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Comment by nickweb | Hacker News Reader

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!)

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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.

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.

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.

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.

Free shipping carries a lot more risk for the seller from my experience. I used to do free shipping on eBay until I got an order from a tiny U.S. island that cost me big time to send out. I’ve also had orders from non-shippable addresses that force me into much more expensive carriers. These days I always charge shipping from specific carriers now. You can cancel orders as an eBay seller for tricky situations but you get dinged on your account.

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