to entice new customers. Your profitability may suffer short term, but your marketing advantages could offset it ten-fold and lead to an expanded customer base. And considering that next-day and free shipping will soon be the new standard, it will be a good way to stay ahead of the curve.
Some Options
But the cost may not be something you want to absorb. In that case, there are three options you may want to consider.
- Include shipping costs in the price of your products.
- Institute a minimum spending threshold in order to get free shipping.
- Take a recurring fee or implement a loyalty program (such as Amazon Prime) in exchange for free shipping.
When you have shipping questions, we have answers. If you need any shipping assistance, we are always here to help at Philadelphia Mailroom. Call us at (215) 745-1100.