“Free” shipping is not actually free
fastcompany.com
fastcompany.com
1) Add the item to the cart
2) Create an account
3) Enter all my personal info
If your business makes it that much of a hassle to find out what shipping costs (presumably in order to capture sales), I'm indisposed to patronizing it. Transparency and lack of hassle are what I'm after, not free shipping.
There can also be differences of shipping costs for delivering to a business vs a residential address. I've seen shipping costs go up by $3+ when shipping to a buyer's home address instead of his office. The zipcode isn't granular enough to differentiate that.
I believe 2 factors contribute to the extra costs: 1) UPS trucks don't drive the residential streets as often as the main roadways where all the businesses are located and 2) many failed deliveries and repeated attempts because recipient isn't at home -- which costs more in gas, driver hours, etc
EDIT: also, internet proxies screw everything up.
So I certainly prefer when they just ask for a ZIP code.
And weight/dimensions can be determined from a single item but they do not add up linearly with multiple items. Once you've got a 5kg item, adding another may add 5% to the shipping cost. Adding an additional 50g item may add 0%. If it has to ship via air, it could add 5% for a small item, or 500% if it is a large item, independent of weight. Since the first item in your cart typically bears the brunt of the share of shipping cost, they tend to ask for your full cart before estimating shipping, because extrapolating from the first item alone could paint a very misleading picture of how much shipping will cost for multiple items.
There are solutions out there to help with pricing transparency, but they aren't as trivial as you make them out to be and I wouldn't expect a small eCommerce company to know how to do anything outside of directly communicating with carrier APIs.
And yes they should at least offer a no-signup in-cart shipping estimate. Most off the shelf eccommerce sites do. If not, they definitely want to spam your inbox with "come back, we miss you!" messages :)
I used to sell recently discontinued stuff in college (mostly Sun and Apple Powerbooks) on eBay, and most of my business was to places where mainstream vendors couldn't or wouldn't ship.
Exacerbating the problem is that there is a huge variability in shipping prices. The parameter space is huge: residential vs business, single-family home vs multi-family building, location relative to shipping/sorting hubs, incidental delivery density (number of unrelated deliveries near you), handling concerns, signature requirements, size/weight X potential lane shipping options (weight dominates costs in ground lane shipping, physical dimensions dominate costs in air shipping). A 50 lb minifridge delivered to a multi-family residential building with a mail room in the same city as the origin warehouse may cost a carrier $1 to deliver. But if it is delivered to rural wyoming it may cost $40 and if it travels via air shipping you can tack on an additional $100. Estimates formed via simplistic assumptions may end up being inaccurate with standard deviations in excess of 100%. At the level of sophistication of the average customer, giving an estimate of $20 when actual costs are $100 screams bait and switch, whereas an estimate of $100 when actual costs are $20 means that the customer never makes it to checkout. If you aren't within a reasonable ~5% of actual, you can't reasonably provide estimates to the customer.
There is a push by carrier customers to provide estimated estimate accuracy for this reason (businesses want to know how accurate an estimate is if they have incomplete information), but ironically that ends up putting the carriers in the same position: data-validated claims about positive/negative bias in estimate accuracy can basically be considered bait and switch in court, even for large B2B customers with very detailed contracts.
Small companies, depending on your vision of small, are usually pushing this complexity to the carrier via a shipping cost premium or outsourcing fulfillment altogether. I agree that in a B2B scenario, you need to meet whatever standard the contract lays out.
We charge one rate for shipping internationally, and one for shipping domestically. The charge is for the minimum shipping cost we have. We don't recover the full cost of shipping, but it's good enough for us.
You mean directly? Or are you subsidizing purchases for some business building purpose??
(I'm being picky, but look at the headline and article here. They make the incredibly sophisticated point that businesses have to cover their costs somehow if they want to stay in business)
But for our given store, for the vast majority of our orders, the shipping costs come out the same. And from my experience, there's a huge difference in customer behavior between free and flat shipping.
So, it really depends upon which part of the article you want to talk about. Brick & mortar vs internet stores? Well, the cost of shipping that isn't paid by the customer is very small for our site. At our current sales volume, it would probably be less than the cost of renting commercial space.
Obviously, this may not apply to everyone.
Whichever way it's calculated, it needs to be based on something the customer cares about.
What the customer cares about is shipping time, and maybe packaging / reputation of carrier.
What the customer ABSOLUTELY DOES NOT CARE ABOUT is where your warehouse is located.
I know I'm in the minority though. End of the day, as long as the item is delivered by the time they promise it doesn't ultimately matter I guess.
Here's a popular site that uses it: http://store.hufworldwide.com/
Let me know what you think...
