Posted by Janet Voigt on Thu, Aug 04, 2011 @ 09:58 AM

In today’s cut-throat business environment the lure of free shipping can be enticing.

Having the ability to see bottom-line pricing without additional fees like shipping and delivery is, let’s face it, satisfying!

Shipping box

The reality is that there is really no such thing as “free” shipping. 

  •  With ever increasing fuel and transportation costs, shipping has become a financial obstacle for all retailers trying to earn business by winning the price war. 

  • Power-house sellers like Amazon have the buying muscle to force their suppliers down to bare-bones margins creating a win for Amazon but a low-profit situation for the supplier.  Amazon then factors in their shipping costs, adds some cost averaging and voiles, free shipping!  Of course none of that takes away their shipping costs; the costs are just hidden in other ways.  In much the same way, non-behemoth retailer who understand the appeal of “free” shipping often price items to hide their actual shipping costs. 

  • Another common method of pricing items to include “free” shipping is to value engineer products – a process that reduces the quality of the components. 

  • The product looks like the original but with far lower manufacturing costs because the product is of overall lower quality. 

  • What you think may be apples to apples may really be apples to pears -   similar, but not the same. 

  • In the furniture industry, for example, a sofa can be value engineered by using lower density foam, lesser quality fabric and non-hardwood frames.  Sure it may look high end but the reality is it became a different animal when it was value engineered. 

  • So, if you take a lower quality product, add shipping costs onto it you can advertise the sofa, delivered for free, that looks like its higher-end cousin.

When shopping, beware of anything free. 

If logic tells you that it is too good to be true, it probably is.  Everything has a cost. 

Look for sellers that offer adequate product details, wholesale pricing and a separate line for shipping.Then and only then can you really be sure what you have paid for.


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