Amazon Accused of Cheating Customers Through Shipping Costs
gma.yahoo.com
gma.yahoo.com
My wife is an Amazon seller and yes when she ships prime she must pay for shipping which would force her to lose money on each shipment so she builds the cost of shipping into the cost of the item. The cost of her taxes are in the item. The cost of her employees are in her item. The cost of software licenses are built into the item.
The only thing you get with FREE shipping is a receipt that doesn't include shipping as a line item. Someone has to pay the driver, buy the truck, and put fuel in it, pay for the insurance, etc, etc, etc. It can't possibly be free.
It is news to me that this is not the way things work.
I mean really people, I hate to sound condescending, but... when you do a "buy one get one free" do you really think you got something for free?
Maybe one day we'll all get free healthcare and free schools and freeways too. Don't kid yourself, you're paying for them.
Remember the classic EBay scam back in the old days? You'd sell some widget for $5, with $25 shipping. Commissions were calculated on the item cost and excluded shipping.
Also, Amazon is making rule/practice changes that are eroding the benefit of Prime. In 2010, they would send products to me that weren't in east cost warehouses via 2nd Day air. These days, they usually just deliver it late.
Building shipping into the cost like Prime however, might do the reverse and expose a seller to over-refund issues where they would lose more on a refund if it must include the total item price without shipping. (When shipping is "free" and built in to the item price.)
To reiterate the parent comment: No, but we are paying a non-trivial fee for Prime membership every year. Is it unreasonable to have thought that part of that fee would go to offsetting shipping fees to the original seller?
I found your post informative in that, no, in fact it does not. That was definitely news to me. But no need to be condescending about it.
The real issue here is that amazon is accepting the $79 fee, but not passing any of it to their third party retailers, whose offers are still labelled as "prime" (when they are not).
In practice, though, it does appear to be more than that. The vast majority of the time, the difference between the total cost if I buy from someplace without free shipping, and the total cost if I buy from Amazon with free shipping, is very close to the amount on the "shipping" line item at the first place.
It is just an illusion, as you say, but they made the illusion so good that I cannot usually tell the difference from reality when I'm comparison shopping for something.
Notice it's the same exact item#
Not logged in : $19.23 + 6.99 shipping
When Logged in: $27.85 + free shippingIn the first screenshot, it's being sold by Infutech, Inc. In the second it's being sold by Amazon themselves.
In other words, this is EXACTLY the behavior I want as a customer.
eg - The example used in the article is $10 + $3.99 shipping, vs $13.99 on prime. What they fail to mention is that $10 + $3.99 for 5-8 day shipping is not equivalent to $13.99 for 2 day shipping.
I'm not saying I love it, but I never once believed I was paying upfront for free shipping when I bought prime. I was paying for an upgrade to 2-day shipping. The 2-day upgrade may not seem like much now, because items ordered on Amazon often still show up in 2-3 days without it, but that was not the case a few years ago when items normally took 5+ days to show up on my doorstep.
1. Buy the item from Vendor X for $19.99 with Prime "free" shipping (fulfilled by Amazon) 2. Buy the item from Vendor X for $14.99 with $4.99 shipping (not fulfilled by Amazon)
If so, then I would still choose the Prime option. Items that are fulfilled by Amazon fall under Amazon's support and return policies, which are excellent. Third-party sellers not selling under those terms tend to have much less favorable customer protections.
Obviously those protections (and the integrated shipping) come at a cost, but my point is that there is more to it than just "free" vs. non-free shipping.
Further, the new notice (and it really is new, it came sometime in the last 4 months) does not in any way absolve Amazon from cheating its customers.
They promised me that I could pay an upfront fee of ~59 dollars, and get free shipping on a wide variety of items for a year. Instead they took the 59 dollars, raised the prices of the items by approximately what shipping would have cost, and called the shipping free.
They deserve the lawsuit.
> “The bottom line is the free shipping that Amazon offered to its Prime members wasn’t free,” said Kim Stephens, attorney for one of the plaintiffs, adding that he was “shocked” by Amazon’s alleged pricing practices.
No kidding it isn't free, it costs $79/year (now $99).
