Free shipping isn’t really free (2020)(theatlantic.com)
theatlantic.com
Free shipping isn’t really free (2020)
https://www.theatlantic.com/magazine/archive/2020/01/the-myth-of-free-shipping/603031/
46 comments
The article is trying to paint baking in the shipping cost into the item's sale price as some diabolical anti-consumer ploy but in reality that's exactly what customers want. Yes I know free shipping isn't actually "free", just like how free returns aren't free and customer service isn't free and the warranty isn't free and the credit card transaction isn't free... But I still don't care. Tell me ONE price — inclusive of everything — up front, and I'll decide if I want to buy your product or not.
Google shopping is the worst for this... 'sort by price' sorts by the price without shipping.
But clearly if I'm buying from an online shop I need shipping. And for a $5 item, shipping of $3 and shipping of $25 lead to very different purchase decisions.
But clearly if I'm buying from an online shop I need shipping. And for a $5 item, shipping of $3 and shipping of $25 lead to very different purchase decisions.
In my experience Google shopping is inclusive of shipping if they know about it, but there's a big data hygiene problem, so you have to verify their results. I find it useful even though it's imperfect.
lol sounds like ebay. Buy a card for $1. They want $35 for shipping. Arrives in an envelope with a $2 stamp.
Ebay explicitly allows you to sort by price + shipping. I don't think they even have a sort by price only option.
Don’t forget the cost of handling!!!!
/s (mostly)
/s (mostly)
I don't think it's some diabolical anti-consumer ploy, but shipping is something that has economies of scale: one $100 order is cheaper to ship than four $25 orders.
Let's say I sell shirts for $5 and offer free shipping with a $25 minimum. The shirts would be $4 if I charged for shipping. Shipping 5 shirts will cost me $5 and shipping 40 shirts will cost me $10. If someone buys 5 shirts, $1/shirt goes to shipping and I get $20 after shipping - just like $4 shirts plus $5 shipping. If someone buys 20 shirts, $0.50/shirt goes to shipping - I'm making an additional $0.50/shirt because someone decided to make a larger order.
But this is why a lot of stores do coupons when you hit thresholds. Free shipping at $25, 10% off if you spend $100. That way if you spend $100, you're actually charged $90 and so you're only paying $4/shirt + $10 shipping.
> Tell me ONE price — inclusive of everything — up front
Do coupons that require you to hit a spending level fit into this metric? I think they do in a lot of ways. You see the price and if you just want the price you just get the price while large orders get the discount. But it can also be hard when you see a bulk discount and feel pressured to spend more.
Let's say I sell shirts for $5 and offer free shipping with a $25 minimum. The shirts would be $4 if I charged for shipping. Shipping 5 shirts will cost me $5 and shipping 40 shirts will cost me $10. If someone buys 5 shirts, $1/shirt goes to shipping and I get $20 after shipping - just like $4 shirts plus $5 shipping. If someone buys 20 shirts, $0.50/shirt goes to shipping - I'm making an additional $0.50/shirt because someone decided to make a larger order.
But this is why a lot of stores do coupons when you hit thresholds. Free shipping at $25, 10% off if you spend $100. That way if you spend $100, you're actually charged $90 and so you're only paying $4/shirt + $10 shipping.
> Tell me ONE price — inclusive of everything — up front
Do coupons that require you to hit a spending level fit into this metric? I think they do in a lot of ways. You see the price and if you just want the price you just get the price while large orders get the discount. But it can also be hard when you see a bulk discount and feel pressured to spend more.
There's also the problem of where things are being shipped from, they could in a warehouse down the road, or coming from the other side of the world. For something regular/you shop often at, entering your shipping address to have shipping costs appear as you shop might help, but if it's a one-off, or you're trying to price compare and you don't want to enter your details yet, then that's much harder.
Free returns sucks IMO; I want cheaper prices because I want to buy what I need to begin with. It seems I’m in the minority though.
I often need to make returns on shoes, as I’m between sizes and wear a size that few vendors carry locally (Men’s 7.5 or 8, which is basically never in stock). So free returns is nice.
Not to go too meta on this, but if you buy two of something to get past the free shipping threshold, then do a free return on one of them, have you gamed the system?
