A thing we take for granted in the online shopping age is free shipping. Thanks to Amazon, we’ve come to expect free shipping no matter what we buy, from the smallest everyday item to the bigger furniture set possible. Heck, if I buy a Tesla car online, I expect a Tesla employee to deliver the car to me, gratis. How is the guy getting home afterwards? That’s not my problem.
Of course, free shipping is most decidedly not free. Someone is paying for the teams of people driving those trucks and carrying those poundages, and it’s certainly not the retailer. The cost of shipping is baked into the margins the retailers have on the item sold. Any Shark Tank watcher would know, margins between landed cost and wholesale is typically enormous.
We are paying for shipping, it’s just that the norm is to bake it into the price of the product. Except on platforms like eBay. The auctions there are where the true cost of shipping can be seen. No individual seller can afford to “eat” the shipping cost just to placate the customer expectations. The economies of scale is non existent. Psychological test: is it more lucrative to hike up the price and offer free shipping, or lower the price and charge shipping a la carte?
The problem with free shipping is that it sets an unrealistic expectation that shipping should also be free if customers need to return an item. I’m sure Target can afford to absorb the cost to return a pack of pencils, but for something like an exercise bike? Probably not. But then the customer gets pissed once they see the actual costs to ship the bike, which they must pay if they want to return it.
Amazon is kind of genius in purchasing Whole Foods, thereby creating a physical location where Amazon shoppers can return items conveniently for free.
Bathe with you in the sea.