Think Free Shipping is Free? Here’s How the “Amazon Effect” Hurts Small Businesses.
Fast and free. Isn’t that how we all prefer our shipping?
Consumers have adjusted fairly easily to the era of convenient and quick delivery for everything from groceries to entertainment. Large online retailers, like Amazon, have become our one-stop shop for everything we need. But how much does free shipping play into your decisions as a consumer, and is free shipping really free?
The so-called Amazon Effect, or the precedent set by Amazon where minimum purchase requirements qualify you for free shipping and encourage the purchase of more items, is the psychological experience we all have when adding one more item to the cart, saying, “Why not? It’s free shipping!”
No, Free Shipping Is Not Really Free
The truth is, shipping is paid for one way or another. Most commonly, you are paying for shipping, whether it’s labeled free or not. Consumer psychology taught businesses long ago that slapping “free” near anything is a guaranteed way to encourage additional purchases.
Many companies execute this “free” shipping profit strategy by labeling shipping as free but inflating the price of the product you’re buying to not only cover shipping costs but a little extra to make a profit. Alternatively, they may claim free shipping for you but then charge their vendors or manufacturers more to compensate for the difference.
How Shipping Costs Work at Front Desk Supply
At FDS, we choose not to offer free shipping because it’s the most affordable option for the customer at the end of the day. We believe our customers are best served by this choice; we don’t inflate our prices to cover a general shipping price estimate, which many other companies overestimate and use as a profit center. We want to show how competitive our product costs are, as well as pass through the great rates we get on shipping. This lets our customers compare apples to apples.
In fact, the Front Desk Supply team completed a comprehensive FedEx training program so the most accurate estimate for shipping quotes can be provided each time a customer receives a quote when placing an order. This ensures our customer base knows they are getting full transparency on our shipping costs.
Next time you’re comparing prices on websites, remember: “free” shipping isn’t really free.
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