Free shipping is an effective tool used by many eCommerce retailers as a way to increase sales. Free shipping is also widely cited by consumers as a key factor when they make a decision to purchase from a specific website.
As of 7.5.2, organization have the option of offering free shipping on:
· INV product orders for products defined as eligible for free shipping,
· back office and/or web/mobile orders depending on set up,
· orders only shipping to domestic address, if so defined.
Rules can be defined to control when orders will qualify for free shipping based on:
· when the order is placed (i.e., based on Order_Master.ORDER_DATE),
· and/or based on the total net amount of the order (i.e., sum of ((BASE_UNIT_AMOUNT minus BASE_UNIT_DISCOUNT minus AGENCY_UNIT_DISCOUNT) times ORDER_QTY) minus BASE_COUPON_AMOUNT).
· Free shipping can also be defined to be available only for members.
· Free shipping can be linked to a market code.
· Free shipping can be linked to a coupon.
Qualification for free shipping is at the order level; once an order qualifies for free shipping, additional INV order lines eligible for free shipping will also be given free shipping.
In
7.5.2, only orders where all order lines are going to the same ship-to
address qualify for free shipping. This means that group orders will not
qualify for free shipping. Supporting free shipping on orders with multiple
ship-to addresses when each set of order lines for each ship-to address
qualifies for free shipping will be considered for a future release.
This feature applies to all order lines with INV products that have shipping fees where the Eligible For Free Shipping checkbox on the General Setup screen in Product Maintenance. For more information, please see Defining an Individual Inventoried Product. If the product has surcharge fees but qualifies for free shipping, the standard shipping fee is waived but the surcharge fee is applied. Inventoried products that have override shipping fees should be defined as not eligible for free shipping.
Based on the org unit setup, organizations must decide whether to:
· Use free shipping
· Limit free-shipping to online orders only (i.e., web and mobile orders)
· Limit free shipping to orders being shipped to a domestic address
For more information, please see Defining Free Shipping Defaults.
Additional free shipping setup includes the following:
· Defining Free Shipping Rules
· Defining Free Shipping Promotional Text
You can also define market codes and coupons to be eligible for free shipping. For more information, please see Defining a Free Shipping Market Code and Creating a Free Shipping Coupon.
Once
an order that qualified for free-shipping is processed and paid, if product(s)
are returned that bring the order
below the order qualification amount, the system will NOT recalculate
the order to add back shipping charges.
Offering free shipping is a business decision that organizations will want to closely monitor to understand the cost versus benefit. The goal of free shipping is to increase sales, but it’s also to increase the average sale amount of orders. If an average order on an organization’s website is between $25 and $30, setting a free-shipping order threshold of $50 will boost the average order amount for customers motivated to get free shipping by more than $20.
To aid in analyzing free-shipping activities, new fields are being added to Order_Detail to assist with this analysis. Some examples of the way the new Order_Detail fields are populated are given below.
Assume the following inventory orders that qualified for free-shipping:
· Order for books that totaled $53 that would have had a shipping fee of $10.60
· Order for 5 plaques that totaled $65.00 with a standard shipping fee of $13.00 and shipping surcharge of $10.00.
In Order_Detail, the order lines look like this:
Order Line Net Line Amount |
BASE_SHIP_ AMOUNT |
BASE_ CALCULATED_ SHIP_AMOUNT |
BASE_FREE_ SHIP_AMOUNT |
BASE_SHIP_ SURCHARGE_ AMOUNT |
|---|---|---|---|---|
$53.00 |
0.00 |
$10.60 |
($10.60) |
0.00 |
$65.00 |
$10.00 |
$23.00 |
($13.00) |
$10.00 |
The following reports are provided so that organizations can run reports on a monthly basis. The reports will provide enough information on a monthly basis that, if the organization wishes to create journal entries for free-shipping expense account entries to offset shipping revenue account entries, they can do so. The reports will also give the organization enough information that they can evaluate the effectiveness of their free-shipping campaigns:
· INV1325 Free Shipping Revenue Analysis
· INV1326 Free Shipping Sales Analysis by Sales Period
· INV1327 Free Shipping Sales Analysis by Minimum Order Amount
See also:
· Free Shipping Back Office Orders