Amazon Surveys Sellers on Free Shipping for Regional Orders

by: COVID-19

Hell, why not just give your products away for free too? Especially to Amazon's EBT entitled "customers".

Free this, free that. It's what the zoomers have been conditioned to expect.

by: GetAGrip

What part of Free Shipping doesn't these scummy sites not understand. Free Shipping is and never has been free. Someone always pay for it. I never have nor will I ever offer free shipping. In fact I refund everyone for an overpayment if the shipping is less than what they paided. I even unlike those who lie about shipping have it printed on the shipping label.

by: TomH

No such thing as free shipping.  

by: Stone Cutter

*** The real reason for free shipping ***

A few years ago, I read an interesting article as to why these online sites pressure sellers into “free shipping”. It’s all about bookkeeping and tax laws.

If shipping is included in the price point, these online companies are allowed to realize the full price as their revenue, however, if sellers were to separate the product price from the shipping costs, these e-commerce sites cannot include the shipping price as revenue.

Examples:

1) A product sells for $35 which includes shipping.
Amazon can include the FULL $35 as their revenue.

2) A product sells for $30 with $5 for shipping.
Amazon can ONLY include $30 for their revenue, they
cannot include the $5 dollar shipping cost.

With a slowing consumer, Amazon will continue to pressure their sellers to include shipping costs in order to increase Amazons bottom line.

After all, it’s all about Wall Street and their investors.  

by: TomH

I do agree with that. The venues Are ALL about their revenue first and foremost.  

by: Snapped

The ‘revenue’ explanation may indeed apply to Amazon, (and other direct sale retailers), but maybe not as much for eBay.  They have their whole own justification conjured up.

According to the revenue recognition principle in accounting, revenue is recorded when the benefits and risks of ownership have transferred from seller to buyer or when the delivery of services has been completed.  

In Amazon’s case, they realize revenue from both sales, where it is THEY who transfer title, and from services.  But eBay has no goods, and transfers no titles.  They only ‘sell’ services.

And since they collect a fee on shipping, whether embedded (er, sorry, ‘free’) or not, that ‘revenue’ is assured.  Distasteful, but it doesn’t get boosted either way.  

No, eBay’s big ‘reason’ was the handful of sellers who gamed the system by loading all their item costs into un-fee’d ship cost.  eBay has server warehouses chock full of ‘applicable’ ship vs item cost averages upon which to base actionable judgement against violators. Easier to just monetize ‘em all and claim ‘industry standards’.  

Motivation aside, there is another, deeper irony to the whole free shipping isn’t free reality.  In the end, the cost of shipping (PLUS the venue tax aka ‘fees’) are all- in one way or another - passed on to the buyer.  Who calls it inflation and blames it on ‘the guv’ment’.

And all that ‘hype’ energizing the big claims of looking out for the buyer?  

That’s not ‘free’ either.

by: Calling You Out

But, Buyers love FREE shipping!

by: Rexford

Amazon is a parasite on the backs of sellers. Government not giving you enough tax breaks Amazon?

by: ScottLBrown

In the end, Amazon wants the business.

Sellers who sell on Amazon have seen a greater portion of their sales moving from DTC sites to Amazon.   Why?   Because Amazon constantly ups the ante requirements to sell on their platform.  The "Metrics".   Couple that with the Godfather "FBA".

But really, the answer to the question I did not give you.
What if you are small company that does NOT ship 70m packages a year and does not have the shipper discounts.   What if your AOV is ~$20.00, and the minimum shipping cost by Dim Weight (to be compliant with tracking etc)  is $4.00 - - Amazon referral fees @15% (FBM) $3.00 - -   Now add to that your warehousing costs and advertising ...... oh and Cost of Goods, there is not much room left.   There are some items that there is simply not enough margin/dollars to eat free shipping be it Regional or National.  Therefore, we automatically based on remaining margin/dollars says Yes or No to free shipping.  And we need to be able to control that.  So, if Amazon's intent is to add the # or % items to some fabricated required metric, that will be a hell-no game changer.   If they want to subsidize it on their own, we're all in :-).  

Oh wait, Amazon never does anything where the SELLER doesn't eat the costs.

Now that the sellers have seen the $$$$, they (we) continue to feed the beast.  We accept the crazy "costs of doing business" because those dollars and more importantly, the better dealer costs due to that volume and the discounted shipper contracted pricing due to volume - - all make up the volume.  

We can't forego the $$.