What kind of draconian world do I live in that I would need to add to the cart to compare prices.
In most cases shipping is a cost that's associated with an order, not with the item. It makes sense to show it in the shopping cart.
In most cases shipping is a cost that's associated with an order, not with the item.
That's true, but they could provide the marginal shipping cost of an item before it's added to the cart:
Shipping(currentCartContents + thisItem) - Shipping(currentCartContents)
In many cases the marginal shipping cost would be 0.
1) we have a minimum amount to hit before the marginal shipping cost is $0,
2) build the shipping cost into our margins, and
3) advertise that the marginal cost is $0.
What if you have multiple tabs open? If you add another product in the meantime then the shipping cost quoted would be totally inaccurate. Could be too high, could also be too low depending on how your order crosses the weight/size thresholds.
Also, that would mean that you have to total up the weights and hit the shipping API for every single page request. Right now you usually only get an icon that tells you "3 items in cart", sometimes not even that much. If you have multiple warehouses this gets even more complex, you essentially have an NP-complete optimization problem. That may not even be possible to do in real time, let alone on every page load.
I just disagree in general over the value of the feature here. There is a lot of potential for misinformation and confusion, and consumers are already trained that they go to the shopping cart to get the shipping price. The shopping cart (the order) is the quantum used for shipping costs and it makes sense to put it there.
Again, to echo others, I hate sites that make me log in and go through the checkout process to get a shipping cost. But there's nothing wrong with going to the shopping cart and typing in my ZIP.
Displaying it as "If you add this item to your current order, it would increase the order's shipping cost by an estimated $0.00" ought to allay any such confusion.
> If you have multiple warehouses this gets even more complex, you essentially have an NP-complete optimization problem. That may not even be possible to do in real time, let alone on every page load.
The shipping cost of the items in the cart could be calculated once whenever the contents of the cart changes, and the number cached. So you'd be doing one shipping calculation per page load, for the contents in the cart plus the item being viewed. And NPC or not, I don't think that would be prohibitively computationally expensive in most cases. After all, people don't typically order thousands of different products, that might ship from any of hundreds of different warehouses, in a single online order. If it made someone more likely to click the "Add to Cart" button on a given item, it might be worth it. And you could have some threshold (number of different products on the order, for example) above which the marginal shipping cost is not calculated and displayed.
If it were about cost and not convenience, Jet's algorithms would've beaten out Amazon.
This seems like bad IA, and visually expensive.
For example, a 2 pack of Sharpie pens is $1.77 with "add-on" shipping, $3.09 from a non-amazon merchant with 1 week shipping, or $6.98 from Amazon for prime 2 day shipping.
If I'm not in a hurry, I can either add it to my cart and keep it there until I find $23 more stuff to purchase, or I can buy the $3.09 product and wait a week for it to arrive.
If I'm in a hurry, I can pay the $7 or keep shopping until I hit the $25 add-on shipping limit (which is usually not too hard to do, I can add laundry detergent or some other consumables that I know I'll need).
What's not to like? Fast shipping if I want it (and am willing to pay for it), slower shipping if I don't.
Still better than making a special trip to Office Max (a 20 minute drive) just to get a pen.
If I need to register in order to find that out, forget it. I'm browsing across multiple stores that I've possibly never visited before and never will again, I'm not going to register to all of them. If I need to add to the cart, you're pushing it. If somebody else can tell me upfront, they're ahead and more likely to win my business.
Based on only my own usage, if I haven't registered to a site I'm obviously not a regular buyer there and am most likely there to just buy a single item.
EDIT: sibling comment pointed out, the origin warehouse may be unknown until you have the full order. so now you're figuring out which warehouse you'd hypothetically ship from if the customer bought each product on the page.
But then again I might not be the target market.
https://www.amazon.com/Fruit-Loom-6-Pack-Tucked-T-Shirt/dp/B...
6-pack for 12. That's $2 each, which is 4 (log 2) orders of magnitude less then $32.
Although, shipping prices can vary based on the total purchase since they aren't perfectly linear and it costs less to ship 5 items together in one package than each of those individually. So, I would say that adding the item to your cart is a requirement, but the rest should not be necessary at all. Also, shipping prices vary based on the total distance so the destination zip code matters as well.
I would say that the best solution would be to put an approximate shipping cost for that item being shipped by itself such that the shipping cost covers ~2 standard deviations for the US. If that were done, 95% of the time that cost would be valid or even less. Only in 5% of the cases would the shipping cost increase. In actuality, it would probably be even less than 5% because of the way supply chains work and where they put warehouses and fulfillment centers. This does lend itself to a possible legal issue, though, because people would claim that the stated shipping price as advertised is not what was actually paid. It would have to be explicitly stated very clearly that the displayed shipping cost before you put it into the cart and enter a destination zip code is just an estimate.
