CNBC: "The Hidden Cost Of Free Shipping"

For the record, Clark Howard recently said that “free shipping isn’t really free for any of us.”

This is obvious if you try to buy inexpensive things at Amazon. I’ve looked at some things on Amazon that should be only $3 but are $7+ with “free” shipping. And then you pay tax on the full $7.

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I always scratched my head when people thought that shipping was really free. SOMEBODY pays. I can tell you that Fedex, UPS, USPS and others do not carry items across town or the country for free.

As a seller I would issue coupons which either had a percentage off the cost or free shipping. I encouraged people to decide which one was cheapest for them. Because I was shipping from off the mainland I also made sure that the shipping costs were calculated and displayed to the buyers.

When I would buy an item from the mainland, I almost always chose free shipping and sometimes then found that shipping was not free to me (because of my location). There are popular companys who chose a default shipper and that shipper is crazy if I would pay their rate. For example, before Amazon, I could order a disk drive for $40 and be told it would cost $40 to ship it! I would call the company and see if they could put whatever item in a USPS flat-rate box or envelope for something like $10 at the time. One time a company agreed and sent someone specifically t othe post office for my shipment as they had no flat rate materials. I thanked them by sending a bag of freshly roasted coffee (naturally by flat-rate envelope) as a thank you.

On Ebay you used to see (and may still see) that an item may be listed twice, once with free shipping at a higher price than the same item without free shipping. The two items would cost you the same amount.

What I like about free shipping is there are no surprises at end. I’ve tried to order a thirty dollar item and find out at the end that shipping is $18.

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