> "For example, if the price of an item is advertised for $10 with $3.99 shipping and the [vendor] wishes to match or top their price, the [vendor] would charge $13.99 or higher," Burke alleges in the suit.
Exactly.
If you are selling something for $5 as a non Prime seller, and Amazon charges $3.99 for you to ship it (which they reimburse you for BTW), then why would I as a Prime seller not list my product for $8.99 due to the fact that I will be maximizing my profit, and have the benefit of having my merch sent to the customer in 2 days? I could just list it for $5 to be sure I can sell the item by undercutting, but I'd like to barely undercut the current highest price.
Also I see others complaining about shipping, it seems you all must live in the worst cities for mail carriers. I've had Prime for the last 3 years, and have been ordering from Amazon since 1999. This year I have 31 orders placed, 2013 I placed 86 orders, 39 orders in 2012. I can only remember one item in all this time which missed a delivery date (by a day).
If the price of those items increases by the cost of shipping, after you've payed the $79, Prime is now a sunk cost of $79 that has ZERO returns.
This is the basis of the lawsuit, this is very easy to understand.
Amazon should be covering the shipping cost associated with Prime items, Instead they collude with sellers to make them "Prime eligible" and those sellers increase prices by the cost of shipping. That's a scam.
I've had prime since it's inception, I have 500+ orders on my amazon account. It used to be a great deal, it's basically just a scam to get you to use their video service now.
Lawsuit and legality aside, for those of us that use Prime primarily for the shipping this reduces the value of the service while reducing the cost to Amazon of providing the service.
Not to mention that several of the items that I purchase are 'add-on' items, which means that I need to accumulate $25 worth of items to ship them (which is pretty much what every non-prime member does too)
Staffing a warehouse requires a lot of foresight. Overhead has to be kept lean and demand is very seasonal. Amazon forecasted their largest holiday season ever and staffed accordingly but the information they used to forecast the post-holiday slowdown assumed trends would be roughly similar to previous years. It turns out that this holiday season was a sort of tipping point for consumers acceptance of online purchasing and post-holiday demand barely dropped. All that seasonal labor had been let go but they needed to bring on a large number of permanent employees which takes time.
I don't think it takes ~3 months to find the necessary workforce but I think it explains some of the issues Amazon has been experiencing lately.
As for permanently bulking up, I can think of at least several factors:
First Amazon has to realize there's been a permanent change in behavior, vs. e.g. more people doing late holiday shopping.
Then they have to figure out how to address this.
And there are no doubt classes of temp employees who wouldn't be interested in permanent jobs; I'm particularly thinking of the ones who travel around in RVs and stop by an Amazon warehouse for the Christmas season for that sort of work. Many if not most are probably gone by now.
Besides that do you live in a rural area far from an airport or something? Im wuite surprised that fedex/ups regularly cant reach you in two days.
Another slightly off-topic gripe about prime I haven't seen much flak regarding is shipping things like a roll of duck tape in a 12x16" box full of packaging bags. I'm guessing they shipped from a different warehouse from the rest of my order but still wasteful, what can you do though?
I don't know if there's a lot Amazon can do about that. There's big mountains in the way. You're looking at quite a few extras hours in transit compared to a place closer to the warehouse. (Even with using planes)
[1] https://www.amazon.com/gp/help/customer/display.html?nodeId=...
These USPS shipments often show tracking information that refer to handing the package off to a "shipping partner". They don't say who they're using, and then things go dark on the tracking information until it gets to a post office.
The other thing we all are forgetting is that prime membership is more than just "free" 2 day shipping, it includes Instant Prime Video streaming. something many people don't seem to care about. Perhaps Amazon needs to break the two offerings out? Prime Shipping ~ $59 / year, Prime Videos ~ $59 / year, Prime Both ~ $99 / year?
My wife and I were comparison shopping around and she saw something on amazon (she wasnt logged in) but when I loaded that item on my computer (I was logged in) the price jumped up $10 and was available with prime shipping
It was still the cheapest we found, so we bought it anyways. But now we comparison shop more.
Such a PITA of a dance to compare Amazon, Costco, and local grocery/big box