Entrepreneurs across the globe are taking advantage of a new niche of ecommerce known as ‘free plus shipping’. The free plus shipping method can be very lucrative for businesses, and it’s a great way to sell high-quality merchandise to your customers at an affordable price point.
We’ve created this article to guide you through everything that you’ll need to know about free plus shipping businesses. At the end of this article you’ll be well equipped to start your own ecommerce store using the free plus shipping business method, and you’ll be ready to start generating profit today.
Let’s get started.
What Is a Free Plus Shipping Business?
A free plus shipping business is an ecommerce store which sells products for $0.00, and only charges customers the shipping fees.
You may be asking yourself: ‘Wait, how can you make any money from this business model?’
Ecommerce entrepreneurs who are running their store with a free plus shipping business model generate profit by inflating their shipping prices. This is done to cover the cost of the product which they’re selling.
If a regular ecommerce store is going to sell a product for $5, they will likely add an additional $2.50 for shipping. On the other hand, a free plus shipping store will simply sell the product for free, but increase the shipping fees to $7.50. This means that both ecommerce businesses generated $7.50 in revenue.
As you can see, the free plus shipping method is a clever tactic which ecommerce entrepreneurs can use to add instant appeal to their products, and let’s be honest, who doesn’t like free stuff?
Why Should I Start a Free Plus Shipping Business?
It doesn’t matter whether you’re an ecommerce veteran, or if you’re just starting your ecommerce journey, the free plus shipping business model is a great way to run your store. It’s relatively simple to set up a free plus shipping store, and when it’s up and running you’ll be able to select a wide variety of products to add to your store.
Your customers will be delighted by the prospect of free products, especially if they’re interested in them, which will make paying for the shipping fees seem like a bargain.
What Can I Sell With My Free Plus Shipping Business?
When you’re starting your own free plus shipping business you’ll need to take some time to consider which products you’ll be selling. As you’ll be relying on your shipping fees to generate profit, you’ll need to find the perfect price point for the products which you source. This does bring some limitations to the products which you can choose for your store’s inventory.
If you decide to source cheap products for your free plus shipping store then you’ll make a smaller profit margin when you actually make a sale. On the other hand, customers may be wary about paying large shipping fees to cover the cost of the more expensive products in your store. As an example, some of your customers may be skeptical if you’re offering high-value electronic goods, like a camera, for free, and you’re then charging $50 for shipping.
In light of this, we recommend that you stick to sourcing products which range from $4-$10 when you’re deciding on the inventory of your free plus shipping store. When you source products in this price range you’ll still receive a large profit margin, which is great for your ecommerce business.
How Can I Start a Free Plus Shipping Business?
If you’re looking to start your own free plus shipping business then we’d recommend that you create your store using Shopify. Shopify is one of the most popular ecommerce platforms, and is already trusted by thousands of ecommerce entrepreneurs from all over the globe. Their tool is simple to use, and Shopify will provide you with helpful tips and guides during the store creation process.
Shopify’s platform is perfect for businesses at all growth stages. It doesn’t matter if you’re making 1000 sales per day, or if you’ve just started your store, Shopify is tailored to make life easier for you as an entrepreneur.
We’ve created an in-depth guide which shows you how you can create and launch your own Shopify store in less than 30 minutes, check it out here.
Running a Free Plus Shipping Business With Dropshipping
When you’re running a free plus shipping business it’s critical that you ensure your profit margins are as large as possible. As you’ll be relying on shipping fees to make your profits, you’ll need to be careful with the resources that you spend to run your ecommerce business. One of the biggest worries for ecommerce entrepreneurs is managing their store’s inventory, especially if they’re running their business on a budget. It’s likely that they’ll need to spend some of their valuable resources on storage space, which takes up funds that could have been spent trying to make more sales. Let’s take a look at an example to understand free plus shipping along with dropshipping. If the price of a product is $5, the supplier will offer the product at $0.0 and charge $5 as the shipping price. So, the customer still pays the same price that they would otherwise be paying.
We believe that the easiest and most cost efficient way to run your free plus shipping store is to take advantage of dropshipping. Dropshipping will allow you to sell products from your ecommerce store without ever carrying any inventory. Instead, when you receive an order you’ll simply contact the supplier, who will then ship their product directly from their warehouse to your customer’s door. Dropshipping is perfect for ecommerce entrepreneurs who don’t want to be tied down by their store’s inventory, and it can help you achieve the entrepreneurial life you’ve always dreamt of.
