Why You Should Include Shipping Costs In Product Prices

Online shopping continues to be incredibly popular. There is no end in sight for this trend. It is undeniable that being able to tap the screen a few times on a smartphone is the easiest and most convenient way to make purchases. However, not every online shopper is quick to click “buy”. Many are often hesitant to complete their purchases because of shipping costs. This is why it’s worthwhile to offer your online shoppers free shipping.

Naturally, many business owners are concerned about the impact to their bottom lines if they cover shipping costs themselves. This can be avoided by including shipping costs in product prices. By “hiding” your shipping costs through padding the costs of your items, you get to entice online shoppers with the word “free”.

“There’s a reason we’re drawn to words like ‘discount’ and ‘free,’” reports ChannelAdvisor.com, “Instead of weighing options equally in a traditional cost-benefit analysis, we fail to factor in the unspoken costs when products and services are free. This is called the zero price effect, or the irrational urge to get free stuff. Under this model, the free option always wins.”   

Free shipping helps to prevent cart abandonment.

Shoppers hate to go through their entire shopping experiences only to see seemingly out-of-nowhere charges appear at the checkout. By offering free shipping, you avoid the top reason for cart abandonment.

“Of the many reasons for cart abandonment, the shipping fee is among the biggest,” affirms Naveen Selvaraj on LateShipment.com, “It plays a crucial role in influencing consumers’ online purchasing behavior and decision making. The truth is that today’s customers don’t appreciate a separate cost being added to their products at checkout. In the Amazon era, customers are spoiled for choice by businesses offering free shipping and faster deliveries.”

Free shipping will drive online shoppers to your website.

We all can’t help but be attracted to the word “free”. When you include shipping costs in your product prices, you’re able to boldly promote that your e-commerce site offers free shipping. Selvaraj explains that the offering is a top-notch advertising strategy. He reports that 60% of e-commerce companies cite ‘free shipping with conditions’ as their most successful marketing tool.

“The reasons are obvious,” Selvaraj claims, “On the one hand, it satisfies customers’ need for free shipping and on the other it increases the Average Order Value (AOV) of purchases by motivating customers to meet the threshold for free shipping.”

Simply put, customers want free shipping.

“The margins are thin between consumers who prefer lower-cost shipping to free shipping,” reveals ChannelAdvisor.com, “According to a recent Shippo report, 49% of customers opt for lower cost shipping while 40% choose free shipping. (The remaining 11% just want their purchases fast.) Yet, when given the choice between free shipping and fast shipping, an overwhelming 83% prefer free.”

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