As part of their quarterly e-commerce online payment report, comScore looked at the number of transactions with free shipping over the last several years, reporting significant growth in recent quarters.  In Q1 2011, online retailers shipped online purchases for free almost half of the time (47%), which was a rise from the 39% percent of transactions with free shipping over the same period in 2010.

The growth in this statistic begs the question; Will it become mandatory to offer free shipping with online payments to stay competitive?  While signs may point to yes, here are some things to consider if you’re a small business:

  1. If you’re accepting online payments for a service, you’re obviously not worried about shipping orders, so your e-commerce shouldn’t be affected by this trend (although some industries may start increasing the number of free quotes/analyses/reviews/appraisals).
  2. Product resellers should assume that competitors selling the same product are thinking about implementing free shipping, if they haven’t done so already.
  3. Conversely, for unique products that consumers have a hard time finding elsewhere, it is likely OK to continue passing shipping costs along to the customers.
  4. If your product can be purchased locally, know that you’re already competing with someone who doean’t have to bother with shipping fees.  Local merchants also have a leg-up in delivery time, so you will need to find additional ways to make your online offering more appealing.
  5. Finally, the price of the products being purchased with online payments should be brought into the equation.  Shoppers tend to integrate losses after larger purchases, making them more willing to purchase subsequent smaller items, such as shipping.  If, for instance, a consumer spends $1500 on a new television, they are more willing to integrate the loss incurred by purchasing a $30 cable.  That same $30 cable is harder to sell by itself.  Therefore, if your product is expensive, passing shipping costs along to your customer is less likely to impact your sales.

If you’re a business who isn’t offering free shipments for online transactions but probably should, there is no need to panic – the statistic is still under 50%!  You should, however, make note of the trend and start considering making free shipping part of your online offer, as well how it might figure into your revenue equation.  You don’t have to be the first business to adopt free shipping, but you certainly don’t want to be the last!

Matt Rushing

Matt Rushing

My name is Matt Rushing and I joined the PaySimple team at the beginning of 2010. In 8th grade, a career test forecasted that I would go on to become a cheese maker, but that has yet to come to fruition. Until it does, I assume I’ll continue my career in Marketing. Having lived in Colorado for 75 percent of my life, I think I’m as close as it gets to “native” status. When I’m not at work, I enjoy golf, skiing, writing and spectator-sporting. You can find him on

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