6 ms·

The Death of Free Shipping

34 points by elsewhen 3y ago

op00to 3y ago
No, I’m not a jerk for fulfilling my side of a consensual, legal commercial transaction. Why would I continue to read this piece when I’m immediately told I’m a jerk? What a garbage way to start an article.
thsksbd 3y ago
The worst about free shipping and easy returns are merchants selling stuff as if it were new even though the packaging is clearly ripped apart.
Spivak 3y ago
https://archive.ph/xWq0o https://archive.ph/xWq0o This article is simping hard for businesses formerly doing the absolute bare minimum to make online shopping viable so they can get out of their expensive storefront leases now just increasing prices without having to say they're increasing prices. The mental gymnastics required to say that the cost of shipping and returns which we've been paying the whole time is something we've been getting undeservedly for free is appalling. > But in a larger sense, the pushback from retailers is a good thing. Free shipping is not actually free. It involves massive, expensive logistics operations and often leaves small retailers at an impossible disadvantage compared with their much larger competitors. The too-easy shipping and returning process consumers have come to expect is harmful to the environment. Oh gag me, free shipping and returns isn't free because corporate daddy is so generous, it's not free because it's baked into the price and consumers have signaled a massive preference for $x+y with free shipping over $x item with $y shipping. Also there's no way in any universe that the cost of getting an item to me physically via my car and a physical storefront is better for the environment than the Amazon or FedEx truck taking what would have been hundreds of trips to the store and making one run for everyone. I don't have a massively efficient logistics network. > They are charging to send stuff back, shortening return deadlines, and refusing to accept some items entirely. Retailers want to dissuade consumers from making returns at all — or at least force them to do it in a more profitable manner, like physically bringing stuff back to stores. Why even bother with the charade? You don't have to offer returns at all and consumers understand that some items are non-returnable like sale items. Well because they need to say they allow returns or else folks won't buy. So you just rug pull by making it difficult while technically saying you still allow returns.
- naravara 3y ago
  > Also there's no way in any universe that the cost of getting an item to me physically via my car and a physical storefront is better for the environment than the Amazon or FedEx truck taking what would have been hundreds of trips to the store and making one run for everyone. I don't have a massively efficient logistics network. Maybe not. But what about walking to the store? And certainly minimizing the number of trips those delivery drivers make by consolidating items instead of doing next-day by default certainly helps.
  - oytis 3y ago
    There is an overhead, including for the environment, to have the store though. Bringing returns to a post office is basically the same for the environment as bringing them to a store, but post office is dedicated to shipping and also multiplexed among multiple retailers and private custers.
    - naravara 3y ago
      No a centralized store is definitely going to be more efficient than needing that logistics train doing last mile delivery for each and every home. They get returns to scale doing so, as well as the fact that they get orders in bulk, meaning less packaging more space efficiencies.
  - deleted 3y ago
    [deleted]
  - earthling8118 3y ago
    If there were stores that were within walking distance I'm sure they would be used more. For a lot of us this isn't true. And often the prices will be higher and with a more restricted selection of items. I think there's a lot of room for improvement here if we can make use of planning more. Consolidating deliveries, local production of goods, and better transportation infrastructure (for items and people)
    - 3y ago
lukevp 3y ago
fast, free shipping is the reason online shopping is dominating retail. If I have to wait a week and pay to return stuff, I’ll just go buy it in person. Then at least I’ve got the perk of it actually going through a legitimate supply chain and probably not being counterfeit and/or unsafe, like many things on Amazon these days.
- grugagag 3y ago
  Good luck finding where to buy in person. All driven out of business
SoftTalker 3y ago
It was never really free shipping, it was built into the price. Consumers like to buy stuff for the price listed, and not see additional fees and charges at checkout.
- sircastor 3y ago
  I was surprised a few years ago to learn that in some parts of Europe, it's common to include the sales tax in the price on the shelf. That makes quite a lot of sense to me, but here in the states shelf prices are often just the sale price - taxes are only shown at checkout.
  - beachy 3y ago
    This is the law in NZ at least. When selling to consumers, you must include the GST in the displayed price. If selling to businesses, you can display the price excluding GST.
