In this article, we’ll be going over a topic that many people tend to ask a lot and that is “What is a retail offer and a free plus shipping offer?” and “Which one should you be using?”.
So, what we’ve done is we have outlined a few of the different points in those two types of e-commerce offers and how each one of them works.
Let’s get right into it.
Alright, so when it comes to e-commerce and dropshipping, generally, there are two main different types of offers, retail and free plus shipping.
You may have already heard about them, but we’ll cover some of the reasons why you should use both of them and test them out to see which one works better for your online business.
What is a Free Plus Shipping Offer in eCommerce?
When it comes to free plus shipping, it’s basically where you advertise your e-commerce products for free and charge the customer only for shipping and handling and make the profit from whatever you’re charging for the shipping.
In general, people aren’t as used to making purchases with free plus shipping offers as much as with retail offers because sometimes, they’re a little bit sceptical asking themselves, “what’s wrong with this product?“, “why am I getting it for free?“, “why are they only charging for the shipping?” etc., however, it is something that is still being used by numerous e-commerce and dropshipping businesses.
Free plus shipping actually started and was heavily used by infomercials, the main reasons behind were its profitability and the fact that it brought a lot of customers through the door.
So, from the e-commerce business’s perspective, free plus shipping offers can oftentimes bring a lot of people to visit your website and get used to seeing your products and services.
Then, this allows the business owner to collect customer data and what we mean by ‘customer data’ is simply collecting customer’s email, demographics, age, and other analytical metrics that are crucial to any online business.
Also, the other reason why this is so valuable is that once you collect the email, you have the opportunity to incentivize the customers by giving them a free plus shipping offer, then offer them other products and services from your website.
So, even if a customer does not make a purchase on their first visit, you have the ability to remarket to them which may end up being even more profitable than just selling one free plus shipping offer.
Just a piece of advice, when it comes to your storefront, you want to make sure that you keep free plus shipping offers hidden and not advertising your entire products with this type of offer.
There main reason to it is that it may evaluate your e-commerce brand.
When customers come in and see that your entire business is run by free plus shipping offers, they might wonder how your business is running on just free items and start doubting possible scams, defects, etc.
Usually, the biggest reason for using a free plus shipping offer is to encourage customers to take action by giving them something special that will make them feel being valued among the crowd.
What is a Retail Offer in eCommerce?
Now, let’s move onto retail offers.
The retail offer is the most commonly used type of advertising method used by the majority of e-commerce businesses.
Some examples of the retail offers include get 50% during a specific period, buy one get one free, buy one and get the next item for half its price, and others along the line.
Almost every single e-commerce sites and businesses use this type of offer whereas with the free plus shipping offer, you don’t really see bigger companies run this type of offer at all.
Again, what matters the most to you is to make sure that you website and your business is being considered as one of the big websites that other people are buying from.
Now, what are some of the benefits of running retail offers over free plus shipping offers?
First, it gives the online store more overall credibility.
When customers come into the website, they see products and services being advertised as usual with their actual prices.
Second, it’s more profitable.
Usually, retail offers end up being a lot more profitable because you’re charging a lot than you are with free plus shipping offers.
This is because, with free plus shipping offers, you can only mark up the price as high as $15 so to speak, no one really expects to pay more than this value just for shipping (they usually don’t like paying for shipping at the first place!).
On the other hand, with retail offers, you can mark up the price of the product as much as you want, obviously, taking market value as well as your competitors into consideration.
Which One Should You Use?
When it comes to the “which one of the two should I use?” type of question, you need to consider their pros and cons.
You can find tonnes of advice on the Internet, however, there’s really no certain answer to it.
Everyone is different, every store is unique, every product varies in size, price, and demand, and unless you actually try them out yourself, it’ll take some time to get the answer you’re looking for.
The advertising budget doesn’t have to be huge, try to keep things small and simple at the start, then focus working on what works the best for your business.
