How Much Can Small Businesses Do About Free Shipping?

With the holiday shopping season right around the corner, many small businesses across the country are making the final preparations to cash in on the traditional buying frenzy. One aspect of that might be taking the time to determine how much they can afford to spend when it comes to offering their customers free shipping options.

These days, many people who shop for items online believe that they should be able to receive free shipping just about any time they make a purchase that exceeds a certain dollar value, according to a report from New York Newsday. In fact, recent polls suggest that this expectation is now so prevalent and accepted that 58 percent of shoppers say they’ve added extra items to their carts just to qualify for free shipping, and 83 percent say they’re willing to wait a little while longer to actually receive those products.

The catch for smaller companies
However, small businesses that offer this kind of thing as a means of better competing with larger companies in their field should keep in mind that this isn’t always the best idea, the report said. That’s because large companies offer it as a bonus because they can afford to take on that added cost. It therefore might not be as viable an option for a smaller firm with a much thinner profit margin overall.

“There’s no such thing as free shipping,” Chris Malta, CEO of, an Orlando-based e-commerce wholesale and shipping company, told the newspaper. “Somebody has to pay the shipper.”

The problem is that because consumers expect to receive free shipping these days, not offering it can lead to lost sales, the report said. For this reason, experts generally suggest that smaller companies make the threshold for obtaining free shipping a little higher – such as $100 instead of the standard $50 – it might actually end up enticing people to spend a little more than they might have otherwise, which in turn could actually be beneficial for the bottom line overall.

Companies that want to free up a little extra money to cover these costs, which can add up quickly at this time of year, might want to think about the ways in which cutting costs for other things in their budgets can go a long way. For instance, finding more affordable small business insurance – including policies for commercial insurance – could end up saving a firm thousands annually that they could they devote to other aspects of the company.