That's all you should need to do. Or have a flat rate for e.g. continental US.
Is this on the product or cart page or both? Do we assume we can use these details to pre-populate the actual shipping form later?
Though I agree that your simple example can work in certain limited circumstances and is something I would love to see on most sites I visit, shipping is one of those things that gets very complicated very quickly.
Edit: Come to think of it. A simple and persistent form displayed on each page that I could fill in at the start of a shopping session that allowed the shipping cost to be displayed alongside the current cart total at all times would be pretty useful. I don't think I've actually seen an example of that.
They must be just trying to piss me off.
Edit: This is likely the result of automatic "value based" shipping calculation. Don't let it create absurd situations like the above, it makes people feel cheated.
As a customer, adding a bunch of additional fees, even if they're reasonable, just makes me feel like I'm being nickel-and-dimed. Tell me the total amount you want me to pay you to get what I want and if it's in my price range I'll happily pay it.
On the other hand, when I know the shipping costs are included in the price, it makes me feel like I'm being gouged on larger orders where the shipping cost per item should be lower.
Jet.com isn't perfect but they're trying some interesting stuff with pricing (e.g. pay more for included returns, or pay less but have to pay shipping if you return, buy items in bulk and get a discount, etc).
Full disclosure: I work at Jet on the pricing team.
That re-aligns the incentives of both parties.
So, back to the point, regardless of whether the price is broken out or bundled, there's really no way to tell how badly you're being gouged. Unless you can find it cheaper someplace else, the only question is whether it is worth it to you at that price.
I'd wager this is true of 85% of companies when it comes to cost savings.
So a retailer with a bulk discount can probably get away with that rate, much higher than around $8 though and people would know it isn't a real rate.
On the flip side, as an eBay seller it's kind of painful to know that if I sell something for $X, shipping is eating $3+ of that - on top of the 10% cut for eBay and the 2% for PayPal. It makes it not worthwhile to me to list anything below $10.
Still as a psychological thing I think customers just prefer to see free and don't think too much about how it could be costing them more. Most of our shipping is free because it seems to give better results, even if the customer ends up paying more in some cases.
Rather than the negative incentive of stacking on fees at the end, stack on discounts. Repeat customers may find this attractive.
Apparently a thing: https://news.ycombinator.com/item?id=12859942
The obvious counterargument to this is, "If you get the user far enough down the purchase funnel and then show them that second hurdle of another fee or explicit shipping cost, they will have already invested enough time and effort into the purchase process that they will then justify that extra cost just before purchasing." This may well be true sometimes, and people will often pay for shipping if you itemize it out of the total price, but I think everyone would agree that this sort of nickel-and-diming practice pisses people off. Pissing people off hurts your brand. It just does.
Businesses often think too short-term when it comes to getting someone to purchase a product online. Yes, they may purchase that first time and pay "extra" for shipping. But do you think they'll come back a second time if they know they're just gonna get pissed off about that darn shipping price again? I'd say they're much less likely to.
What? How on earth is a ridiculously high end Fifth Avenue retail location staffed with models and lots of hired security cheaper than shipping? Their Fifth Avenue location in particular is literally stuffed with expensive glass chandeliers. It's an ENORMOUS property on Fifth Avenue in NYC, the most expensive street in the world; one of their stores alone is worth four billion dollars. If you think "enormous" doesn't merit all caps, its shoe department has its own zip code. http://www.reuters.com/article/us-retail-usa-shoes-idUSN2435...
That's awesome. :)
- I figure the prominence of free shipping has more to do with price fixing by the manufacturers (minimum advertised prices, etc), and perhaps rate secrecy by shipping companies as well. Since walk-in stores build logistics into the price tag, online retailers had to move to that model as well to have comparable prices.
- I still don't believe that direct shipping is three times the cost of brick and mortar fulfillment. I'd really like to see that accounting to make sure that it is including things like the full expense of running a retail store with employees, additional distribution centers, and clearance markdowns. I can see a strong temptation for a traditional brick and mortar retailer to count much of that as necessary overhead for their entire brand rather than attributing it directly to retail sales.
- kind of, I think really Amazon made this the default and did it unprofitably.
- right
I think they are just looking at the logistical costs using truckloads instead of small parcels, etc. The cost of slow moving inventory at a store is much higher than at a distribution center. The economics of a store is much different than the economics of a distribution center. There is a reason products are more expensive at a store than online and it is that the cost basis of running a retail store is higher than running an e-commerce business. This claim is absurdly intentionally misleading.
