By Laura Stevens Ginger Greer, a Medford, Ore., attorney who does nearly all her shopping from work without leaving her desk, has drawn a line in the sand: “I absolutely refuse to pay for shipping,” she says.“You can find anything, anywhere at this point” that ships free, she adds. That includes a step stool for her 5-year-old daughter and a barn-door slider Ms. Greer recently bought for her closet from Amazon.com Inc. Of course, shipping isn’t really free. But building it into a product’s price tag, or offering unlimited deliveries for a flat fee, can make consumers blind to it. Ms. Greer pays $99 annually for “no cost” two-day shipping through Amazon Prime but, she says, “in my mind, that’s free.” The number of consumers who agree with her is rising quickly. More than half the past year’s orders from 30 of the biggest e-commerce merchants were shipped free of charge, compared with 33% two years ago, according to mystery shopper StellaService.For online retailers who can afford it, free shipping is becoming a loss leader—the e-tailing equivalent of selling milk below cost to increase grocery-store traffic. Amazon Prime’s free shipping is turning the retailer into the first stop for many consumers. In a survey commissioned by BloomReach Inc. last year, 34% of 2,000 consumers polled said they started their online shopping on a search engine like Google. But 44% began at Amazon. That’s up from 30% in 2012, according to Forrester.In the free-shipping game, big shippers, who get more favorable rates from package carriers like FedEx Corp. and United Parcel Service Inc. because of guaranteed and predictable volume, have a big competitive advantage. That helps to make the Internet a tougher marketplace for startups and small businesses. The Web’s biggest retailers—including Target Corp., Wal-Mart Stores Inc. and Amazon—often get volume-driven discounts of 70% or more on certain shipments, while boutiques like Saratoga Olive Oil Co., in Saratoga Springs, N.Y., get breaks closer to 5%.“The barriers to entry are tough,” says Trevor Outman, principal partner at consulting firm Shipware LLC. He estimates that, after discounts, a megaretailer might pay about $14 to express-ship a 3-pound, 10-inch-square box from New York to a suburban Atlanta home. That same delivery could cost a small retailer about $74.Saratoga Olive Oil, which sells gourmet oils and vinegars, knows that all too well. “We’re not having Saratoga Oil Prime anytime soon,” says Peter Koch, its operations analyst. “We’ll never be large enough.”Saratoga shipped about 5,000 packages last year, at an average cost of $12 to $19 per order, including packaging. It offers free shipping on orders over $100, but that eats into its margins. “It’s a cost of our business and getting our name out there,” says Mr. Koch.More-established retailers have struggled to adjust. About seven years ago, Amazon moved aggressively into home and garden products, squeezing specialty e-tailer Comfort House, which launched its website in 1994. “When we started, there was no such thing as free shipping. And actually, today there’s no such thing as free shipping,” says Jeff Gornstein, president of the Newark, N.J., company, which he estimates generally spends about $15 to $20 per shipment, or about 12% of revenues.“We are absorbing more and more of it because we can’t pass along the costs to consumers, because of Amazon,” he says.Indeed, shipping costs are a new front in price wars. Last week, Amazon and Target.com both offered a 1.7-ounce jar of Neutrogena Hydro Boost Gel Cream for $17.99. Amazon offers free shipping to Prime members, as does Target to its REDcard members, who sign up for a Target debit or credit card. For nonmembers, the slowest shipping option cost $5.48 or $4, respectively. Both retailers can fatten their margins by saving even a few pennies off what it would cost to ship such a small item. Without discounts, prices are about $13 by ground and $24 for two-day air from New York to Atlanta. Amazon’s scale typically gives it an edge. A Shipware survey of about 560 shippers showed some who spent in the range of $100 million annually on shipping could qualify for discounts of more than 80% on overnight shipments, and up to 60% on residential delivery by ground.Amazon shipped more than a billion North American packages in 2015, roughly seven times as many as its closest rival, Wal-Mart, according