VisorCentral.com - Free Shipping Prediction

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Posted by robert sibell on 11-18-2001 10:45 PM:

Free Shipping Prediction

It is my prediction that in the future almost all online stores will provide free shipping. Most site do it if you buy over a certain amount of money, or for a few months they will have free shipping on all orders. And just a few years ago, you normally had to pay shipping on all online orders.

Dont you think this is a reasonable prediction?

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Posted by homer on 11-18-2001 11:30 PM:

quote:
Dont you think this is a reasonable prediction?

There's no such thing as 'free' shipping. You either pay for it outright, or you pay more for the product you are purchasing.

I think it is abundantly clear that gimmicks like 'free shipping' left when the dot-com bubble burst.

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Posted by robert sibell on 11-18-2001 11:39 PM:

Damnit, i cant believe i forgot about that. Like the free toy in the cereal box or the extra free 5lbs of dog food.

Posted by MarkEagle on 11-19-2001 12:36 AM:

Actually, I believe many online retailers will be able offer "free" shipping without necessarily raising their prices. UPS and FedEx (among others) offer tremendous discounts to high-volume shippers. This can be in the low single-digit percentages of product cost. It's when shipping gets to be more than 10% that the bean counters get antsy.

How do I know this? By day, I'm a warehouse manager (What?... You thought I spent ALL my time here? ). My company ships approximately 200 UPS package per week and we're getting better than a 15% discount. Our shipping terms are prepaid and add, meaning we bill the freight on the invoice. Of course, we bill at the book rate and pocket the savings.

Most companies I've dealt with jack up the freight charges considerably. I received a US Postal shipment from a major retailer that charged me 8.50 for shipping... the box had postage for 1.25. They made an additional 7.25 just for doing business with me, not to mention the product mark-up!

I know of companies that ship 1000, 3000, even 5000 packages per day... imagine the discount percentages they receive... so it's not impossible to fathom the idea of "free shipping".

That said, I also remember momma tellin' me "there ain't no such thing as a free lunch..."

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Posted by robert sibell on 11-19-2001 01:08 AM:

quote:
Originally posted by MarkEagle
That said, I also remember momma tellin' me "there ain't no such thing as a free lunch..."

haha, my parents still say that

Posted by homer on 11-19-2001 01:56 AM:

I suppose I should have phrased that better.

My point is not that companies CAN'T offer free shipping, it's that online companies simply can not afford the big promo deals that they tried last year.

This is the year where dot-coms have needed to make actual profits. The days of 'free this/free that' online are over.

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Posted by MarkEagle on 11-19-2001 02:33 AM:

quote:
Originally posted by homer
The days of 'free this/free that' online are over.

As compared to past practices, yes, I'd have to agree. The bottom line is, however, that e-tailers still need an advantage over the b&m's in terms of overall price. It still irks me to save a few bucks on a purchase price only to have it and more gobbled up by shipping & handling charges.

With the holiday season upon us, I'd be more than willing to do ALL of my shopping online... if it were less than or at least equal to what I'd pay at the local mall. For e-tailers to please the masses, this is a requirement IMHO. I suspect many others are like me... not willing to "pay" for the convenience of online shopping.

Also, I'm not so sure that the dot.com fallout was the result of free shipping or other gimmicks... a poorly managed business (and many of them were) will fail whether it's in the real world or cyberspace.

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Posted by homer on 11-19-2001 03:50 AM:

quote:
I suspect many others are like me... not willing to "pay" for the convenience of online shopping.

Well, that's sort of my point. These etailers can not appeal to you. They loose money when they try to win your business with lower prices or free shipping. That's one of the reasons the dot-com bubble burst...too many companies were expecting people would shop online just because they could. They sold at a lost to win customers only to learn that these customers (like most customers) were loyal only to price.

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