Fast vs Free Shipping: Which Shipping Option is Right For Your Business

By Oleg Mikhailenko
Published in Problem
March 11, 2022
4 min read
Fast vs Free Shipping: Which Shipping Option is Right For Your Business

The question of free vs. fast shipping is one on every e-commerce merchant’s mind. After all, we live in a post-Amazon world, where customers are used to free 2-day shipping no matter where they are or what they happen to be ordering. That’s all very well and good if you’re a marketplace juggernaut like Amazon is, but for most business owners who aren’t Jeff Bezos, the idea of committing to the cost of shipping everything within two days, all for free, makes them weak in the knees.

Many merchants ask themselves lots of questions about fast and free shipping. Which is better, first off, if you can only choose one? Why would someone pay more for fast shipping for their business? What’s the fastest shipping method that’s still cost effective? Which different shipping methods are available? And most importantly, how do you get free shipping for your business? Let’s discuss the facts individually, and then bring them all together to see how you can make the best possible decision for your company.

Free vs. fast shipping

The data doesn’t lie: companies running online stores which offer both free and fast shipping tend to come out on top. The top reason would-be customers abandoned their shopping carts in 2019 was due to prohibitively-high shipping costs. But then, in a world after Amazon, most customers believe that anything that’s not 2-day free shipping is prohibitively expensive. A recent study found that up to 75% of customers expect shipping for online orders these days to be completely free, and a further 39% want the aforementioned free shipping to be delivered within two days. Meanwhile, another study discovered that 59% of customers say that free shipping is key to a positive online experience, while 40% insist on fast delivery. The “Amazon effect” has clearly taken the e-commerce industry by storm, but since most of us aren’t Amazon, business owners are forced to look for other solutions to ship simply.

Shipping vs. delivery?

Customers not only demand fast shipping, which means the product is dispatched as quickly as possible, they also demand fast delivery, meaning that the product arrives on their doorstep in just a few short days. Offering one means very little if you don’t have the other on lock, since delay in either the fulfillment and dispatching process or the actual delivery process means that the customer is waiting precious extra hours or even days for their goods to arrive. Today’s buyers don’t frequently have that sort of patience! What’s an e-commerce merchant to do in this tough selling climate so that their loyal customers don’t begin shopping around with competitors?

How to offer free shipping

Since the vast majority of customers expect free shipping for all their online orders, we’ll look at this first. One of the simplest options is to offer free shipping for all purchases over a minimum value. If the average order price for your site is 40 dollars, for instance, you might encourage your customer to spend a little more by offering free shipping for every order over 50 dollars. This ensures that you don’t have to eat the cost of shipping for orders without a profit margin high enough to justify it and gives your customer the choice of either spending a little bit more or footing the cost of shipping themselves. Alternatively, you could solve your problem by offering free shipping only for the economy option. Customers who want their orders to arrive sooner would have to choose a different shipping option and pay a premium for expedited shipping. The fastest shipping option would cost several dollars more, but arrive within that 2-day window.

How to offer fast shipping

Shopping sites which offer fast shipping are considered by customers to be a cut above the rest. Gone are the days where a standard shipping time of 6-8 weeks or even 7 days is acceptable. Now it’s 2-day delivery or bust. Thankfully, you have options. Much like free shipping, you can choose to offer fast shipping either with minimum purchase or as an optional upgrade during the checkout process. If customers need their goods on the double, they can have them for only a few dollars more. However, you can also utilize the services of third-party logistics companies who have warehouses all across the US. By dividing your inventory between these warehouses, you can avoid the time sink of having your products shipped out from only a single place, which could be hundreds of miles away from their final destination.

In conclusion

Every business, customer base, and set of circumstances is totally different. Although it’s evident that offering both free and fast shipping is superior to other options, if it’s really necessary to only offer one, there are a variety of options available for you to choose from. If you’re truly having issues deciding, you can always try both, and see which garners a more positive customer response. The answer should pop out at you after a bit of experimentation, and then it’s up to you if you want to incorporate the cost. However, don’t get too wrapped up in this dichotomy - through hyperfocusing on this one question, you can miss other matters that are just as integral to customer satisfaction and scaling your business, such as brand communication, responsive customer service, and delivering a high quality product.

Whether you decide to offer free shipping, fast shipping, or both to your customer base, we here at P2Pseller wish you the best of luck in smashing goals and delivering an incredibly positive experience for your buyers. We’re sure that with just a little bit of research and determination, you can make your business truly awesome.


Tags

#fast#free#service#delivery#shipping#free#stores#online
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Oleg Mikhailenko

Co-Founder, CEO P2Pseller

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