When “Free” Shipping Isn’t Really Free

In high school and college I hated economics. 

Something about all those graphs, and terms like “comparative advantage” and “diversification” just gave me a mental block.

But if I learned one thing from Mr. Stone’s AP Micro and Macroeconomics courses (and it is quite possible I learned just one thing), it’s this:

There’s no such thing as a free lunch.

What does that really mean though?

It means that even if you pay absolutely nothing, something that appears to be “free” always has a cost. Whether a hidden monetary cost or an opportunity cost, nothing comes free.

This is true even in the logistics business.

Many times, both buyers and suppliers alike are lured by the prospect of free shipping. While these scenarios look a little different from the customer and the seller standpoint, they both come to the same conclusion: “free” isn’t really free.

Buyers’ perspective: your items ship free!

Let’s start with the buyer’s perspective. How many times have you been roped into a sale because of the idea of free shipping?

I’m a sucker for savings, so if you tell me I’m going to save the $7.99 shipping cost, I’m as good as sold! It doesn’t matter what I’m buying, I’m not paying for shipping!

I’m not the only one with this flawed perspective.

Most of us have a mental block known as “anchoring”. An anchor is the first piece of information we get when making a decision. So, upon entering into a purchase agreement, we are slapped with the “FREE SHIPPING” incentive, and we just can’t seem to get past it.

Even if that means we spend an extra $10 on junk so we can meet the $50 free shipping minimum.

C’mon… you know you’ve done it!

But the problem with falling hook, line, and sinker for this free shipping anchor (see what I did there?) is that one of two things is likely to occur:

• The shipping price is stealthily added into the cost of the item, or

• It’s a ploy to get you to increase your order size in order to meet the minimums.

In other words, your “free” shipping comes at the price of a more expensive product or additional products you didn’t want or need in the first place.

Not exactly free, is it?

Suppliers’ perspective: My employees can make the delivery for free.

Now let’s look at it from the supplier’s perspective. As a courier, we often hear the argument, “but my employees can deliver the products for free! I’m already paying them, so I might as well have them do it.”

This has enough explanation for an entire Dallas super rush courier blog post in itself, but the long and short of it is using your office employees as delivery drivers can end up costing you big time.

First of all, removing your employee from the workplace means they’re losing productivity on their core tasks. Studies show for every interruption it takes a good 25 minutes to return to the original task.

Secondly, should the worst happen and your employee is in an accident or the product is damaged or lost, the costs to you as a company will far outweigh the cost of hiring a licensed and bonded super rush carrier to handle your deliveries. Passing along the work also passes along the responsibility for damage, loss, or injury.

Perhaps you weren’t as lucky to have an economics instructor that taught you many wonderful things. (Or maybe just one wonderful thing.) Don’t worry, though, because, as always, our super rush couriers are here with valuable life and business lessons, and if you take away just one thing from this Dallas on demand delivery blog, let it be:

Free isn’t always free.