eCommerce Explained

The Benefit of Offering Free Shipping and How to Calculate your Free Shipping Threshold

November 16, 2020
eCommerce Explained
The Benefit of Offering Free Shipping and How to Calculate your Free Shipping Threshold
Chapters
eCommerce Explained
The Benefit of Offering Free Shipping and How to Calculate your Free Shipping Threshold
Nov 16, 2020

South African online shoppers expect free delivery to be offered on your website for orders over a certain value. But how do you work out the right value to use?

I've seen many online stores offering free shipping at points where I'm certain they're losing money, I know because I've made that mistake myself!

So in order to work this out, you need these two metrics:

  1. Your average cost per delivery
  2. Your average gross profit percentage

Your average cost per delivery is worked out by taking your courier bill from any given month and dividing it by the number of orders you sent out through that month. Your average gross profit can be pulled from your financial records or, if you're just starting out then you can look at the gross profits on offer from your suppliers by looking at their wholesale price sheets.

To learn how to put this into practice and calculate the correct free shipping value for your site, listen to this podcast episode right to the end.

If you have any questions or feedback, hit me up in the free Insaka community on Facebook.


Warrick

Show Notes

South African online shoppers expect free delivery to be offered on your website for orders over a certain value. But how do you work out the right value to use?

I've seen many online stores offering free shipping at points where I'm certain they're losing money, I know because I've made that mistake myself!

So in order to work this out, you need these two metrics:

  1. Your average cost per delivery
  2. Your average gross profit percentage

Your average cost per delivery is worked out by taking your courier bill from any given month and dividing it by the number of orders you sent out through that month. Your average gross profit can be pulled from your financial records or, if you're just starting out then you can look at the gross profits on offer from your suppliers by looking at their wholesale price sheets.

To learn how to put this into practice and calculate the correct free shipping value for your site, listen to this podcast episode right to the end.

If you have any questions or feedback, hit me up in the free Insaka community on Facebook.


Warrick