Oberlo is the leading platform for dropshipping. Our tool is available on Shopify’s App Store, which means that you’ll be able to incorporate dropshipping to your store with ease. Simply install Oberlo’s app onto your existing free plus shipping store and you’ll be able to dropship the same day.
When you use Oberlo you’ll have access to a wide range of products which you’ll be able to add to your store with just a few clicks. Our tool makes it even easier to be successful with your free plus shipping business–you’ll never need to carry any inventory, and you’ll be able to focus on making sales.
Marketing Your Free Plus Shipping Business
It’s unlikely that you’ll generate a huge volume of traffic to your store from the day you launch, so you’ll need to create some marketing campaigns to draw potential customers to your store.
There are a variety of different marketing channels which ecommerce entrepreneurs can use to grow their store. If you select marketing channels which have a quick feedback loop, like Facebook advertising or Google Adwords, you’ll be able to review the results of your marketing campaigns quickly. Receiving the results of your campaigns quickly will help you understand what you need to improve, and which marketing channels you need to focus on. If you see that you receive much better results with Facebook marketing then focus your efforts and budgets onto this channel. If Google Adwords provide more successful results then you can focus on these campaigns. Be fluid with your decisions and make decisions which have been informed by your data.
Take a look through the different marketing channels which are at your disposal as an ecommerce entrepreneur, and think about how you can maximize the amount of traffic you generate. Remember to keep testing, as you’ll soon find out which marketing strategies work best for your business. There isn’t an exact method for success with marketing–you’ll need to find what works best for your business through as you work.
Pros and Cons of Free Plus Shipping
The free plus shipping model can work wonders if you do it right. Let’s take a look at all the advantages that you can gain from offering free plus shipping at your Shopify store.
- One of the main benefits of using the free plus shipping model is that you get to use the magic word “FREE”. The word “FREE” attracts instant attention and gets people hooked. The psychology behind the success of a free plus shipping offer isn’t a surprise- free products excite customers!
- If you market through the right channels, for instance through Facebook, you might be able to reach a much larger audience who can get to know about your store and the products you are offering. Your marketing efforts will hugely benefit from the use of the term “FREE”.
- If you offer free plus shipping along with dropshipping, you also don’t need to worry about the issue of managing or storing inventory.
- A free plus shipping offer is a great way to attract new customers. They see it as a risk-free opportunity and are more likely to make the purchase.
But what about the downside to free plus shipping? Let’s go over some things to keep in mind:
- You need to know your numbers well. This means that you need to keep track of how much you’re spending on your products, as you’ll eventually have to add that cost to the cost of shipping. So, you can’t afford to overlook the costs of marketing campaigns as well. That’s why for free plus shipping to work out in your favor, you need to calculate all the costs that are included in the free plus shipping funnel.
- It’s more of a short term strategy. The free plus shipping model works best in the short run because of the limited profit margins that you can’t rely on in the long term.
- The free plus shipping model is best suited for products that are not too expensive. For instance, it wouldn’t make sense to offer a product for free and then add $32 as the shipping costs. Customers might lose trust in you as a brand. So, you need to find a balance between your free plus shipping model and your customers expectations.
- If you plan to offer free plus shipping without dropshipping the products, your upfront costs will be higher.
- You need to have a long term vision in mind if you want your business to run with a free plus shipping model. If you rely completely on free plus shipping, you might find it hard to have repeat customers and brand loyalty in the long term.
If you’re also interested in getting to know about the pros and cons of free shipping, we’ve got you covered here.
Start Your Free Plus Shipping Business Today
Now you know everything you need to start your own free plus shipping business–congratulations! You’re ready to start making sales and generating revenue.
We just have one last piece of advice for you–remember to try out a variety of different products in your niche. One of the best things about dropshipping is that you’ll never need to worry about changing your inventory, as you can change products in just a few clicks. Find out which products resonate with your audience, and don’t be afraid to experiment.
We know you’ll make a successful free plus shipping store!
Want to learn more?
- What Is ePacket Delivery?
- The Ultimate Guide to Starting Your First Ecommerce Business
- How I launched my eCommerce store in less than 30 minutes (with products)
- How To Select Dropshipping Suppliers
If you’ve got any further questions for us about starting a free plus shipping business on Shopify then let us know in the comments section.