That's probably a figure for companies which already have brick-and-mortar stores and also ship from those stores. Like Safeway. Companies with big automated fulfillment operations, such as Amazon, shouldn't incur such high costs.
Amazon is changing the world the way Standard Oil changed the world. If it's going in my house and it's not groceries, it's coming from Amazon. The buying and shipping experience is unparalleled. Amazon isn't one of these bespoke SF-only investor-moneygrab services, it's real technological progress on a world scale.
The horse vets found other employment.
The horses, by far and large, were butchered.
The question these days is - which of us are the vets, and which of us are the horses?
Only thing worse is 20 years of financial journalists predicting Amazon's unsustainability and forthcoming demise.
Standard Oil established itself as the nation's tollbooth.
https://www.amazon.com/dp/B000XUDGHG/ref=dp-kindle-redirect?...
At no point was Standard Oil the only purveyor of oil products in the world. They enjoyed a dominant position akin to Microsoft's, but were unable to hold onto it forever.
What Rockefeller eliminated was the refining industry. And he did so starting out as one of those refiners. Just as Amazon was at one point just another online retailer, Rockefeller was once just one of the many many refiners dotting the Cleveland countryside. He did it through his pure, amazing business acumen. He made better products than his rivals, and managed his money better. He built such good relations with the banks that they would pull up to him as he was walking down the street and offer him loan terms.
Industries go through periods of consolidation and breakup all the time. It's just a necessary part of the evolution of the economy and society.
From the government's anti-trust filing:
> Almost everywhere the rates from the shipping points used exclusively, or almost exclusively, by the Standard are relatively lower than the rates from the shipping points of its competitors. Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors.
The cost of transportation is going to plummet as we move to electric and driverless vehicles. Amazon's game is the same as Uber's, lose money and win the market, then sit on your customer base as the same price points suddenly become highly profitable.
But Mr. Schwartz is sure free shipping is an unsustainable trend.
This hasn't been true for a while. For at least several years they've been going in the other direction with free shipping. They've raised the minimum purchase requirement for getting free shipping twice in the last few years ($25 to $35 to $49) and the other way to get "free" shipping isn't free, it's $99/year and you have to make a certain number of orders per year to get it to amortize to a reasonable shipping cost (which still won't be free.)
Returns obviously cost more for an online seller because the outbound shipping becomes a loss, and the return shipping as well, if they cover that.
If shipping is "free", customers closer to the shipping point end up subsidizing customers farther away.
Companies like Fedex and UPS raise their rates, every year, in amounts that far exceed anything logical (cost of living, fuel, etc). Typically, 4 to 5 percent bumps every year.
For online sellers of larger items, these issues can be very significant. Especially large, but lightweight items, as the shipping companies charge "dimensional weight" instead of actual weight. It's easily over $100 to ship a largish, empty box across the US.
Edit: Dealing with shipping damage is another factor. UPS/Fedex compensation for damage is far less than the actual cost to make things right.
Unless it's ridiculous, I can't see even counter rate being that high.
Rack rates: Ground: $130, 2nd Day Air: $471, Overnight: $634
Even a discounted rate is $90 for Ground. And, I don't consider 36"x18"x24" to be crazy large. There are lots of online sellers that ship cardboard, packing peanuts, printed signs, home furnishing, cad routers, etc..that would have far larger packages.
Edit: No...most don't pay rack rates, but even with a discount, it's roughly $90 for ground. Also, if you're using a shipping tool, they often don't show the pricing with dimensional weights. Try the UPS website, and enter your account number + package dimensions (not just weight) to see accurate prices that show your discount. Bottom line is that large packages are expensive, discount or not. Also, the "UPS Store" isn't owned by UPS, they are franchises...they actually charge more than UPS rack rates.
$130 / 10 / 10 = $1.30
I've shipped things twice, in the shipping-company provided boxes. An overnight "medium box" between NYC and LA is on the order of $10. (Hence my "not quite" remark, it was technically more than $6 and for a smaller box. But shockingly cheap nonetheless.)
I used to hear of it being used a lot to ship R/C airplanes cross country. You could disassemble them into a pair of wing assemblies and a fuselage and box them up. UPS/Fedex rates would suck because of the dimensional weight but Greyhound would usually beat them.
If you look at the rates that Amazon pays to replenish FBA warehouses, you see the difference. UPS Ground from Upstate NY to Kentucky for a small parcel costs < $6. Compare that you the UPS "Retail" -- $16-18, or USPS Priority, which is a minimum of $11, depending on rate. IMO, shipping rates are going up because big kahuna customers like Amazon are grabbing all of the capacity and have contracts that allow them to surge instantly.
