An average of 69.23% visits to eCommerce sites result in abandoned carts. Seven out of ten customers who find something they want to buy on your site, and take the trouble of adding it to their carts, stop there and never come back—why? If you could rescue even a quarter of those abandoned carts your store’s sales would increase by over 150%. Well, guess what? 61% of customers say that they would stick with their abandoned carts if one single thing about the checkout process was different.
It boils down to this: people don’t like nasty surprises, and they don’t like feeling like fools. Now, I know, neither you nor anybody else sets out to build an online store that does either of those things to your customers, but most sites do anyway.
61% of People said they Abandoned Carts because “Extra Costs” (shipping, taxes, or fees) were Too High.
I’ll bet this has happened to you. Say you’re shopping online for something like handmade, organic, naturally scented soap. You find an online store that has just what you’re looking for, add three bars of $7 soap to your cart, and head to the checkout page.
But what’s this? A field asking for your zip code before you can move on to payment? And when you fill it out, it happens: you see that the cheapest shipping method will add $10 to your $21 soap order.
You want to support handmade businesses, of course, but your $7 soap bars are suddenly $10.33 soap bars! And you know that you can probably find the same thing somewhere else that offers free shipping. So you leave the site, adding yours to the pile of abandoned carts.
Customers Expect Free Shipping
Years of experience shopping from big companies like Amazon have conditioned customers to expect that there will be at least one free shipping option for any purchase. It can be the slowest shipping method you have, but they want it to be an option. For the same reason, some customers also expect that shipping will be free if they spend a certain amount of money on a single order.
For small to medium sized handmade businesses where most orders are under $100, eating the cost of shipping sounds like a recipe for bankruptcy. However, the increase in sales from fewer abandoned carts needs to be part of the calculation. You’ll probably find that you come out ahead.
How to Get those Abandoned Carts Back
I mentioned earlier that the root issue here is that shipping & handling fees (and to a lesser extent, taxes) that don’t show up until the checkout page give your customers a bad surprise, and make them feel like fools for thinking that the total price of their cart would be the total cost of their order.
You can take three approaches to fix this:
1. Get Rid of the Surprise by Showing Shipping Charges Up Front
Instead of putting the “Calculate Shipping” feature on the checkout page, you can let people see shipping costs up front by putting a shipping calculator on every product page. Now of course this can’t be 100% accurate because you don’t know what else they might order, but by showing an estimated shipping cost, and estimated total cost, on the same page as the “Add to Cart” button gets the surprise over with.
2. Offer Free Shipping for Orders Above a Certain Amount
You can fix part of the problem by showing shipping costs earlier in the buying process, but even then a lot of people will still walk away unless they are presented with a truly free shipping option in addition to faster, “premium” shipping options.
A relatively painless way to offer that is to set a minimum purchase amount that will qualify an order for free shipping. What this price break should be for your business depends on your shipping costs and profit margins, but setting a minimum order amount lets you offer free shipping without spending a lot of time optimizing your shipping and handling process.
3. Adjust Your Pricing and Shipping to Make Free Shipping Possible for Every Order
Free shipping for orders over a certain amount is better than no free shipping at all, but some people still won’t buy because they don’t want, or need, to spend enough money to qualify for free shipping. The way to address everyone’s objections is to offer a free shipping option for all orders.
Making free shipping on all orders work for your business will require a balancing act:
- First, work with your carrier to make sure you are getting the best rates possible for given average daily volume and shipping methods that you use.
- Next, optimize your packaging to make it as small, light, and inexpensive as possible.
- Third, review your order fulfillment process to see if there are ways to make the process of picking inventory, packing it, and shipping it more efficient.
- Finally, after you’ve made your shipping and handling as inexpensive as possible, look at your shipping costs versus your profit margin and decide if you need, or want, to maintain your margins by increasing all of your prices across the board by a small amount. A 5% increase in prices won’t be noticed by most of your customers, and any sales lost due to it will be more than made up for by the increased sales that a free shipping option will bring.
Free Shipping is Here to Stay
Hopefully this article has shown you that you can implement free shipping on your site without kissing your profits goodbye. Your customers expect there to be a free shipping option on your website, and free shipping is the single most effective thing you can do to reduce abandoned carts. Sometimes the customer is always right!
Photo: BJs Shopping Carts, but Dan DeLuca.