  - devanl 3y ago
    Taxes in the US are locality sensitive. The county sales tax rate varies by almost a full percentage between counties where I live, so depending on whether I ship something to my home or to the office, the amount of sales tax due is different.
    - missedthecue 3y ago
      I think it's also worth pointing out that the US doesn't have VAT. In Europe, VAT tax averages over 21%. And this increases even further if you have locally imposed taxes. This substantially impacts purchase price. In the USA, all sales taxes on your item added together are usually just a few percent. (Higher in expensive cities though)
  - jakub_g 3y ago
    I never saw the tax not being included in Europe. The only thing that is not shown up on the shelf is the deposit for beer & soda/water bottles that some countries have (usually around €0.10-0.20 that you get back when you return the bottle).
sircastor 3y ago
For the first time in many years my family cancelled our Amazon Prime subscription. We did it for a lot of reasons, but one of them was the (somewhat obvious) realization that free shipping isn't free, it's just prepaid and subsidized. A quick look at eBay auctions for a given item will reveal (quite quickly) an interesting phenomenon: eBay Sellers will list the same item several times over with different prices, and different shipping costs. They often add up to the same total cost, but clearly buyers have different tolerance thresholds for what they'll pay for shipping vs what they'll pay for a product. Much like with anything else that's "free", it's not free. Someone else is just paying for it (and sometimes that someone is just you)
- paulgb 3y ago
  Between that and the introduction of ads on Prime Video, I’m tempted to cancel as well. I probably won’t yet, but it’s no longer a no-brainer to renew.
  - ostensible 3y ago
    Eh, ads can be blocked. 5% cash back on travel alone on the other hand makes it continue to be a no-brainer. (And Whole Foods if you shop there). Everyone understands that you still pay for free shipping. That’s not the point though. If you have prime your stuff ships first. If you don’t — you pay for shipping and/or have to wait longer. Sometimes on purpose, sometimes not. And then there is a massive list of other affiliate services prime members can use - each one another reason to use prime, if you happen to use those services. I’m actually surprised how cheap prime is considering its value.
    - nytesky 3y ago
      Is there a ceiling on cash back? Some spends $20000 travel gets $1k back vs $400 on traditional cash rewards. That would be competitive but most high rewards have caps?
  - genocidicbunny 3y ago
    Somehow, I've managed to get one of my systems to consistently skip those ads. The screen will go black for a moment like it's trying to load or play an ad but then the video will just resume. This happens with both the freevee stuff, and the regular prime video that now has ads. Pretty sure it's some rule I added to ublock but I haven't spent the time figuring out which exactly. But seems it's still possible to block those ads.
jawns 3y ago
The idea that shoppers are getting shipping for free when they receive "free shipping" is a bit of a tall tale on both the retailer and consumer side. This article talks about the fact that adding an additional shipping charge is painful after years of conditioning customers to expect that charge to be $0. Yet it's not as if retailers have had to eat 100% of that cost in the absence of a separate line item on the order. Consumers are aware that shipping charges are often priced into the base cost of the items, especially from online-only retailers who don't need to maintain the illusion of having the same price in store and online. Personally, I like the idea of baking the shipping cost into the price of the item. (I also like the idea of baking gratuities into the cost of restaurant meals.) And if a company then wants to offer some discount for quantity or loyalty or whatever, that's fine.
- lukevp 3y ago
  I don’t think this is true, at least in electronics. The price in store at competitors is the same as the price on Amazon but with free shipping… I see it more like the shipping costs are similar or less than the overhead of having a brick and mortar store, so it works out anyway.
  - KallDrexx 3y ago
    If you believe the FTC in their current active anti trust case, the reason for this is that if Amazon sees your product for cheaper elsewhere (even if it's the same after shipping), they will down rank your product in search results and add friction to the buying process. Since no manufacturer can risk having no Amazon sales, this means the manufacturer requires a base price that matches Amazon. Amazon recoups free shipping cost through additional merchant markups. This means consumers pay increased prices everywhere, and we are all indirectly paying the free shipping cost even if you walk into a store.
- yojo 3y ago