For example, the cost of shipping me two boxes of cereal is barely higher than the cost of shipping me one box of cereal. The cost of shipping it to Alaska is much higher than the cost of shipping it to New York. In a store, the cost of getting two boxes of cereal to the store is, on average, about twice the cost of getting one box, and the cost is identical whether your customer is from New York or Alaska.
It is likely, if you are ordering one box of cereal, that it is packed in a box with other things and that you get the box with your normal delivery. Heck, with this model, even getting two lawn mowers along with the shipment doesn't change the pricing all that much.
You basically have the same shipping for all 8 boxes of cereal on your shelf.
It is much more true when you ship to consumers - the cost is nearly double if you are sending the 2 boxes to 2 customers. Gotta have separate boxes with 2 labels, because they are going to two houses.
There have been a lot of times that I've paid shipping and handling on something that would be far less than the costs in gasoline of driving to the store and back.
0 Shipping - Free shipping is much less common within and to canada; it's also more expensive, in my experience.
1 Duties/import broker;s fees - Can be tens of dollars, even for items whose value is about that.
2 Taxes - Typically, bringing across items with net value more than ~150USD will have taxes levied (~15%, depending)
3 Straight-up 'gouging' - For example, the exact same book in canada will typically be 10-30% more, even taking into account exchange rates. I'm sure the differences can be partially explained but I've never seen good reasons.
4 Product differences - Cars are a good example here. In the US often the 'base' model will have features CA versions of the same cars require upgrade packages for.
5 Product Choice - The bigger US market means more colours (or colors even), wattages etc to choose from
6 Warranties - I haven't taken a survey but whenever I've checked the US warranties are as good or better.
And that is just CA, EU countries generally have it worse if my UK friends are to be believed.
Someone made a website to show you the pricing discrepancies per location:
http://www.bookdepository.cheap/Lisp-Small-Pieces-Christian-...
I noticed that several times and never understood it.
> They want to factor shipping into the price transparently from the start
I guess if they made it obvious that that's what they were doing (stating their assumption about your destination) it would be fine.
I don't see "free" shipping going away, nor do I see Amazon's new delivery service succeeding where DHL and other have floundered in the past, since you need a certain volume in that business to even be viable, and Amazon has stated they can't push that volume alone to make running a shipping service make sense.
What might happen, and what I hope happens is the lower end, smaller businesses get better next day and 2 day shipping prices. Currently, from one wholesaler I can order a 50lb box of hardware, and UPS charges them $21 to $23 to ship it from Chicago to Seattle in the span of about 18hrs and get it on my doorstep.
Another much smaller vendor I deal with can't get anywhere near that pricing, half that weight/size box will run me $150 easily, with ground (a week and change) being $40 usually for a 25lb box from them.
Edit: Another layer to this is USPS and China Post teamed up a while back and offer Chinese sellers dirt cheap ePacket shipping, where 1lb of goods can be moved to the US for $5, whereas USPS charges $50 to the American seller to ship something to China [1]. Essentially, it makes American online sellers uncompetitive in our own market. This is why people like Trump, since he says he'll put a 35% tariff on foreign imports and end programs like ePacket (not supporting him though, just to be clear).
[1] - https://www.skubana.com/e-commerce-trends/the-usps-epacket-p...
Amazon would be unusable for comparison shopping if you needed to go through checkout to get the full price with shipping.
For the average shopper, pricing in shipping and sales tax will make them buy more online. Breaking out sales tax has caused a 9% sales drop in states Amazon charges sales tax in.
Note it's really "collects" sales tax in. Buyers still, in principle, owe use taxes on the purchase--which individuals often don't pay of course.
I don't think it's so much a matter of whether sales tax is bundled or not though. For big ticket electronics purchases, for example, the same item is often available for the same price with "free" shipping from other online resellers who don't collect sales tax--and is cheaper for many consumers as a result.
Not sure how they are doing that. The UPS rack rate for 50lbs from Chicago to Seattle is $83 via Ground, $161 for 3 day select, $252 for 2nd day air, and $310 for Next Day Air Saver. I can't see $23, even for ground...I don't know of anyone with a discount rate that good.
That was the reason given why you can purchase an item online from a Chinese seller for, say, $1 USD -- including shipping -- and the seller can still profit from it.
A bigger question. If more people took advantage of this free shipping paid for by the Chinese government; how would American companies compete?
(Since I here--Amazon has been slowly raising prices, and people don't seem to notice, or care. I noticed it with portable transistor radios at first, and MR11 bulbs lately. Personally, I'm getting tired of UPS trucks racing up and down my street, filled with a lot of stuff we probally don't need.)
