Shipping Strategies for U.S. Shopify Merchants #2: Free Shipping
Should you offer free shipping?
A well-crafted shipping strategyāincluding clear pricing and shipping rules at checkoutāis essential to the success of any e-commerce store. Merchants of all sizes, from small businesses to enterprise brands, must carefully balance customer expectations, such as the widespread demand for free shipping, with their own operational cost constraints. This article explores how Shopify merchants in the U.S. handle domestic shipping, with a particular focus on the implementation of free shipping strategies.
Free Shipping
Free shipping is highly appealing to customers and has become āessential for retailers to provideā in many casesā. Shopify merchants often offer free shipping to reduce cart abandonment and stay competitive. This can be done in two ways: unconditional free shipping on all orders (more common for high-margin or enterprise retailers) or conditional free shipping based on a minimum cart value (the far more common approach). The conditional approach usually sets a threshold just above the average order value ā for example, āFree U.S. Shipping on orders over $50ā ā to encourage larger baskets. In fact, Shopify notes that āthe most common strategy for offering free shipping over a certain amountā is to determine your average order value and then offer free shipping on orders that exceed that amount by a small percentageā. This tactic can effectively raise the average order size while meeting customer expectations (a win-win strategy)
Customer Expectations
A major driver for free shipping is consumer demand. Surveys show 62% of U.S. shoppers will not even consider purchasing if a site doesnāt offer free shippingā. In total, about 97% of shoppers either require or strongly prefer free shipping, with only 3% saying shipping cost ādoesnāt matterāā. Moreover, 80% of consumers expect free shipping when their order exceeds a certain dollar amount, and 66% even expect unconditional free shipping on all ordersā. Given these expectations, Shopify merchants feel pressure to include a free shipping option in their domestic strategy. Many smaller merchants use a banner or announcement bar (often via an app) to advertise free shipping thresholds (e.g. āFree shipping on orders over $50ā) throughout the shopping journey, since transparent shipping costs can reduce cart abandonmentā.
Implementation
Because āfreeā shipping isnāt truly free for the merchant, businesses must account for that cost. Common approaches include slightly increasing product prices to absorb shipping expenses or treating shipping as a marketing cost. Shopifyās guidance suggests factoring shipping costs into product pricing if free shipping is a āmust-haveā in your nicheā. Many merchants also use free shipping strategically: for example, running free shipping as a limited-time promotion during slow seasons or holidays instead of year-roundā. This way, they can advertise āFree Shippingā to boost sales without permanently shouldering the expense.
Notes
Itās worth noting that free shipping is especially common in certain categories: for instance, apparel and fashion merchants frequently offer free shipping (often with a modest threshold) due to high competition and relatively low shipping costs per item. On the other hand, stores selling very heavy or low-margin products may be less able to offer free shipping across the board. In those cases, they might opt for flat or calculated rates for standard delivery, using free shipping only for high-value orders or not at all (more on category differences later).
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