Free delivery gets people to buy more when done right. When poorly executed, it eats profits. How can you ensure free delivery builds your profits more than charging for delivery?
The most popular method by big retailers is free shipping for a minimum order value (MOV). Offer free shipping above an order total.Shopify Conversion Rate Optimization
Before you use the tool, read the pricing section of my book quoted to know if a MOV can work for your store.
The tool calculates the profit of your online store based on revenue, margin, and shipping charges. Use it to calculate how your delivery charges affect profit. Sometimes free shipping is not always the best option because you need increased order volume and average order value to cover the cost absorption.
Play around with the “average shipping cost to customer”, “total orders”, and “average order value” within reason. If you decrease the shipping cost to customer, assume a slight increase in total orders. Copy-and-paste the values in a document then repeat with different values to get a feel for your ideal shipping cost strategy.
Enter Your Online Store Information
Your Calculated Results
|Gross Profit (?What is gross profit? Also known as gross income or sales profit. It is revenue minus the cost of goods sold. It does not include fixed costs such as labor outside of production, advertising, and insurance.)||–|
|Total Shipping Cost to Customers||–|
|Total Shipping Cost to Store||–|
|Net Profit (?What is net profit? Your ultimate bottom line. It is the measure of profit after all costs.)||–|
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