Are you sure that is why? I thought it was because sellers started selling $1 items with $50 shipping and handling fees attached.
Also places where competitors are listed together are hard to browse unless "total cost" is listed explicitly somewhere (having to figure out whether the $19 or $5 with $5 shipping is better is annoying).
However what this article is neglecting is that brick and mortar stores are built where people go to them. The land and building cost money, which the store typically pays for through a lease.
So, yes, shipping isn't free. But having products sit on a shelf in a store in the city isn't free either. Especially if said products depreciate in value and aren't sold quickly.
Basically, look at why RadioShack went bankrupt to see how this can backfire for brick and mortar.
Also, "Free" shipping from China isn't. The cost of shipping from China is subsidized by other countries. I remember reading that the price to ship something from China to your house in the US, USPS gets paid less than it costs them to ship.
Shipping rates from China are up for review soon, and the industry is expecting their rates to be re-adjusted, after which ordering from China will get a lot more expensive...
http://fortune.com/2015/03/11/united-nations-subsidy-chinese...
Edit: "As part of this reform process, China will be transitioned in 2016 into a category for more developed nations, who generally pay higher terminal dues."
Yeah, and this article managed to get an unexpected rise out of me, touching on my experience in municipal finance, leading me to want to yell:
"Right and somebody has to pay the cost of maintaining the infrastructures like ports and airports and roads and I don't see anybody lining up to fork over the cash out of effing altruism these days."
Like, I get it, we all want free stuff, but dwindling tax bases and constant bitching about taxes just avoids dealing with the more practical angles of societal function(s).
Very often I am looking at an item that would cost £5 in a store and it costs £7 with prime. Alternatively I can buy it from a non-prime marketplace seller for £4 + 3 in shipping. Then there is an "add-on item" for £5 where I have to buy at least £30 in total. And finally a 4-pack for £21 with free shipping. Either way I am clearly paying for the shipping.
Out of the standard media-mail $3.99 hardcover shipping price, Half.com gives the seller $3.04. For combined shipping, each additional item costs $2.49 and Half.com gives the seller $1.40.
Out of the expedited $5.99 price, Half.com gives the seller $5.24. For combined shipping, each additional item costs $4.49 and Half.com gives the seller $3.49.
Good luck shipping a textbook for $3, even by media mail. I would hand-wrap each book using some bubble-wrap and kraft paper (a clean paper grocery bag) to save costs on packaging, but shipping alone costs more than the reimbursements. Some of my textbooks are essentially worthless since if I sold for the going price ($0.99) I would actually lose money.
I will often play around with the order to try and maximise against the shipping cost. e.g., I use to order protein bars and would order the maximum number that wouldn’t bump me up to the next shipping class, to get the best value per bar.
My biggest gripe, living in the Antipodes, is that many foreign companies have really expensive shipping costs to ship internationally. I suspect we’re often not a big enough market to make it worthwhile for them to fine-tune the costs, but it still sucks when shipping can be 40-60% of the cost of an order.
e.g. I really want to try out some Death Wish Coffee, but ordering 2 lbs at US$38 plus US$27 to ship to Australia, vs US$6 for US shipping, sucks.
Some places feel like they are really gouging you on the shipping costs. (Not saying that’s the case with the coffee above, just that it costs a lot.)
The exception is businesses that do ship a large amount to Australia. Examples of this are online book and bicycle retailers in the UK and Amazon themsleves in the US. Their lower shipping prices are likely a combination of subsidisation and bulk discounts.
If you want confirmation Death Wish isn't trying to rip you off, compare against the USPS pricing calculator for a similar package. You can also check against what a freight forwarder (who do get bulk discounts) charge, and you'll see it's not much less. I recently got a similar package shipped to me and I remember paying pretty much bang on $27.
For example many items are sold at a fixed MSRP and no retailer will undercut it, but some retailers will offer free shipping while others charge me. That's actually free shipping from my perspective.
The same logic applies retailers that offer "free shipping for orders above $X". Can you argue that the cost is rolled in anyway? Sure, but rational actors think at the margins. The alternative is effectively paying twice for shipping, both the explicit shipping charge and the upcharge rolled into the price. Again, if the prices are competitive the retailer is essentially eating shipping costs for you.
That surprised me. Does anybody have more details as to why that would be?
It's cheaper to get a truck full of stuff to your shop than having trucks all over the country's cities going from door to door to deliver stuff to individual customers.
With a store-based model, I have to pay for retail space and employees; with direct-to-home, my dollars go to pick-and-ship and warehousing. eCommerce scales better because of the capital costs of building out new retail locations (effectively higher out-of-area CAC), but not insurmountably so. E.g., Amazon vs. Walmart.
