Total Retail | Will Free Shipping Boost E-Commerce Sales Enough to Be Profitable?
by Mitchell Nikitin, CEO & co-founder, Via.Delivery | February 7, 2022
Offering free shipping will almost certainly increase total sales. But will absorbing the costs of that free shipping eat away too much at profits? Finding the right shipping strategy — one that's both attractive to customers and profitable — takes careful calculation and testing.
While consumers want (or expect) to have their purchases sent to them at no cost, e-tailers know someone has to cover shipping costs. Therefore, they must determine whether subsidizing shipping is profitable. Doing so requires testing and exploring low-cost delivery options. It's easier to subsidize shipping when the cost of shipping is low to begin with. Therefore, e-tailers may want to explore different options for reducing shipping costs.
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