Free Shipping Usually Comes at a Cost
While there are probably companies that actually eat the cost of shipping when they offer free shipping on their products, many simply increase the cost of the product to create the illusion of free shipping.
Some people may already know the truth behind the “free shipping” promotion, but like the idea of one price tag so they don’t have to calculate additional costs. Others might prefer to know what they are paying for the product as well as the specific cost they are paying for shipping.
Whether the company is truly eating the cost or one of many who raise the rates, “free shipping” as an incentive seems to work for some.
“Over the past few years, free shipping has emerged as a critically important incentive for online shoppers, and its importance has been magnified in the current retail environment,” stated Gian Fulgoni in a press release from comScore, a company that serves its clients by measuring data about technology.
Other online companies seem to be trying to lure shoppers in by a low price only to tack on shipping costs that change the entire equation with a heftier price tag.
There are some companies that probably set really low teaser rates and charge higher than actual shipping costs as well. Ultimately, online shoppers should compare apples to apples and not apples to oranges when considering the price of items.
They should shop around online and compare total costs of items to determine if they are truly getting a better price using one online store over another.
Sometimes, a vendor that offers free shipping is still the better deal. For instance, three different online companies that sell one pound of medium roast 100 percent Kona Coffee charged different prices whether the shipping was included or not.
One site set an amount with free shipping with a second free shipping vendor coming in more than $6 more than the first. Then, there was a third company asking only about $3 more than the first, but had an additional $6.25 for shipping costs.
The cost of shipping on the third company meant that shoppers were going to actually spend about $9 more than the cheapest of the three.
Even though it was more expensive, the third company may charge higher prices due to better service or quality issues so there are many factors that go into price.