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The free plus shipping sales funnel and business model. In this post, you’re going to learn the basics of the free plus shipping model, how you can apply it to your business, and what to do after.
We’ll also cover how to set up free plus shipping in Shopify.
What Is Free Plus Shipping?
Free plus shipping is when you offer your potential customer a free item, such as a bracelet or a book, to get them in the door.
You offer this item for “free” and only charge shipping. Then, your customer is able to taste what you can offer them. If they like what you can provide for them on something for free, it’s likely a certain percentage of people will want more from you.
Ice Cream Free Samples
Have you ever been to an ice cream parlor? Many times there will be someone passing out free samples to have you try a flavor even before you get in line to buy some ice cream. You’re able to taste what they have to offer before committing to a larger purchase.
It’s the exact same with the free plus shipping model.
You offer an item that has a low cost for you, and it’s “free” for the customer which is very enticing in the world of internet marketing.
Anytime someone sees something that’s free, we’re naturally drawn to it.
The shipping is so cheap that you as a business owner are effectively just breaking even.
According to Investopedia, “The breakeven point is the level of production at which the costs of production equal the revenues for a product.”
How To Setup Free Plus Shipping in Shopify
First, you’re going to set the price of the item you want to use for your free plus shipping offer at free or $0.00.
Next, navigate to the Settings page in your Shopify store dashboard, then select the Shipping and delivery page.
Then, you’re going to select the Custom Shipping Rates section and click on “Create new profile”.
After that, you’ll add your product to the new shipping profile you created with your shipping rate set.
How you want to set up your shipping rates, countries, and pricing is up to you.
You could go for a shipping price of:
- $4.99
- $7.99
- $14.99
The shipping price you determine should be relatively low to match the cost of the item you’re giving them.
You could even set different rate names with higher prices such as “get 1, get 2, get 5” to allow your customer is get more than one at the checkout page and increase the order value.
Alternatively, you can select the option for “Use carrier or app to calculate rates” instead and use the handling fee to set your gross profit margin.
This way, no matter where your customer is located, you can guarantee you won’t lose money shipping the item.
Whatever shipping price you select, the point is not to make a massive profit on your shipping cost. You’re only trying to break even or make a small profit with this offer.
What To Do After Free Plus Shipping
The next step to maximize the use of your free plus shipping model is to offer an upsell or cross-sell.
An upsell is when you offer a higher-end product than the original freebie they were interested in. This could be an audiobook version of a book for example.
A perfect example of cross-selling is McDonald’s, would you like fries with that? Or a meal? How about a drink?
These are other related products that drive up the average order value.
This is how you can start to turn a profit for your business.
Remarketing Opportunities
If customers “agree to marketing” when submitting their email address at checkout, you can also expand your email marketing efforts and grow your email list.
While some people that are interested in your free plus shipping product may only be “freebie seekers“, there will be a percentage that is interested in more.
It’s a fine balance in marketing to reach and attract the right type of people.
To Conclude
The free plus shipping model is a long-term strategy for getting customers to try out your product. While it’s great for eCommerce based businesses, it clearly works well for the food and beverage industry and all different types of businesses as well.
It’s a staple in marketing 101 for acquiring customers while you’re able to break even in the process.
On the backend, once you provide value, you can offer them more valuable products and services that are the real profit drivers for your business.