IE next day air from within (let's call it a few hundred miles) does not cost them $50-75 on a 1 lb package, because the volume discount of any company that does any real amount of shipping is very high.
The shipping cost at a good volume discount is <$15 for something like priority overnight (and the cost at a great volume discount is closer to 7.50).
Even if you consider their cost to make your order slightly special, package it, whatever, it's still complete fiction.
I often see companies with separate shipping tell me something absurd, like it'll be $150 to overnight something. At which point i just tell them to charge my fedex account instead, because it costs ~10-20% of that.
So when i hear "they are having trouble keeping up with costs", maybe that's because they are trying to put too much of their margin into handling fees.
Pet water fountain at PetSmart: $50 Exact same fountain at Amazon: $25
But I've noticed that pet stores (or at least Petsmart) are starting to do price-discrimination by having online-only 'sales'. Purchase online at 25% off, pickup in store.
I don't doubt that's true, but you're not going to get me into the store, so if you want my business you're going to have to ship my purchase to me, so figure out how to make it sustainable. Regardless of how much more expensive mail-order is, it's going to become a larger part of retail business.
I suspect that it's much worse for merchants that have a brick and mortar presence - they are paying a lot of money for those stores, and the incremental cost of serving one more customer is virtually zero, while there's a material cost to pack and ship a package.
They're $40-60 domestically, and looks like San Francisco to Toronto is $125
And it's really efficient. Basically no shipping would take more than a week. Average time would be 3~4 days.
That's also why food delivery is cheap/free in Asia as well as cleaning. I'm an expat in Hong Kong and these people basically own modern slaves. ~$550 + food and shelter for a live in worker that works 6 days per week.
Anyone in the US that touches the delivery process is getting decent money compared to a low skilled Chinese worker.
Also, shipping is not always quick. Sometimes, the merchant doesn't have the item in stock that they listed and rather than delist or tell you, they just leave your order in the system until you contact them. Then they tell you to ask for a refund. I have had it happen multiple times over the past 2 weeks with enterprise-grade network equipment like SFP transceivers and media converters. I even had it happen with a TP-LINK TL-EP110.
In the future I think they'll merge a shop/showroom with collection center. That way people can see products for real while they collect (it'll serve as advertising) and there will be more land for housing to be built due to less stores being around.
But they require real-estate, and in the end the ansolute shipping cost isn't terribly far from home shipping(in urban environments) , and at that difference, people prefer home shipping, in the US.
But parcel lockers are quite popular in the UK, Poland.
In the old days shopping online meant fast delivery because they were selling luxury items in competition with overbuilt brick and mortar retail. Unless you get that music CD tomorrow afternoon, supposedly you'll invest two hours in going to a music store, waiting in line, waiting in traffic, waiting to park, waiting for mass transit, waiting to find your new CD, etc. But it hasn't been 1995 in a long time.
The future will look like my existing amazon subscribe and save delivery, I get periodic deliveries of stuff like shaving cream and toothpaste and all that kind of junk at a huge discount in a giant monthly box and I'm sure amazon makes stacks of cash being able to predict demand into the future and balance across distribution systems. I even buy my looseleaf tea from S+S. So in the future shopping will only be cheap, or at least affordable, if you're willing to wait till the 14th of the month when you get your monthly giant box. Frankly if I had to pay shipping out of my pocket and I didn't have Prime for other reasons, I'd probably wait until my monthly shipment.
UPS spends a lot of time and money driving those trucks all over creation to drop off a tiny little package of nothing at my door, often multiple times per week. Note the USPS was talking some years ago about abandoning 6 day service and going to 4 day deliveries.
My gut level guess is delivery will be like peapod but not food. An amazon warehouse will collect large shipments from all over the planet for a month, then toss my months worth of stuff into an amazon owned reusable shipping bucket, then fill an amazon owned truck with an entire subdivisions worth of buckets, then an amazon employee drives to my subdivision and drops one bucket per house and picks up my empties, and says "see ya next month". Or maybe every week. Or two weeks. I bet people will select neighborhoods based on how often amazon (and perhaps the USPS) service the neighborhood.
Soon, delivery is something a neighborhood will get, not an individual. Just like picking up the garbage is enormously cheaper to hit the whole district every thursday than to dispatch a truck to my house every time I fill one trash bag.
Finally you have the 1%er meme. As the last of the wealth concentrates at the top, you can't have billions of dollars in infrastructure for a quadcopter drone to deliver nothing important to a couple rich people at crazy expense without that world also being full of a hundred times as many people getting wood crates of rice delivered roughly monthly. Perhaps by horse carriage once the cheap oil runs out.