  Per the article, “free” shipping (and returns) incentivizes inefficient behavior. Instead of grouping your purchases and avoiding speculative purchases, you just buy anything you think you might like, whenever you think of it, and inefficiently ship things one at a time. Even worse, the shoppers who are being thoughtful effectively subsidize the worst actors. My return rate for non-damaged goods is sub 1%, but I pay the “baked in” price of shipping for the average purchaser - the same rate as the person returning 99% of their orders.
nickweb 3y ago
I run a small online store for decal’s for the geek market. When I say small - I mean I regularly only have 4 items listed. Think HANKA Robotics, TARS and the like. I keep my costs to the bare minimum. I started it because I wanted decals no one else was making. I cannot justify feee shipping. In the UK I eat the cost as it is about £1 to ship UK wide. Posting to the US is now around £7. I need to send tracked thanks to the selling platform. It honestly pains me to have to charge shipping - but I could’t do it any other way. I can only imagine the costs that are associated with this for bigger outfits. Heck. Even Amazon has a logistics company now (but I suppose that’s where the Prime premium comes in!)
- gkbrk 3y ago
  Either you charge shipping or you provide "free shipping" and make the products more expensive. Usually the second option is more lucrative because it feels more attractive to customers, and if someone buys from a cheaper-to-ship location or buys multiple products you save more on shipping without passing the savings to the customer.
  - lazide 3y ago
    Alternatively, like Amazon did for many years, you can ‘reinvest your profits’ - aka subsidize shipping on behalf of investors. VCs and many others did the same in Uber, UberEats, scooters, etc. Then they stopped when the Fed started raising rates, as they expected (correctly) that expectations were changing and revenue now mattered more than expected future trajectory.
    - hef19898 3y ago
      Difference is, Amazon did so while remaining profotable and, more importantly, cash flow positive. Operation free cash flow, a detail Uber at al forgot when they tried toncopy the Amazon model.
      - lazide 3y ago
        Notably, I don’t think they forgot. It was an attempt at market dumping using investor cash in order to capture the market. And it kinda worked. Taxi companies took a serious hit. Now we’re seeing more realistic market prices, and investors are getting hit hard. Because they didn’t succeed at getting the monopoly they wanted. That’s the larger picture, IMO.
geor9e 3y ago
This was a low quality clickbait fluff piece. The article did not match the headline at all. It gives the authors vague musings that some online retailers bake the shipping cost into the prices and offer free shipping, as has been the case for decades. It does not give any evidence whatsoever that the trend is going towards paid shipping.
jdblair 3y ago
When I encounter free shipping outside of Amazon, it is usually connected with a minimum purchase amount. Spend €50 or over and shipping is free.
- stkdump 3y ago
  Even on Amazon (in Germany) shipping is free starting at 39€ only. It used to be 19€ a few years back. Often when I add an item to get free shipping, they are then shipped separately anyway (presumably they are stocked in a different logistics center), so it's not as if this whole thing reduces actual shipping overhead. They are just selling me more stuff.
kaycebasques 3y ago
TANSTAAFL!
Semaphor 3y ago
Was it general free shipping? Here in Germany, I’m used to certain € thresholds that trigger free shipping, depending on the margins and size of the business. I’ve seen 100 €, but also as low as 20€ and anything in between.
deleted 3y ago
[deleted]
RcouF1uZ4gsC 3y ago
I think I may have a business idea: Instead of shipping items to each individual customer, what if we instead built locations that were stocked with items that customers are likely to buy. Then you can ship things by the truckload to the location. And here is the kicker, you can have the customer come in and select and pay for items they want. This avoids having to do the last mile shopping of individual items to the customer. In addition, the customer can often get (common) items even faster than even next day shipping. What does everyone think? Does this idea have some possibility? Edge computing seems to be starting to get big. Maybe we can call it edge retail?
numpad0 3y ago
One trend in my local Amazon that took me some time to notice was that sellers are no longer selling cheap stuffs at cost - I forgot what it was but let's say there was a little decorative gardening blind cap, and that cap was normally sold at $1.50 at physical stores, and it's $7.50 on Amazon. I was almost buying one of such things, then realized it can't cost that much, and that I can just walk to a physical store that has it to get it instantly. That made me realize that pricing on Internet is now more proportionate to utility than cost to deliver. People in the market for a cap to cover an unsightly pipe in the backyard pays that price, especially under $15 or whatever relative tolerable multiple of local minimum wages.