to estimates by software developer ShipMatrix Inc. Amazon says it spent $11.54 billion globally on shipping costs last year.Barclays analysts estimate Amazon spends $4 to $5 on average per package, compared with the average $7 to $8 for ground delivery paid by an average business.Amazon didn’t respond to requests for comment. Though financial terms of its deal aren’t public, Amazon is among the handful of top customers who pay the Postal Service an average of $1.87 a package to make the last leg of a residential delivery. Other retailers must pay for a package’s full journey. Though it can be costly for other merchants to sell through Amazon, many do so in part to take advantage of shipping discounts. Through UPS, outside vendors spending over $1,000 weekly to ship from Amazon receive a 37% next-day air discount. Selling through Amazon eats into margins at Quady Winery in Madera, Calif., but gives the wine maker access to millions more customers. Quady recovers at least 40% of the retail price of its wine on orders placed through Amazon. “Shipping wine is expensive. It’s heavy, and you usually need to do it in two or three days,” says Herb Quady, one of the family owners. “Certainly we pay a lot more for shipping than Amazon does.” Write to Laura Stevens at Laura.Stevens@wsj.com
RSS Business Feeds
Labels
Ads of the World™
(5438)
Ads of the World™ blogs
(52)
Advertising
(10693)
Advertising Age - Latest News
(806)
Advertolog - Advertising & Commercials
(3091)
Adweek : Advertising & Branding
(785)
Blog
(485)
Bond Investing Made Easy @ Bonds1.net
(1)
Bond Investment News & Update Charts for the Fixed Income Investor
(3)
Business
(1642)
Business - The Huffington Post
(7804)
Business & Money | TIME.com
(364)
Business | The Guardian
(2034)
Business Affair
(6)
Business Blog
(1776)
Business Concern
(2)
Business Idea
(1137)
Business Issue
(1241)
Business on HuffingtonPost.com
(1915)
Business Tip
(235)
Business Trend
(12847)
CBC | Business News
(1684)
Consulting
(1)
Cookies and web tracking | The Guardian
(4)
Copyblogger
(1776)
Creative Income
(235)
Cyberlaw
(10)
E-Commerce
(10)
E-COMMERCE AND TECH LAW
(10)
Economic
(2121)
Entrepreneur
(2670)
Entrepreneurship
(1)
Event
(10)
FieldAware
(2)
Finance
(2053)
Global Bond Investing Made Easy
(1)
Hand
(13)
HBR.org - Management Tip of the Day
(119)
HubSpot Marketing Blog
(2228)
HubSpots Inbound Marketing Blog
(7)
IFTTT
(521)
Inbound Hub | Marketing
(10)
Inc.com
(2670)
Internet Marketing
(35)
Internet News
(158)
INTERNETMARKETING.COM
(35)
Investment
(5)
Just Sell®... it's all about sales®...
(21)
Just Sell®... its all about sales®...
(68)
JustSell
(7)
Knightsbridge Human Capital Solutions | Knightsbridge Human Capital Solutions
(1)
Latest financial
(2521)
Machine & Garden Tools Trade Shows
(13)
Management
(1845)
market & economic news and analysis | guardian.co.uk
(1)
market & economic news and analysis | The Guardian
(28)
market & economic news and analysis | theguardian.com
(2492)
Marketing
(8476)
Marketing Donut feed
(485)
Marketing Pilgrim - Internet News and Opinion
(158)
Media
(389)
Media & Advertising Trade Events
(10)
MIT News - management
(4)
MIT News - Sloan School of Management
(452)
Money.com
(1)
Money.com » Time Sections » Business
(1)
Moz Blog
(1278)
NATSO
(1241)
Network Marketing Pro
(197)
Network Marketing Pro | Free MLM Training
(37)
Network Marketing Pro® | Free MLM Training
(151)
News
(20872)
Office
(741)
Office Blogs
(737)
Office News
(4)
Opinion
(158)
Policy Research Working Paper | Gender | World Bank
(6)
Sale
(96)
Search Engine
(1532)
Search Engine Watch
(1532)
SEO
(1281)
SEOmoz Daily SEO Blog
(3)
Small Business
(15985)
SMALL BUSINESS CEO
(2517)
Small Business Trends
(25699)
Springwise
(1102)
SpringwiseSpringwise
(35)
Technology
(5)
Technology: Cookies and web tracking | guardian.co.uk
(1)
The Economist: Business
(2121)
The Economist: Finance and economics
(2053)
The Heavy Chef Project
(1)
TIME
(399)
TIME » Sections » Business
(178)
TIME » Time Sections » Business
(208)
Trade
(13)
TrendHunter.com - keynotes
(1270)
Video
(4)
Vimeo / "marketing" tagged videos
(4)
WSJ.com: Small Business
(616)

Blog Archive
-
▼
2016
(10474)
-
▼
April
(827)
- May Brings Voting for Small Business Book Awards
- May Brings Voting for Small Business Book Awards
- 10 Tips for Online and Content Marketing
- 10 Tips for Online and Content Marketing
- Onewheel Skateboard Replaces Hoverboard in Weird T...
