Enterprise Ecommerce / How to Sell Online

How to Increase Your Average Order Value With Free Shipping

Mitchell Harper / 1 min read

If you don’t offer free shipping from your online store then you’re missing out on a substantial amount of revenue. While you might initially think that offering free shipping will erode most or even all of the profit in the order, I can tell you that it wont — if you use a simple strategy.

Using free shipping as a motivator for customers to buy from you can help increase your average order value by up to 30% in just a few short months. You simply need to work out your average order value and average shipping cost, and then offer free shipping on your average order value + 10%, or whichever amount covers your average shipping cost and provides enough of a profit to slightly increase your average order value.

If you repeat this process every 3-4 weeks, your average order value will increase by 30% or more in just a few months. The basic idea here is that a certain percentage of your customers will be willing to spend more with you on each transaction in order to “trigger” the free shipping option you setup. This creates a win-win situation: your customers get free shipping and you increase your average order value resulting in a better bottom line for your business.

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Mitchell Harper

Mitchell Harper

Mitch is the co-founder of Bigcommerce. He loves helping small businesses succeed through the use of simple software and regularly keynotes on topics including e-commerce, entrepreneurship, Saas and mostly importantly, how to build a great company culture. Today he runs the company alongside co-founder Eddie and our 300+ person team with offices in Sydney, San Francisco and Austin. He can be emailed at mitch@bigcommerce.com

View all posts by Mitchell Harper
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