34 points by elsewhen 3y ago

No, I’m not a jerk for fulfilling my side of a consensual, legal commercial transaction. Why would I continue to read this piece when I’m immediately told I’m a jerk? What a garbage way to start an article.

thsksbd 3y ago

The worst about free shipping and easy returns are merchants selling stuff as if it were new even though the packaging is clearly ripped apart.

Spivak 3y ago

https://archive.ph/xWq0o https://archive.ph/xWq0o This article is simping hard for businesses formerly doing the absolute bare minimum to make online shopping viable so they can get out of their expensive storefront leases now just increasing prices without having to say they're increasing prices. The mental gymnastics required to say that the cost of shipping and returns which we've been paying the whole time is something we've been getting undeservedly for free is appalling. > But in a larger sense, the pushback from retailers is a good thing. Free shipping is not actually free. It involves massive, expensive logistics operations and often leaves small retailers at an impossible disadvantage compared with their much larger competitors. The too-easy shipping and returning process consumers have come to expect is harmful to the environment. Oh gag me, free shipping and returns isn't free because corporate daddy is so generous, it's not free because it's baked into the price and consumers have signaled a massive preference for $x+y with free shipping over $x item with $y shipping. Also there's no way in any universe that the cost of getting an item to me physically via my car and a physical storefront is better for the environment than the Amazon or FedEx truck taking what would have been hundreds of trips to the store and making one run for everyone. I don't have a massively efficient logistics network. > They are charging to send stuff back, shortening return deadlines, and refusing to accept some items entirely. Retailers want to dissuade consumers from making returns at all — or at least force them to do it in a more profitable manner, like physically bringing stuff back to stores. Why even bother with the charade? You don't have to offer returns at all and consumers understand that some items are non-returnable like sale items. Well because they need to say they allow returns or else folks won't buy. So you just rug pull by making it difficult while technically saying you still allow returns.

naravara 3y ago
> Also there's no way in any universe that the cost of getting an item to me physically via my car and a physical storefront is better for the environment than the Amazon or FedEx truck taking what would have been hundreds of trips to the store and making one run for everyone. I don't have a massively efficient logistics network. Maybe not. But what about walking to the store? And certainly minimizing the number of trips those delivery drivers make by consolidating items instead of doing next-day by default certainly helps.
- oytis 3y ago
  There is an overhead, including for the environment, to have the store though. Bringing returns to a post office is basically the same for the environment as bringing them to a store, but post office is dedicated to shipping and also multiplexed among multiple retailers and private custers.
  - naravara 3y ago
    No a centralized store is definitely going to be more efficient than needing that logistics train doing last mile delivery for each and every home. They get returns to scale doing so, as well as the fact that they get orders in bulk, meaning less packaging more space efficiencies.
- deleted 3y ago
  [deleted]
- earthling8118 3y ago
  If there were stores that were within walking distance I'm sure they would be used more. For a lot of us this isn't true. And often the prices will be higher and with a more restricted selection of items. I think there's a lot of room for improvement here if we can make use of planning more. Consolidating deliveries, local production of goods, and better transportation infrastructure (for items and people)
  - 3y ago

lukevp 3y ago

fast, free shipping is the reason online shopping is dominating retail. If I have to wait a week and pay to return stuff, I’ll just go buy it in person. Then at least I’ve got the perk of it actually going through a legitimate supply chain and probably not being counterfeit and/or unsafe, like many things on Amazon these days.

grugagag 3y ago
Good luck finding where to buy in person. All driven out of business

SoftTalker 3y ago

It was never really free shipping, it was built into the price. Consumers like to buy stuff for the price listed, and not see additional fees and charges at checkout.

