“Free” shipping is a myth
“Free” shipping is a myth
(Mar. 1, 2022)
Who doesn’t love getting free shipping? There’s just something about the word “free” incorporated into any purchase that seems to make it a lot easier to spend your money. Many companies will go out of their way to let customers know that they are offering free shipping. In fact, there are even studies that have shown many customers will go as far as dropping the entire purchase entirely or leave everything in their e-carts without purchasing if “free shipping” is not an option. It has also been proven that customers will buy items that they really don’t want or need as a way to obtain free shipping that is contingent on purchasing a certain dollar amount of items. Most if not all consumers understand that even when they get free shipping with an online purchase, somebody (obviously) is still paying for shipping… no item gets delivered for free, we know this. However, what most consumers don’t understand is that they are actually paying for the so called, “free shipping”.
It is important to note that for starters, shipping costs in general are not assigned based on the value of the item in the box. So, for example, considering the weight is equal, the shipping cost to send a $500,000 diamond ring vs shipping some t-shirts in the same box is the same. Whenever we see an item with the option to get free shipping, this really means that the cost of shipping is actually hidden and included in the price of item. Getting free shipping on a product(s) also means that the consumer is paying the sales tax on both the item and the shipping. Essentially, the consumer is paying slightly more for the item, mainly because if they were to purchase the item and had to pay separately for the cost of shipping, they would only pay the sales tax on the item. In some instances, consumers are technically paying double in shipping costs for items. The best example for this is Amazon Prime. Yes, consumers are getting the free shipping perk as long as they have the membership, but consumers are paying a yearly fee for this “free shipping”.
Most commercial buyers who usually buy items in bulk, understand how this so-called “free shipping” works and they actually prefer to pay for their shipping costs, as opposed to getting free shipping. If you purchase from a small business, one of the ways they even are able to remain competitive is charging for the shipping cost. The large commercial retailers such as Amazon, Wal-Mart, etc. all get huge discounts on shipping costs from companies like UPS while the small businesses get a significantly less discount for shipping in comparison.
With the guarantee of “free shipping” constantly being pushed and marketed to consumers by the media, the next time you make an online purchase, keep in mind that you are paying for shipping one way or another.