I accidentally did that with Walmart.com once. My bill was $40, which qualified for free shipping. I checked out, and realized that I had ordered one of the items (about $20) to be picked up, which wasn't possible because there's no Walmarts near me. I quickly canceled that item, but the rest of the stuff shipped.
I kind of felt guilty, because I genuinely wasn't trying to game anything.
I kind of felt guilty, because I genuinely wasn't trying to game anything.
[deleted]
Just look for promotional items marked as "final sale" and you'll get things cheaper without returns.
you know what else sucks? living in a low trust society where people game these return systems (which we also pay for).
Whatever trust and sense of ethics there was have been swept away by companies playing continual pricing games, eschewing quality assurance, and nickel and diming workers into doing the bare minimum. Personally I'd love a store that had consistently low prices where I could save money by batching orders for different things, packed items well, had intelligent empowered customer service, and charged money for elective returns. But evidently there is more money to be made by confusing the market with wildly variable prices day to day, price fixing across stores, and turning the screws where they can. The industry has made it clear that the only thing that matters is the formal terms, so that's the game I'll play.
For example, I've got zero qualms about buying something I merely might want because it's a on a good sale, and then making the actual decision over the next 30/90 days. And if I've already got a pending return somewhere, then doubling down with more speculative buying is essentially free. Holiday shopping season is basically an extended project season.
Or when items arrive damaged, I'll optimize the presentation of my complaints such that I'm less likely to have to actually return them to get replacements. This saves me the time of doing so and makes up for having to deal with the situation in the first place.
For example, I've got zero qualms about buying something I merely might want because it's a on a good sale, and then making the actual decision over the next 30/90 days. And if I've already got a pending return somewhere, then doubling down with more speculative buying is essentially free. Holiday shopping season is basically an extended project season.
Or when items arrive damaged, I'll optimize the presentation of my complaints such that I'm less likely to have to actually return them to get replacements. This saves me the time of doing so and makes up for having to deal with the situation in the first place.
When I ship myself (aka, fly on planes) I much prefer it when they bundle all the fees together so that I know what I'm paying. I believe it's the law in Canada.
I wish we had pricing transparency laws requiring companies to honor the advertised price without being able to tack on all kinds of hidden fees. Since we don't, there are many times where I've abandoned an online cart because a hidden fee increased the price beyond what I was willing to pay. I'm also generally not going to order from web sites that do "orders of $x or more get free shipping" unless there's at least $x worth of items I want to order so this tactic is self-defeating.
You might be interested in some recent movement on this issue in California: https://sd09.senate.ca.gov/news/20231009-california-banning-...
Yup. Either bake it in or make the shipping price known in your banner. It's a pain the ass to do price comparisons, think you're getting a deal, only to get hit with $15 shipping on your $10 widget immediately before checkout.
Just ONE price sounds good but in reality, shipping is very complicated and the true cost varies greatly depending on your location, quantity of items, and mix of items in the order.
Baking free shipping into the price of every individual SKU most likely means that a retailer will either set a price higher than Amazon or earn negative profit on many orders. In both scenarios, the long-term consequence leads to far fewer small or independent retailers and your only remaining choice being Amazon and perhaps a few other megacorps.
Baking free shipping into the price of every individual SKU most likely means that a retailer will either set a price higher than Amazon or earn negative profit on many orders. In both scenarios, the long-term consequence leads to far fewer small or independent retailers and your only remaining choice being Amazon and perhaps a few other megacorps.
I feel part of the problem is the adversarial environment created by the lack of proper consumer laws e.g. returns/warranty and credit card fees are strongly regulated in Australia, whereas in the US taxes aren't included in the sticker price, tipping and there's a general opacity about the actual cost. If there's no trust, then people go looking for signals like "free shipping" to see there's no hidden fees.
> The article is trying to paint baking in the shipping cost into the item's sale price as some diabolical anti-consumer ploy but in reality that's exactly what customers want.
I don't want that. I don't pay for prime and I don't pay for shipping, I'll wait for weeks or longer until I need however many items it takes to reach the slower free shipping threshold. I don't want my option to save that money to go away.