sircastor 3y ago
I was surprised a few years ago to learn that in some parts of Europe, it's common to include the sales tax in the price on the shelf. That makes quite a lot of sense to me, but here in the states shelf prices are often just the sale price - taxes are only shown at checkout.
- beachy 3y ago
  This is the law in NZ at least. When selling to consumers, you must include the GST in the displayed price. If selling to businesses, you can display the price excluding GST.
- devanl 3y ago
  Taxes in the US are locality sensitive. The county sales tax rate varies by almost a full percentage between counties where I live, so depending on whether I ship something to my home or to the office, the amount of sales tax due is different.
  - missedthecue 3y ago
    I think it's also worth pointing out that the US doesn't have VAT. In Europe, VAT tax averages over 21%. And this increases even further if you have locally imposed taxes. This substantially impacts purchase price. In the USA, all sales taxes on your item added together are usually just a few percent. (Higher in expensive cities though)
- jakub_g 3y ago
  I never saw the tax not being included in Europe. The only thing that is not shown up on the shelf is the deposit for beer & soda/water bottles that some countries have (usually around €0.10-0.20 that you get back when you return the bottle).

sircastor 3y ago

For the first time in many years my family cancelled our Amazon Prime subscription. We did it for a lot of reasons, but one of them was the (somewhat obvious) realization that free shipping isn't free, it's just prepaid and subsidized. A quick look at eBay auctions for a given item will reveal (quite quickly) an interesting phenomenon: eBay Sellers will list the same item several times over with different prices, and different shipping costs. They often add up to the same total cost, but clearly buyers have different tolerance thresholds for what they'll pay for shipping vs what they'll pay for a product. Much like with anything else that's "free", it's not free. Someone else is just paying for it (and sometimes that someone is just you)

paulgb 3y ago
Between that and the introduction of ads on Prime Video, I’m tempted to cancel as well. I probably won’t yet, but it’s no longer a no-brainer to renew.
- ostensible 3y ago
  Eh, ads can be blocked. 5% cash back on travel alone on the other hand makes it continue to be a no-brainer. (And Whole Foods if you shop there). Everyone understands that you still pay for free shipping. That’s not the point though. If you have prime your stuff ships first. If you don’t — you pay for shipping and/or have to wait longer. Sometimes on purpose, sometimes not. And then there is a massive list of other affiliate services prime members can use - each one another reason to use prime, if you happen to use those services. I’m actually surprised how cheap prime is considering its value.
  - nytesky 3y ago
    Is there a ceiling on cash back? Some spends $20000 travel gets $1k back vs $400 on traditional cash rewards. That would be competitive but most high rewards have caps?
- genocidicbunny 3y ago
  Somehow, I've managed to get one of my systems to consistently skip those ads. The screen will go black for a moment like it's trying to load or play an ad but then the video will just resume. This happens with both the freevee stuff, and the regular prime video that now has ads. Pretty sure it's some rule I added to ublock but I haven't spent the time figuring out which exactly. But seems it's still possible to block those ads.

jawns 3y ago

The idea that shoppers are getting shipping for free when they receive "free shipping" is a bit of a tall tale on both the retailer and consumer side. This article talks about the fact that adding an additional shipping charge is painful after years of conditioning customers to expect that charge to be $0. Yet it's not as if retailers have had to eat 100% of that cost in the absence of a separate line item on the order. Consumers are aware that shipping charges are often priced into the base cost of the items, especially from online-only retailers who don't need to maintain the illusion of having the same price in store and online. Personally, I like the idea of baking the shipping cost into the price of the item. (I also like the idea of baking gratuities into the cost of restaurant meals.) And if a company then wants to offer some discount for quantity or loyalty or whatever, that's fine.

lukevp 3y ago
I don’t think this is true, at least in electronics. The price in store at competitors is the same as the price on Amazon but with free shipping… I see it more like the shipping costs are similar or less than the overhead of having a brick and mortar store, so it works out anyway.
- KallDrexx 3y ago
  If you believe the FTC in their current active anti trust case, the reason for this is that if Amazon sees your product for cheaper elsewhere (even if it's the same after shipping), they will down rank your product in search results and add friction to the buying process. Since no manufacturer can risk having no Amazon sales, this means the manufacturer requires a base price that matches Amazon. Amazon recoups free shipping cost through additional merchant markups. This means consumers pay increased prices everywhere, and we are all indirectly paying the free shipping cost even if you walk into a store.
yojo 3y ago
Per the article, “free” shipping (and returns) incentivizes inefficient behavior. Instead of grouping your purchases and avoiding speculative purchases, you just buy anything you think you might like, whenever you think of it, and inefficiently ship things one at a time. Even worse, the shoppers who are being thoughtful effectively subsidize the worst actors. My return rate for non-damaged goods is sub 1%, but I pay the “baked in” price of shipping for the average purchaser - the same rate as the person returning 99% of their orders.

