Free Shipping -The Great Manipulator.
It is well known that human beings suffer from loss-aversion issues that are both psychological and neurological, often commonly referred to as the “Pain of Paying”. Companies, from the early days of mail-order catalogs to many present internet retailers, have developed and refined strategies that manipulate these human traits. Free shipping is the very best example of how these traits are manipulated. Everyone knows that nothing ships for free. Yet everyone seems to love “free shipping”.
Free shipping nonsense. Everyone pays for shipping, but not always in the way you may think. In the simplest manipulation, the cost of shipping is included in (added to) the selling price of the product. These products should really be listed as shipping included instead of free shipping. This system works when products are light weight and can be shipped in flat rate packaging to any address in the country. When this manipulation is employed for heavier truck freight products, customers purchasing the product are often subsidizing the shipping costs for other purchasers of the same product. The total price paid for a product by each customer, (the landed price), would be the same for all customers regardless if they lived 100 miles away or 2,000 miles away. This is an easy system for a company to use; it sounds good, ordering is simplified, companies can increase their profits by marking up the shipping costs, and the customers, who love free shipping, cheerfully cover all the costs. Good for the company? YES! Good for the customer? NOT SO MUCH!
Dynamic pricing is sometimes employed, where your geographic location is captured when you visit a website and the prices shown to you are different than they may be to a customer in another area of the country. In this free shipping manipulation, you will usually only be subsidizing the shipping costs for other customers in your geographic area. This subsidizing of other customers can still add a substantial premium to the cost of the free shipping product that you would not have had to pay if you were only paying the purchase price plus the actual cost to ship the product only to you.
In other cases, it gets more complicated. The manufacturer or wholesale distributor of the product pays the internet retailer for a portion of the shipping cost through margin guarantees or other fees. The internet retailer (the big ones) may tell a manufacturer that they (the retailer) must realize a certain margin in order to list their products on their website or include them in the algorithms that provide for the searching and highlighting of free shipping products. The internet retailer will provide a regular report back to the manufacturer and any shortfall in the retailer’s margin will have to be paid by the manufacturer. This system often reduces the profit margins of the manufacturer and sometimes even results in negative margins. To compete and stay alive the manufacturers must maintain their own margins, so something has to be cut. USUALLY QUALITY! In this manipulation, the customer is probably really getting free shipping, BUT, the quality of the product(s) may not be what they expect. The manufacturer may also choose not to cut anything but simply raise the price to cover these fees. When this happens; the price with free shipping may be significantly higher than the product price plus the separate shipping cost available from another manufacturer or retailer.
What about minimum purchase requirements? Everybody knows that if free shipping is offered on a certain purchase amount, customers will very often purchase more than they need in order to qualify for free shipping. Manipulation? Yep! Good for the company? Yes! Good for the customer? NO!
In short, there is NO FREE SHIPPING. You will either pay in money or reduced quality or both. Here at TractorWeights.com® we strive to be as transparent as possible. We do offer “free shipping” on some smaller items that fit in flat rate packages and where those shipping costs are the same regardless of where you live. For truck freight, we negotiate the best rates we can get from our carriers and pass that savings on to you. See our SHIPPING FAQ for more information about reducing the shipping cost on your order.
The truck freight industry is not organized or priced in such a manner that free shipping options can be determined and deployed that are good for both the customer and the company. In all of the free shipping methods discussed above, the actual price of the product together with the real shipping cost is unknown (masked) to the purchaser. With product price plus a separate actual shipping charge, to the customer placing the order, the transaction is transparent to all.
Customers can avoid free shipping nonsense by simply comparing the free shipping price of one retailer to another retailer that offers product price plus shipping.
This blog is general information only, representing the opinions of the author, and does not cover all aspects of the subject matter. Use of the information contained herein is voluntary.
