Fab.com just announced a free shipping initiative. Not a holiday special but a permanent new policy on free shipping on all orders of $75 or more.
â€śOur team conducted a thorough business analysis and refactored our technology to enable this great benefit for our customers. Globally. We specifically planned Fabâ€™s Free Shipping to launch today, November 15, in time for the holidays â€” and itâ€™s here to stay. Itâ€™s not just a holiday promotion. We believe that the best shipping is fast and free,â€ť said CEO Jason Goldberg.
Other sites are also offering free shipping this holiday season. Groupon is launching its first holiday catalog named â€śGroupon Goodsâ€ť and offering free shipping and returns on items sold. Orders over $15 and weighing less than 150lbs., will come with free shipping and free returns within 14 days.
â€śThe holidays are a time for giving but no one wants to give half their budget to pay for shipping,â€ť Faisal Masud, head of Groupon Goods, said in a statement. â€śWeâ€™re happy to alleviate some stress and help shoppers stretch their dollars with the debut of free shipping for purchases over $15, just in time for gifting season.â€ť
Many companies point to the popularity of Amazon Prime, a 7-year-old service thatâ€™s been so popular that more items are shipped using it than Amazonâ€™s older free Super Saver Shipping initiative. Amazon Prime offers customers free two-day shipping on one million items for only $79 dollars a year. Customers quickly see the value of this service and often use more than $79 worth of shipping costs in a few weeks. While the size of customerâ€™s orders often decreased according to one study, the frequency of orders increased.
The success a business can gain from offering free shipping can come at a cost. The price of shipping will have to be absorbed somewhere else. In the case of Amazon, industry experts believe Amazon is spending more money that it earns on the program â€“ by as much $11 per user. Also, the company lost $2.4 billion last year in net shipping costs, according to Fortune Magazine. Amazon remains committed to the free shipping program however, writing in their 2011 annual report, â€śwe believe that offering low prices to our customers is fundamental to our future success, and one way we offer lower prices is through shipping offers.â€ť
Before rushing to offer free shipping, a business should check if they can accept and absorb the cost of shipping without reducing their overall profit. Taking advantage of discounts offered by the US Postal Serviceâ€™s flat rate shipping is one way to offer this promo. Most customers will want a minimum of 2day shipping at the most. With the holidays around the corner, no one wants to wait too long for a package.