Shipping free of charge to attract customers – a good strategy?
Certain web stores hit hard by shipping free of charge, while others charge shipping costs. But what is the best strategy?
Let us face the facts: users are not happy with shipping costs. But as a seller, should you bear those costs yourself? Opinions on this question are divided, as indicated by discussions that Twinklemagazine had with several web stores.
Wehkamp e.g. charges shipping costs (ranging from € 2.95 to € 24.95), and is convinced that customers understand the principle: they get an extra service and can determine themselves when their order will be delivered (during the day or in the evening). Even unpacking and connecting larger devices is included in the shipping costs. But Wehkamp sometimes uses shipping costs as a marketing tool by temporarily charging no shipping costs.
Other web stores send their orders entirely free of charge, like Conrad.nl, at least if the purchase amount exceeds 20 euros worth of electronic products and if the payment is made via iDeal. Conrad indeed prefers this payment method to payment orders/cards and credit cards, because administrative costs with iDeal are lower.
As for Impact Retail, a company that sells electronic products, it puts into practice both methods for both its web stores. On Bestfive.nl, a price slasher, shipping costs are charged. Modern.nl, that puts more emphasis on service, does not charge shipping costs. If the purchase amount exceeds € 70, an extra service is provided: not only is the device delivered at home, but it is also unpacked, installed and connected.
Not charging the shipping costs can thus be used as a marketing tool; its can also allow the customer not to be tempted too fast to approach a competitor. Besides, price comparison websites often mention shipping costs; lowering those costs could thus immediately represent a financial advantage over competitors to the web store that would lower those costs.
That being said, no matter if you charge shipping costs or not, the important thing is that you clearly state it on your site. Numerous web stores bring up shipping costs only at the end of the ordering process, and for a lot of consumers, this is a reason not to complete their order. And if you choose to charge shipping costs, keep them as simple as possible – having to make complex calculations scare customers away. If the costs that you charge are lower than those charged by your competitors, or if you charge no shipping costs at all, use this selling point and state it clearly on your site.