Seth Godin, marketing guru, suggests in a recent blog post that online, the economics are clear: repeat business is what matters.

Amazon has set the tone with free shipping while most online businesses tend to over inflate shipping prices. This creates a profit center in most cases from shipping charges alone. Not good for repeat business.

Take for example small ticket items that cost more to ship than the product itself. This is a loser online for both you and your customer. Once they reach checkout, your customer will feel they are getting ripped off- which is the truth.

Your product should have enough profit margin alone to sustain free shipping. Otherwise it’s not a good product to be sold online. This will allow you to better serve your customers and increase repeat business.