We all hate a slow and painful checkout experience. Yet when we look at the main reasons why customers abandon your checkout, this actually features pretty far down the list. 

Out in front, and accounting for an estimated 48% of checkout abandonments? ‘Extra costs are too high (including shipping, taxes and fees)’.

This is naturally a larger problem for brands with lower average order values. When shipping costs take up a fairly high percentage of an order, they’re even more off putting.

But does the answer lie in offering free shipping, and either recouping the cost through raising product prices or banking on increasing sales revenue? Here are some things to consider. 

A quick reminder first: always be optimising your shipping cost  

When was the last time you dedicated time to lowering your shipping cost? It’s easy for this cost to feel fixed and inevitable, but even a small saving here can help. 

Receiving more orders than before? Try negotiating a better deal with your shipping provider, or buying more shipping materials in bulk to save money. And optimise the human element, too. Whether your brand is shipping 50 orders a week or 5,000, adjust your space, setup and processes to make packing each order as fast as possible. Any recovered cost, however marginal, will help when passed on to the customer. 

Try adjusting your free shipping threshold

Harvard Business Review published their findings from over 1,000 e-commerce pricing tests on US brands – and the results might surprise you. 

With 48% of customers abandoning checkout due to ‘extra costs too high’, it’s natural to assume that simply absorbing the cost of shipping into your product prices would be a good place to start. And while this is certainly something worth A/B testing yourself, it might not be the silver bullet you expect.  

In the Harvard Business Review’s tests concerning shipping rates, the ones where the free shipping minimum was raised actually won more often. Any sacrifice to conversion rate was compensated for with the higher order values: ‘70% of merchants found that their existing threshold or a higher one was best’.

This is something we’ve heard anecdotally from other e-commerce brands, too. 

“We’ve tried lots of ways to increase average order value but the most effective by far has been the shipping costs”, explained Rob Weatherhead, the owner of BonCru Wines. 

“As we have a breakable product our typical shipping costs are high, and customers know and expect that. But by playing around with our shipping fees we find far more people will look for the thresholds of shipping and increase their order to an amount that brings it down. We offer free shipping over £100 and a lot of our orders are in the £100-£115 bracket as a result because people will add that one more bottle to tip it over.” 

So rather than going all-in to offer free shipping, consider experimenting with raising your free shipping threshold slightly above your current average order value. 

Your data is all that matters, though

While it’s always helpful to get a sense of what’s working for other brands, your data is the only data that matters. 

The difficult part for smaller e-commerce brands is A/B testing, which can involve expensive tools, and cause delays while you wait for tests to reach statistical significance. 

At FERO, we draw on 430 data points to predict the best checkout experience for each of your customers, helping you improve your conversion rate on autopilot. We also help you benchmark against other similar businesses right from your dashboard. Try it free for 30 days.