The partial agreement I have with you is the franchised pizza company a block from my house currently for insurance and licensing reasons cannot accept packages for me at their fancy truck dock. That'll change once the owner gets hungry enough for cash. Right now retail establishments, especially chains, are very silo'd and pretend the world outside their franchise or suppliers does not exist. When they get hungry that'll change. The only question is how it'll be financed. So my entire neighborhood uses the pizza restaurant or dive bar as their delivery address... do they rely on me leaving the waitress a tip or buying a round of drinks when I pick up my packages or do they extort money from the delivery company or the sender or maybe even me?
An interesting example of the future being here already is I keep trying to buy into a popular local CSA that delivers to my local food store and I always fail (probably popular because they're awesome). I'm not even sure CSAs are legal in every state. But the future is already here for CSA organic produce, if I ever get to buy in my delivery point is my local independent food store. (I'm told the food store is making fat stacks of cash off the CSA, empty cooler space makes them no money anyway so theres no loss, and people who take possession of heads of tend to buy salad dressing from the store, store sales are booming, etc)
Where it get really bad - when you do NOT have prime - you also get charged extra for shipping, yet seller still pays same cut to amazon! :)
Where the author wonders how a single button, costing less than 5 dollars, can have free shipping from china to france.
In other posts in this discussion, kogepathic claimed that the cost of shipping is subsidized by other countries and webscaleizfun even posted a link to evidence of the US subsidizing the cost of shipping between China/HongKong and the US:
https://news.ycombinator.com/item?id=12857444 https://news.ycombinator.com/item?id=12854573
Maybe France has a similar arrangement. That combined with the markup Aliexpress charges would explain it.
Edit: According to jeromegv's link to the Washington Post, this is by international treaty and almost every country is subject to it:
https://news.ycombinator.com/item?id=12857145 https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...
Consequently, France is subsidizing the shipping costs for AliExpress.
No kidding. I'm having trouble imagining how the cost of free shipments is paid for by the remaining shops, if there are any.
(Amazon Prime is pre-paid, unmetered, not free, shipping)
Their scale also allows them to have multiple warehouses spread across the US, avoiding high cost / long distance shipping of individual items.
They have other levers as well. For example, they cap what third-party listings on Amazon can charge for shipping...often the cap is lower than the actual shipping cost.
Amazon's savings come from it's lack of stores. Retail storefronts are expensive in terms of staff, cleaning/managing, rent, utilities, taxes. A warehouse in rural Indiana has a lower operating cost and can far more efficiently prepare items for customers on a per-worker, per-rent-dollar, per-utility-bill-dollar basis. And at scale, you only have to have a small margin to succeed.
If there's one word I wish we could banish from common usage, it's "free" (as in gratis, not libre).
Discussions around economics and politics would become much more transparent and honest if we used phrases like "taxpayer funded education" and "customer subsidized shipping".
E.g. pay $15 and fill your up your cart. Choose from thousands of items. Each combo has a value, of course. Shipping free.
Have third parties pay to place produce samples inside your boxes. Like Bill messages of the past
The problem with the smaller e-commerce shops is that most people aren't going to subscribe to 3,4,etc... annual service fees...especially for small places.
It took me a while to justify Walmart.com's Shipping Pass fee, but once I saw the huge discounts that I can get on bathroom and household stuff, then I got on board.
I would not attempt a tailored suit over the internet, your local tailor is not likely going to be amused you bought it online when you bring it in for adjustment. My wife can spend a seemingly infinite amount of time trying on different cocktail dresses. Not all stores for all clothes will go out of business. Merely almost all of them.
I'm just calling out that maybe 95% of my clothing was either a gift or purchased online and I've never had the slightest problem. Generally speaking things that involve paying a tailor probably should be purchased directly from a tailor but other than that...
It would be rad if that were the case though
Your local tailor will gladly take these measurements for you. $20 for five minutes of work is easy money. Also, why would a tailor not be amused if you brought them a product and paid them to alter it? Not all alterations are possible of course, but they'll be happy to try. In fact, AFAIK it's common advice that you can get a generic suit from Men's Wearhouse or something and get it tailored up to look nice...
Most tailors are perfectly aware they're competing with mass-produced clothing from Asia. There's some bargains especially if you are only going to wear it once or twice. But in the end you usually get what you pay for, the quality and durability is not as good as from a tailor who did it right.
The other thing is the sizing - a lot of stuff from Asia is sized for tiny Asian people, especially women's clothing is often several sizes smaller than US clothing. But on the other hand sometimes it's department-store clothing that is being sold off-label direct from the factory. I would look at it as largely the same bag in terms of quality. Not every department-store dress is made to last either.