I don't want that. I don't pay for prime and I don't pay for shipping, I'll wait for weeks or longer until I need however many items it takes to reach the slower free shipping threshold. I don't want my option to save that money to go away.
Yeah it ignores the age-old "shipping and handling" fees that infomercials used for decades to inflate the cost of goods. The early internet had tons of this stuff, and often it was kind of "surprise billing" where you bought something and cursed when you realized there was a 5$ fee on that 10$ widget.
Note that this is RAMPANT on eBay these days.
I remember some online store forum bragging about how much extra money you make with it. This was circa 1999-2001 era online shopping.
Free shipping means the price is the price you pay. It's a lot more transparent.
However, I can see how major retailers get to negotiate superior relationships with Fedex and UPS and USMail.
Note that this is RAMPANT on eBay these days.
I remember some online store forum bragging about how much extra money you make with it. This was circa 1999-2001 era online shopping.
Free shipping means the price is the price you pay. It's a lot more transparent.
However, I can see how major retailers get to negotiate superior relationships with Fedex and UPS and USMail.
You don't even need to be a huge retailer to get good shipping rates.
Even for a small business, opening an account will get you double digit percentage discounts on retail shipping rates.
Even for a small business, opening an account will get you double digit percentage discounts on retail shipping rates.
You have a point! It's simply convenient
Personally, it’s never been about free shipping for me. It’s shipping inclusive pricing.
It’s the same reason I will always toggle the “include fees” on Airbnb’s search interface. Just tell me the real price.
Upfront pricing and an assumption I’ll get the item in 1-3 days is the real value prop, and I’m still a happy customer of that product
It’s the same reason I will always toggle the “include fees” on Airbnb’s search interface. Just tell me the real price.
Upfront pricing and an assumption I’ll get the item in 1-3 days is the real value prop, and I’m still a happy customer of that product
This article makes no sense. Just include the shipping in the price and that's it. Article unnecessary.
> Just include the shipping in the price and that's it.
Hard problem, though. I can ship to locals, which is the vast majority of my customer base, for practically free. But occasionally I get a far-away order where shipping is tremendously expensive.
If the price is inclusive, all my local customers have to pay substantially more just to cover the occasional order from far away. That's a lot for them to burden, and likely they'll stop buying. Nobody will pay an infinite amount for something. Alternatively, I could cut off sales to those in far away places, but that doesn't help me or them. They are buying from me because they want my product.
The obvious solution is simply to let those in far away places who still want to buy the product to pay a shipping fee on top commensurable with the added costs of getting the product to them.
Hard problem, though. I can ship to locals, which is the vast majority of my customer base, for practically free. But occasionally I get a far-away order where shipping is tremendously expensive.
If the price is inclusive, all my local customers have to pay substantially more just to cover the occasional order from far away. That's a lot for them to burden, and likely they'll stop buying. Nobody will pay an infinite amount for something. Alternatively, I could cut off sales to those in far away places, but that doesn't help me or them. They are buying from me because they want my product.
The obvious solution is simply to let those in far away places who still want to buy the product to pay a shipping fee on top commensurable with the added costs of getting the product to them.
This article names a bunch of advantages of free shipping but we're supposed to reject it because an Etsy seller decided she didn't want to offer it and compensate by increasing the price of her product slightly for an algorithmic boost? I don't get the point. Either someone's fishing for an excuse to a decline in popularity or the justification for getting rid of "free" shipping is poorly laid out.
Some sellers don't want to increase their product price. Perhaps because they have pricing agreements (eg. Royalties of some percentage of the sale price).
Perhaps because for a higher price the customer expects a better product. (Nobody complains when the $1 scissors don't cut great, but the $15 scissors really ought to cut properly)
Perhaps because for a higher price the customer expects a better product. (Nobody complains when the $1 scissors don't cut great, but the $15 scissors really ought to cut properly)
I do appreciate how free shipping makes the vendor care more about the cost of shipping. If you’ve ever ordered a tiny part from some shop whose cheapest shipping option is $9.00 you may know what I mean.
"How retailers hide the costs of delivery"
Umm, when I go to the Home Depot warehouse, they don't add something onto my receipt for "warehouse real-estate cost" or "warehouse heating charge." In fact I'd get annoyed if they did add such a charge. Furthermore, it's often publications like this one that whine when vendors like Comcast add in "regulatory recovery fee" or "regional sports fee" and the retort is "that's just a cost of doing business, they shouldn't be charging a fee for it, that's a junk fee."
