About two years ago, I had a client that was tight on money. Being a seasonal business, I totally understood. She was looking to place about a $75 order and shipping would have been $15. She asked about my free shipping policy and, at the time, it was order $300 of products for free shipping. What would have been a $90 bill now became $210 more at a time when money was scarce. Because she did not want to pay for shipping (a measly $15), she placed a $300 order instead! I actually found myself trying to talk her out of that order! It was insane to spend money you don’t have just to get free shipping. That’s when it dawned on me that free shipping is a scam.
The Costs of Shipping – Vendors Perspective
Shipping is definitely not free! Someone is paying the UPS, Fed Ex or Post Office bill. In heavier items, say shampoo gallons, the cost goes up significantly. For example, to ship a 40 lb box (4 gallons of shampoo) from Charlotte, NC to Raleigh, NC is $29.41. That is only 168 miles.
Same scenario but now we are shipping to Seattle, WA. The cost for 4 gallons of shampoo is $93.90. OUCH!
Companies that ship are always trying to figure out a way to reduce shipping costs so it does not come out of profits. Many large companies that ship a significant amount of goods a month will have better rates with Fed Ex then the mom and pop shop that ship a much lower volume per month.
Another way to save profits is to raise the price of each item to balance out the cost to ship.
The final way to save money shipping is to reduce something else like customer service, quality of products and packaging. Oh my!
The Cost of Shipping – Consumers Perspective (ie: you and me)
Let’s dive into our brains for a second and get to the psychology of what is going on. We see FREE and we feel good. The warm fuzzies called endorphin’s get a crackin’ and we like how this feels. Just say it with me….FREEEEEE
Okay, back to reality. Our endorphin’s are lying to us. It ain’t free and you are paying for it somehow! Through your hard earned money or through hours on the phone, navigating endless automated prompts because the company cannot afford to hire a customer service agent.
The Marketing Guru’s Duped Us All
When internet marketing became the norm, some companies saw a ‘marketing niche’ to offer free shipping to beat out their competitors. Sounds logical, right? Wrong! In the early days it might have worked but now that EVERYTHING is online and being shipped, it has forced all industries to play this game.
The ones that play it well make MORE FROM YOUR MONEY on the free shipping scam. They built it in to all of their prices and even on things that don’t get shipped, you are paying shipping! The companies that played it poorly went out of business. Those are the companies that free shipped everything and didn’t build it in anywhere else. They still tried to provide excellent customer service, great quality items and good, safe packaging. Sorry, do it the right way and you lose.
Here’s a thought that goes against the chemistry of my brain. It doesn’t feel good but it is the most logical. Just pay for shipping. Don’t hide it in my product costs and don’t sacrifice the integrity of your products or staff. If I buy shoes for $45 and it costs $12 to ship – that’s fine. I would rather pay $57 then $75 for the same shoes with free shipping. Oh yeah and did I mention the heel broke off in 2 weeks and I couldn’t get a customer service person on the phone? I’m still on hold……..