The holidays are here and that means we all look for that perfect gift at the perfect price and if you are like so many others you purchase gifts online and yes, most decisions are impacted (at checkout) with 'FREE SHIPPING'!
The thought of it just makes most of us giddy with excitement - we think in most cases that we are getting a bigger bargain.
But....is it really free???
The answer isn't a simple yes and no. It depends on the retailer. So how do you, as a consumer, navigate it to figure it out?
Here are the basics and if you take the time to read the entire post you will gain a better understanding of the process.
Any business has expenses and yes, with expenses comes cost. A retailer whether it is brick and mortar or online has the same expenses when it comes to shipping.
Shipping is and always will be a huge expense. It costs to ship goods and products in no matter the method used (truck, USPS, FedEx, etc.) rates may vary slightly but it still costs the business. Likewise, when a customer buys a product online, there is a cost to ship it to the consumer. That's a double whammy for any business, especially an online business, that ships goods in and out.
Let's look at shipping for a SINGLE pair of earrings. The numbers are just an example.
$115.00 - Wholesale cost from a supplier to retailer (these are very nice earrings by the way!)
$7.95 - Shipping cost from wholesaler to retailer
$12.95 - Shipping cost from retailer to consumer. Why the increase? Boxes, packaging material, new label, etc. It's commonly known as the shipping and handling fee.
$130.90 - Total cost for the product (not considering overhead)
All businesses have to make a profit to stay in business. We have employees, warehouse space, office space, taxes and insurance, etc.
We'll assume that the earrings have a markup making the retail charge $345.00 (too high but this is an example).
$345.00-$130.90=$215.00 possible net profit (so far). You may think that is a nice number but hold on a second. As a retailer, I may not want to lose my profit margins (my business has bills to pay) so as a business owner I SHIFT all or part of the shipping costs to the consumer by adding it to price of the product.
The business decides to mark the retail cost of the product UP to cover ALL shipping costs. So instead of charging $345.00 retail for the earrings, the business now charges $370.00 for the same pair of earrings.
At $370.00 costs to buy and resale that pair of earrings are now covered.
Now that you understand the very basics, you should ask yourself a few questions when you get ready to hit the buy button. Is it really free - remember my $25.00 markup just for shipping?
Statistically, 61% of consumers will abandon a cart at checkout. Why is the number so high? That answer is simple and the consumer reads 'free shipping'.
Is free shipping really worth the additional cost to you just so a retailer can label something as 'free shipping'. In realty, in most cases, (notice I said most and not all), you the consumer are paying an inflated price.
You think it isn't fair? Is it fair when someone steals from a store and the retailer passes the cost to other consumers? It may only cost a single consumer a penny or two but it does cost us all.
In all fairness, all retailers have the legal right to pass shipping costs in whole, in part, truly give you free shipping (big box retailer), pad the cost (shipping and handing fees), or simply by adding to the total weight. It is what it is but you still have a choice.
At Lierre Bridal Accessories we don't play the 'shell game'.
Our prices aren't inflated to pass shipping costs to consumers.
If we can ship a product anywhere in the Continental USA for $x.xx using USPS then that is the price we charge.
Shopping online is fun, fast and easy...just remember to shop wisely.