The myth of free shipping.

Lots of places are advertising free shipping.. but someone is still paying FedEx, UPS or the post office.

To understand what is happening you have to look at how they are shipping it and what they are shipping.

For the first example lets look at a purchase of a book. A book it not time sensitive, it can take a week or two to get to where it needs to be and it’s still a book. Places like the larger book stores have warehouses around the country and the book is shipping using the least expensive way possible. In this case the shipping may actually be less that a dollar, no big deal.

Next lets look at a clothing purchase, some jeans, a few t-shirts… again it is not time sensitive, it’s shipped by the least expensive method possible and the shipping was probably less that you would have gotten last year with a discount coupon.

So basically shipping things by slow/ground methods are pretty inexpensive but it’s not for time sensitive items. Perishable items need to be shipped so they arrive before they melt or go bad and that pretty much rules out the really cheap shipping. You could guess what a shipment of ice-cream would look like if it took a week to arrive.

All the ‘free shipping’ offers have created the impression that all shipping should be free, but when you are comparing ground (slow) and express(overnight) the shipping is not in the same class. When you ship a package using an overnight service it is sent by air and jet fuel is not cheap.

In an age when the airlines are charging $50 to check luggage, the undiscounted rate for sending a package cross country is about the same. If you ship a lot of packages (like we do) you get a discount from the base rates, but past a certain point there are no more discounts from the carriers.

Everybody has heard the phrase “there is no such thing as a free lunch”, and in the case of overnight shipping and perishable products it’s true. In the perishables industry the various companies are “simulating” free shipping in one of three ways:

1) Raise the prices, yep when the cost of the product price has been raised to cover the cost of the shipping the shipping is then ‘free’. You actually don’t save any money this way, it may even cost you more because now that the product cost includes the shipping you may end up paying tax on the price including shipping.

2) Cut the cost of the product, packaging and the shipping cost by using a 2 day service rather than an overnight one. Cheaper ingredients and shipping so that it arrives later gives the product a extremely short shelf life and no ‘cushion’  in case of carrier or weather delays.

3) Changing the product mix or limited item free shipping, the ads say ‘free shipping’ but it’s on limited items, those items may only be shipping by the less expensive methods or already have the cost of the shipping built in.

When shipping chocolate covered strawberries you need to protect the product from heat and keep them chilled to keep them fresh. Some companies are leaving out the gel pack and shipping the strawberries using a 2 day service. Leaving out the gel pack reduces the shipping cost in two ways, the weight is less and the box does not have to be as big. Without a gel pack to keep the box chilled the strawberries are going to start to go bad very quickly. Would you want to eat strawberries that have been sitting on the kitchen table for two days? Of course not, but that is what 2 day shipping without gel packs is.

So you  can see that ‘free shipping’ really’ is not free someone always pays the UPS/FedEx bill.

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