Nowadays, everybody expects free shipping on pretty much everything they order online. Even five years ago, this wasn’t so much the case. Amazon Prime, you have spoiled us.
If you’re looking for major ticket items, like restaurants equipments or large appliances, the cost of shipping can be daunting. Free shipping seems like the perfect answer to saving money on your new walk-in cooler.
But are you really saving any money?
Why Stores Offer Free Shipping
1. Advertising and Enticement
The main purpose behind websites advertising “free shipping” on their products is to draw in potential customers.
Let’s say, for example, you’re looking for a sushi making kit, and you find about ten thousand results. The top three results are those annoying ads on Bing, but the second one specifically says “free shipping on all orders over $35.”
You’ve budgeted about $25 for the new kit, but if you can get free shipping, that deal sounds pretty good.
You click on the ad that advertises free shipping, rather than the one other guy, who doesn’t mention free shipping.
2. Customers Spend More Than They Planned
Many sites advertise that customers will receive free shipping on orders that hit a certain threshold amount. Often times, customers will actually wind up spending more money to reach that minimum threshold than intended.
For example, if you’re buying gifts for your spouse who loves to cook, you might see that if you go just a little over the budget, you can get free shipping.
That’s totally worth the extra $20 above budget. After all, you’d spend that much on shipping anyway. And now you’ve gotten the sushi making kit and a service set for two for the price of shipping.
You wind up spending $50 instead of the budgeted $30 because free shipping only hits at that $50 mark.
3. “Free Shipping” Means Charging More for Merchandise
While we’d all love to think that we get shipping for free, the reality is that companies who offer free shipping have to make up the money somewhere else. The only place to do that is in the price of their merchandise.
If you’re planning to buy a new knife set online, you’re looking for the best deal. And when you see that one set of knives from Merchant X costs $100, but charges $25 for shipping, you are likely to look elsewhere for someplace that doesn’t charge for shipping.
You come across Merchant YX who sells a similar set, of similar quality for $145, but there’s no shipping charge. You click the “buy” button.
There’s just something about getting something for “free” that draws us in. We seem to assume that that extra $45 means the product is worth more because the company would only charge more for something if it’s really worth the price difference of the competitor.
Look at the Real Price
So, whether you’re getting restaurants equipments, personal care products, or home and garden items, be sure to look at the real price. Don’t just purchase something from one retailer because they’re offering free shipping. They could actually be charging you a lot more in the end.