There is a growing trend to offer Free shipping to online shoppers. But, free shipping for customers does not necessarily mean "no cost". The merchant is not getting free shipping from the shipping companies. Merchants rely on UPS, FedEx, DHL, the US Postal Service and other shipping companies to deliver customer orders. Even large online companies like Amazon, Wayfair, Target, and Walmart utilize these companies to deliver packages.
Campanies that ship large volumes of packages may receive discounts on shipping, but they still have to pay something. It is estimated that Amazon ships over 3 Million packages per day and spends more than $60 Billion per year in shipping costs. But, the vast majority of online businesses are very much smaller and usually pay the full retail price for shipping services.
Given this information, how do companies like Amazon and Wayfair offer free shipping?
Amazon generally offers free shipping to their Amazon Prime customers. And, not all items come with free shipping - even for Prime customers. Customers who pay the annual fee for Amazon Prime will get free shipping only if Amazon ships the order from their warehouse - items shipped by 3rd party sellers do not qualify for free shipping. Amazon gambles that not every Amazon Prime member will use free shipping equivalent to the price of the annual membership. And, they win on that gamble. If they didn't, Amazon would not offer Amazon Prime.
Wayfair and everyone else who offers free shipping has to recover the cost to ship the orders and they do it by one way only - Raising Prices. Seriously, who pays $300 for a lamp just to get free shipping? Apparently, a lot of people.
Here's how Wayfair and others offer free shipping. Let's assume the regular price for a product is $100. Now let's package it up, put it on a scale, and test to see what it will cost to ship that product to various destinations around the U.S. We know that a letter always costs 60-cents (at the time of this writing) to deliver it anywhere in the U.S. But, an item that weighs more than a few ounces is charged according to its weight, package dimensions, and destination. The heavier it is, the larger the package, and the further it has to be delivered, the more it costs to ship it.
Next we average out all those shipping calculations and come up with say $20. We add this cost to the price of the product for a total of $120 and then say "Free Shipping".
Now that may seem reasonable. But, you should already note that you are not getting Free Shipping - the shipping cost has been added to the price of the product. And, here's a problem. If you live 20 miles from the store that shipped it, you are probably paying too much for that hidden shipping charge. Wouldn't you rather pay $100 for the item and $8 for shipping?
At Sage Meditation, this is our philosophy. We charge a fair price for our products and we charge only what it costs to actually deliver your order to you. We continuously evaluate shipping charges to ensure that we are not profiting by them. If we find that we have overcharged a customer for shipping on their order, we will refund them for the excess charge. We haven't had to do that very often, though, because we are dilgent about making sure the shipping charge is accurate on every order.
The shipping charge is calculated in real time and we offer a few options for shipping so the customer can decide which method they would like to use, how quickly the order can be delivered, and they balance that with what they can afford.
Oh, there is another way that companies can hide shipping costs into their products. This is accomplished by reducing the cost of the product. And, this always means buying things cheap from foreign countries where labor is cheap and envrionmental regulations are lax. Some foreign made products have been later found to contain lead, formaldahyde, and other dangerous chemicals. Cheap products made in foreign countries also take money and jobs away from the United States economy.
With that information, you also need to make a moral decision about your purchase. Free Shipping may look like a great deal. But, it has these side affects. Being a conscious consumer is hard work, but is vital to long-term sustainability in our world.
Thank you for reading.