posted on July 19, 2004 09:52:52 AM new
As an eBayer with a huge postal bill each week I wonder how do the big dotcoms afford free shipping? Amazon usually has free shipping on orders of $25 or more and just yesterday toysrus through Amazon had free shipping on just about any order. I ordered a working replica pay telephone that was listed on hotdealsclub.com for $5.98. the item weighs 4 pounds shipped my total bill with free shipping and sales tax was $6.35 the shipping and handling which was normally $7.39 was reduced to FREE! The telephone had a retail price of $29.95. What can Amazon or toysrus possible get out of this sale other than a sure loss? I must be missing something here.
posted on July 19, 2004 10:25:01 AM new
I don't know about all of them, but I heard on some news/money report that Amazon cut its advertising and uses that money for the free shipping instead - and it works! They felt it was a better way of getting new customers and getting existing customers to keep buying. Works for me - I used to put off ordering until I wanted enough stuff to make it worth shipping - now as long as I hit the minimum I buy!
posted on July 19, 2004 01:52:45 PM new
There is information freely available out in the ether about Amazon's free shipping.
What they do is optimize their orders using logistics. If you have ordered a book, a CD and a home appliance ...and those items are coming from three different warehouses... they are all transferred to one location, boxed up and shipped to you at the lowest (and slowest) possible rate for Amazon. Amazon does not pay the "retail" shipping rates you would have to pay at the USPS counter.
This is in stark contrast to Amazon's early days when they emphasized quick quick quick shipping almost to the point of getting the book before you ordered it.
Free shipping is such a powerful marketing tool that many consumers apparently don't even notice that they are no longer getting the lowest price available for that book, CD or home appliance.
How can you apply this principle to your eBay sales? You really can't, in my opinion. Amazon is leveraging its volume, which you can't do, and it is selling at fixed prices, which you may not be able to do and still maintain any kind of eBay business.
