3 ms·

I’m not sure I agree with the opening premise that offering “free shipping” is dangling a free lunch that doesn’t exist. Technically this is true but it makes

I’m not sure I agree with the opening premise that offering “free shipping” is dangling a free lunch that doesn’t exist. Technically this is true but it makes a lot of sense by creating an analogous experience as with retail. If I walk to the corner store to pick up something I’m not paying a line item for the logistics that delivered that item from a factory in China, nor a line item for the rent to keep that item sitting on a shelf in walking distance. I just pay the price of the item, and those costs are baked in. Maybe an economist can argue this isn’t the most efficient way of paying for externalities but it’s hard to argue it’s without reason. It’s clearly a preferred consumer experience. Amazon prime is like a Costco membership. The only difference is Amazon handles last mile from the fulfillment center, Costco expects me to provide last mile fulfillment with my car.

granzymes 3y ago
I think a physical retail analogy would be to imagine that every store charges a variable "restocking fee" based on how much it costs to get a replacement for the item that you are purchasing. You don't know what that fee will be until the clerk is ringing you up. Then one day a store decides to bake the restocking fees into the price, and no longer surprises the consumer with a variable fee at the checkout counter. This is clearly a win for consumers, who can now shop the aisles knowing exactly what they will pay for the item upfront before they put it in the cart and go to check out.
hyeonwho22 3y ago
Offering free shipping is not a problem. The problem is that mandating your suppliers subsidize free shipping and don't sell for cheaper prices elsewhere is blatantly anticompetitive, and has the effect of raising consumer prices on non-Amazon markets.
- helen___keller 3y ago
  I agree with that, and I think buy box suppression should be stopped. I’m just responding to the opening paragraphs of the link (and some near the end) where the author appears to be arguing against the very conception of free shipping as if it’s something that can only be offered in distorted and monopolistic markets.

granzymes 3y ago

I think a physical retail analogy would be to imagine that every store charges a variable "restocking fee" based on how much it costs to get a replacement for the item that you are purchasing. You don't know what that fee will be until the clerk is ringing you up. Then one day a store decides to bake the restocking fees into the price, and no longer surprises the consumer with a variable fee at the checkout counter. This is clearly a win for consumers, who can now shop the aisles knowing exactly what they will pay for the item upfront before they put it in the cart and go to check out.

hyeonwho22 3y ago

Offering free shipping is not a problem. The problem is that mandating your suppliers subsidize free shipping and don't sell for cheaper prices elsewhere is blatantly anticompetitive, and has the effect of raising consumer prices on non-Amazon markets.

helen___keller 3y ago
I agree with that, and I think buy box suppression should be stopped. I’m just responding to the opening paragraphs of the link (and some near the end) where the author appears to be arguing against the very conception of free shipping as if it’s something that can only be offered in distorted and monopolistic markets.