Free
Shipping Is Not Really Free!
We all love really love free
shipping but let’s face the truth. Like free appetizers at a restaurant,
the cost is either baked into the prices of the products, or it's part of a
strategy to increase a customer's order size. Knowing the biases of the
customer base, and how good free shipping makes them feel, increasing product
prices by a small, unnoticeable amount is occasionally the strategy
retailers will use to offer the incentive and cover their costs. Often, the
lack of quality customer service is the most common way for a company to
reabsorb the costs associated with free shipping. Time after time, consumers swap
horror stories of customer service phones that just ring and ring, disconnect
over a period of hold time, or messages that go unanswered. For many small
online retailers that are trying to compete with powerhouses like Amazon,
Target and Zappos, this is the easiest tactic to stay in the game. Another
strategy retailers employ is requiring a minimum purchase in exchange for free
shipping. Processing larger orders costs companies less than filling a
multitude of smaller purchases. Consumers, attracted by the offer of free
shipping, purchase more, which reduces overhead costs and allows the retailer
to reabsorb the shipping costs. The customers who don’t purchase enough to
waive the shipping usually wind up paying a slightly inflated shipping fee to
make up the difference. Again, the money has to come from somewhere. Someone
has to pay the cost of shipping. If customers or investors aren’t footing the
bill, e-commerce companies could easily lose money on every free shipment.
That’s sustainable if a new round of financing is coming; otherwise it can
plunge a retailer or e-commerce company, especially a smaller one, into
financial oblivion. In fact, free shipping was partly responsible for one of
the most prominent crash-and-burns of the 1990s dotcom boom. Pets.com, whose
commercials are still seared into the consciousness of many readers of a
certain age, offered free shipping on expensive-to-ship dog food. In his
book Thinking Inside The Box, author Kirk Cheyfitz explained how
low profit margins due to an insistence on free shipping helped sink Pets.com.
The goal at East Coast Truck & Trailer Sales is to remain in
business for years to come while providing auto transport and towing
professionals the lowest price to-the-door in the industry. We’re not going to
build our shipping costs into the price of our products or make those who
purchase less pay more for shipping. Like the great retailer Walmart, we
provide our customers “Always Low Prices”, competitive shipping and expert
service. Our bottom line is clearly the lowest. See for yourself – shop car hauler parts, auto transport straps, car carrier loading ramps, height sticks, and our exclusive Rail Glide dry lube at Parts.ECTTS.com and
compare.
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