Free shipping has become more than just a perk—it’s often the deciding factor for customers choosing between two online stores. Research shows that shoppers are more likely to complete a purchase when free shipping is offered, even if the product price is slightly higher. For businesses, this means that free shipping isn’t just a cost—it’s a powerful tool to attract and retain customers when used strategically.
Set Minimum Order Thresholds
Offering free shipping on orders above a certain amount helps offset shipping costs while encouraging larger purchases. For example, setting a $50 minimum can increase average order value and keep margins healthy.
Limit Free Shipping to Standard Delivery
To avoid excessive costs, restrict free shipping to standard delivery while still offering customers paid options for expedited services. Carriers like UPS, FedEx, USPS, and DHL provide multiple service tiers, allowing businesses to balance affordability with customer choice.
Use Free Shipping as a Promotional Tool
Free shipping promotions during holidays, product launches, or clearance events can boost sales and help clear out inventory. When combined with marketing campaigns, these offers create urgency and drive conversions.
Incorporate Shipping Costs Into Pricing
Rather than absorbing the full expense, businesses can factor a portion of shipping costs into product prices. This keeps “free shipping” appealing to customers while maintaining profitability.
Leverage Fulfillment Centers and 3PLs
Third-party logistics providers (3PLs) and fulfillment centers allow businesses to store inventory closer to customers, reducing zone-based shipping costs. This makes offering free shipping more feasible, even for two-day delivery.
Cut Supply Costs with Cashback Savings
Reducing overhead on packaging supplies helps offset the cost of free shipping. Many businesses save money by earning cashback with a Staples gift card or getting rewards with an Office Depot gift card through Fluz. Pairing these savings with negotiated carrier rates makes free shipping sustainable long term.
Final Thoughts
Free shipping is a competitive advantage when used strategically. By setting order minimums, choosing the right carriers, and cutting costs through cashback and fulfillment strategies, businesses can offer customers what they want without sacrificing profits.