nickweb 3y ago

I run a small online store for decal’s for the geek market. When I say small - I mean I regularly only have 4 items listed. Think HANKA Robotics, TARS and the like. I keep my costs to the bare minimum. I started it because I wanted decals no one else was making. I cannot justify feee shipping. In the UK I eat the cost as it is about £1 to ship UK wide. Posting to the US is now around £7. I need to send tracked thanks to the selling platform. It honestly pains me to have to charge shipping - but I could’t do it any other way. I can only imagine the costs that are associated with this for bigger outfits. Heck. Even Amazon has a logistics company now (but I suppose that’s where the Prime premium comes in!)

gkbrk 3y ago
Either you charge shipping or you provide "free shipping" and make the products more expensive. Usually the second option is more lucrative because it feels more attractive to customers, and if someone buys from a cheaper-to-ship location or buys multiple products you save more on shipping without passing the savings to the customer.
- lazide 3y ago
  Alternatively, like Amazon did for many years, you can ‘reinvest your profits’ - aka subsidize shipping on behalf of investors. VCs and many others did the same in Uber, UberEats, scooters, etc. Then they stopped when the Fed started raising rates, as they expected (correctly) that expectations were changing and revenue now mattered more than expected future trajectory.
  - hef19898 3y ago
    Difference is, Amazon did so while remaining profotable and, more importantly, cash flow positive. Operation free cash flow, a detail Uber at al forgot when they tried toncopy the Amazon model.
    - lazide 3y ago
      Notably, I don’t think they forgot. It was an attempt at market dumping using investor cash in order to capture the market. And it kinda worked. Taxi companies took a serious hit. Now we’re seeing more realistic market prices, and investors are getting hit hard. Because they didn’t succeed at getting the monopoly they wanted. That’s the larger picture, IMO.

geor9e 3y ago

This was a low quality clickbait fluff piece. The article did not match the headline at all. It gives the authors vague musings that some online retailers bake the shipping cost into the prices and offer free shipping, as has been the case for decades. It does not give any evidence whatsoever that the trend is going towards paid shipping.

jdblair 3y ago

When I encounter free shipping outside of Amazon, it is usually connected with a minimum purchase amount. Spend €50 or over and shipping is free.

stkdump 3y ago
Even on Amazon (in Germany) shipping is free starting at 39€ only. It used to be 19€ a few years back. Often when I add an item to get free shipping, they are then shipped separately anyway (presumably they are stocked in a different logistics center), so it's not as if this whole thing reduces actual shipping overhead. They are just selling me more stuff.

kaycebasques 3y ago

TANSTAAFL!

Semaphor 3y ago

Was it general free shipping? Here in Germany, I’m used to certain € thresholds that trigger free shipping, depending on the margins and size of the business. I’ve seen 100 €, but also as low as 20€ and anything in between.

deleted 3y ago

[deleted]

RcouF1uZ4gsC 3y ago

I think I may have a business idea: Instead of shipping items to each individual customer, what if we instead built locations that were stocked with items that customers are likely to buy. Then you can ship things by the truckload to the location. And here is the kicker, you can have the customer come in and select and pay for items they want. This avoids having to do the last mile shopping of individual items to the customer. In addition, the customer can often get (common) items even faster than even next day shipping. What does everyone think? Does this idea have some possibility? Edge computing seems to be starting to get big. Maybe we can call it edge retail?

numpad0 3y ago

One trend in my local Amazon that took me some time to notice was that sellers are no longer selling cheap stuffs at cost - I forgot what it was but let's say there was a little decorative gardening blind cap, and that cap was normally sold at $1.50 at physical stores, and it's $7.50 on Amazon. I was almost buying one of such things, then realized it can't cost that much, and that I can just walk to a physical store that has it to get it instantly. That made me realize that pricing on Internet is now more proportionate to utility than cost to deliver. People in the market for a cap to cover an unsightly pipe in the backyard pays that price, especially under $15 or whatever relative tolerable multiple of local minimum wages.