What do you think Is Free Shipping Really Free While shopping online, there is no big attractive offer other than ‘Free Shipping’. If it is really free, who pays for the actual shipping cost? Who paid for packaging, forwarding, courier man on behalf of buyer? This is an important factor that all online buyers need to know. There is nothing called Free Lunch.. err.. Free Shipping.
There is no denying fact that the widely used shipping free term has attracted a lot many potential buyers. In US, FedEx and UPS are planning to hire more than 20,000 work forces to meet their shipping needs. The picture is very similar in India too with Flipkart, SnapDeal, Amazon and EBay fighting for the big race. One needs to know who pays for these shipping charges.
History about Free Shipping
In the early days of online transactions, a lot many consumers turned away from shopping as they found to be shipping charges higher than that of the product they bought. This trend showed a decline in online shopping. It prompted the sellers to come with idea of flat shipping charge and free shipping for some regions, in order to retain their customers. The idea spread like wild fire and almost all the online portals started to implement the feature. Initially, not much was thought about the financial burden but the focus was to keep the customer base intact.
The True Picture
According to a recent online study, over 90% of retailers will be offering free-shipping service as it has been also studied that 65% of consumers would cancel the order in absence of such facility. The little secret that retailer does not want the buyer o know is a bit dirty. These charges are passed on to buyer in a different manner. As shipping charge is recurring cost and someone has to pay for it, it has to be the buyer.
How the charges are incurred?
Shipping cost is actually hidden inside the product cost. To substitute the charge, it is reflected in the form of strict return policies and low customer care quality. We all have been reading the stories of faulty products being dispatched or unresponsive call centers. These are though little tricks on how small retailers lure to buy products. However, it does not go good on the part of company goodwill in long-run.
For large companies, the tricks are rather known as business policies. They have to take extra care for customer care and cannot play with it. They compel the buyer to but set amount of products in order to receive free shipping. Dispatching multiple products in one consignment is easy, convenient and economical too for shippers rather than multiple smaller packets. Selling more to one single buyer in a single bill reduces a lot many overheads for the company and hence manages the shipping charges from those accounts. Moreover, they do have a fixed yearly contract with parcel and courier service provider too.
Once the online shoppers come to know about hidden secrets of so-called ‘free shipping’, it is rational to them to opt or not for such facility.
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