But for some dumb reason when a retailer decides to bake the cost of shipping into the sticker price, that's not some pro-consumer thing but rather merits a cynical "free shipping isn't really free" and complaints that the retailer is "hiding" something.
Umm, when I go to the Home Depot warehouse, they don't add something onto my receipt for "warehouse real-estate cost" or "warehouse heating charge." In fact I'd get annoyed if they did add such a charge. Furthermore, it's often publications like this one that whine when vendors like Comcast add in "regulatory recovery fee" or "regional sports fee" and the retort is "that's just a cost of doing business, they shouldn't be charging a fee for it, that's a junk fee."
But for some dumb reason when a retailer decides to bake the cost of shipping into the sticker price, that's not some pro-consumer thing but rather merits a cynical "free shipping isn't really free" and complaints that the retailer is "hiding" something.
Part of it is that shipping has somewhat of a “flat fee” + per pound.
So it is better to combine purchases, but that’s not the case if you have Prime (Amazon tries to bribe you to do so).
So it is better to combine purchases, but that’s not the case if you have Prime (Amazon tries to bribe you to do so).
> Amazon tries to bribe you to do so
Do they? I can't recall Amazon offering me anything other than a longer wait time (for the items that can be shipped faster) and fewer boxes.
Do they? I can't recall Amazon offering me anything other than a longer wait time (for the items that can be shipped faster) and fewer boxes.
When I had prime they’d almost always offer me a $1 digital video coupon or some other credit to take slower shipping which would allow them to combine. At the height it was easily more than the cost of prime each year in credits.
Maybe in denser areas it’s not worth it to them.
Maybe in denser areas it’s not worth it to them.
I always get offers for an additional 1% back on my Amazon Prime credit card.
The questionable quality is that the word free is known to induce strong positive emotions, more so than if online retailers said more straightforwardly something like “Prices include shipping.” Yes, we know the costs of shipping are factored into the prices of the products, but it’s essentially a dark pattern to increase a shopper’s emotional likelihood of buying.
As always, though, there are different norms among industries. We don’t think anything is off when we see “Free Shipping” notices online, but if the same practice were elsewhere we’d think it were bizarre. To wit:
Restaurants: Free Dressing with Any Salad
Coffee Shop: Free To-Go Cups
Cities/Municipalities: Free Schools and Snow Plowing
Auto Mechanic: Free Windshield Washer Fluid
Notebook Computers: Free Charging Cord
Credit, though, to coffee shops which do provide a discount if you bring your own mug. Plenty of other businesses could do this and offset the built-in shipping charges they have online. For instance, a shoe retailer may have the same price online (with free shipping) as their local store, but I’ve never seen a setup like this whereby the customer gets a discount for picking up locally.
As always, though, there are different norms among industries. We don’t think anything is off when we see “Free Shipping” notices online, but if the same practice were elsewhere we’d think it were bizarre. To wit:
Restaurants: Free Dressing with Any Salad
Coffee Shop: Free To-Go Cups
Cities/Municipalities: Free Schools and Snow Plowing
Auto Mechanic: Free Windshield Washer Fluid
Notebook Computers: Free Charging Cord
Credit, though, to coffee shops which do provide a discount if you bring your own mug. Plenty of other businesses could do this and offset the built-in shipping charges they have online. For instance, a shoe retailer may have the same price online (with free shipping) as their local store, but I’ve never seen a setup like this whereby the customer gets a discount for picking up locally.
Any time someone who isn't a big corporation wants to ship something, they pay outrageously large fees. Those little guys subsidize the big guys.
The big guys provide steady volume to keep the trucks, trains, and planes full. Without the big guys it wouldn’t be possible to offer the service at all.
Free shipping costs a buck o' five
TANSTAAFL
“Free lunch isn't actually free”, more news at 11
Free shipping isn’t free, it costs folks like you and me And if we don't all chip in
We'll never pay that bill
Free shipping isn't free
No, there's a hefty fuckin' fee
And if you don't throw in your buck o' five
Who will?
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