- Onewheel Skateboard Replaces Hoverboard in Weird T...
- Rainmaker Rewind: How to Book Engaging Podcast Int...
- The Pros & Cons of Facebook, Twitter, Instagram & ...
- The Three Box Solution: Innovation in 3 Little Boxes
- The Three Box Solution: Innovation in 3 Little Boxes
- You Can Now Set Goals in Google Calendar: Here's H...
- Million Dollar Interview with Darin Kidd
- How to Utilize Technology to Grow Your Small Business
- How to Utilize Technology to Grow Your Small Business
- Congressman Byrne Introduces Resolution to Nullify...
- Periscope Adds New Feature, New Video Streaming Se...
- Periscope Adds New Feature, New Video Streaming Se...
- Donald Trump on Small Business Issues (In His Own ...
- Donald Trump on Small Business Issues (In His Own ...
- Ciara Viehweg of Facebook: Over 1.5 Million Small ...
- Ciara Viehweg of Facebook: Over 1.5 Million Small ...
- How to Retain Customers Using User-Generated Conte...
- Rethinking Addiction - Johann Hari's Addiction Tal...
- The 5-Step Process that Solves 3 Painful Writing P...
- Kenly 95 Sharply Criticizes Transportation Leaders...
- Launch Your Own Movie Channel With Unreel.me Video...
- Designing for Trust - Joe Gebbia's Trust Speech Sh...
- Launch Your Own Movie Channel With Unreel.me Video...
- 7 Great Examples of 'Welcome' Emails To Inspire Yo...
- A Better Justice System - Adam Foss's Speech on Cr...
- Five of the most interesting SEM news stories of t...
- Strategies to Drive Member Engagement
- Think Outside the Box but Stay Inside the Lines
- Dennis Publishing’s Paul Lomax on adblocking and ‘...
- How to Track your Employees Time and Still Be Seen...
- Think Outside the Box but Stay Inside the Lines
- Ideological Approaches to Poverty - Arthur Brooks'...
- 14 Stress Management Apps to Relax Your Mind & Body
- How to Optimize Contests in a Social Media Campaign
- How to Optimize Contests in a Social Media Campaign
- Does your business have digital vision?
- Staff unaware that messages could be monitored
- Freelancers contribute £109bn to UK economy
- FSB to launch Women in Enterprise Taskforce
- Also in the news this week - 29 April 2016
- Outbrain Launches Content Bots for Chat Platforms
- Outbrain Launches Content Bots for Chat Platforms
- New Santander Select Adds Bells and Whistles to Pe...
- New Santander Select Adds Bells and Whistles to Pe...
- 43 Percent of Cyber Attacks Target Small Business
- 43 Percent of Cyber Attacks Target Small Business
- OneNote and Office Lens April roundup
- 5 Startups Participate in Prestigious Constant Con...
- 5 Startups Participate in Prestigious Constant Con...
- Credit limit
- From the 1% to $1
- If it ain’t broke, don’t Brexit
- DC hold’em
- The great switchover
- Spanish steps
- Dry times
- Taking your analytics practice to the next level
- Category error
- Deltour in the dock
- Risky business
- Exhaustive analysis
- 7 Reality Checks For New Makers and Handmade Entre...
- 7 Reality Checks For New Makers and Handmade Entre...
- Re-Entering the Workforce - Carol Fishman Cohen's ...
- Why Companies Fail - Knut Haanaes's Talk About Bus...
- Creating a Better Government - Haley Van Dyck's Go...
- When easing gets hard
- How to achieve face-melting content marketing ROI
- Shake it off
- Crazy diamonds
- Still kicking
- Cornerstone Content Defined in 60 Seconds [Animate...
- Killer List of National Small Business Week 2016 E...
- Behaviors of Original Thinkers - Adam Grant's Talk...
- Killer List of National Small Business Week 2016 E...
- 8 Guidelines for Exceptional Web Design, Usability...
- 11 extraordinary uses of Augmented Reality (AR)
- Why Prospective Students Aren't Opening Your Emails
- The Psychology of Ecommerce: Why Your Loyalty Prog...
- How to Become a More Efficient Editor: 12 Ways to ...
- Bank of America Reports Earnings Drop in Q1, Stock...
- Bank of America Reports Earnings Drop in Q1, Stock...
- The Hazards of Working a Desk Job & How to Overcom...
- Adaptive Medias Merges With AdSupply, Touts Anti-A...
- Adaptive Medias Merges With AdSupply, Touts Anti-A...
- The Local SEO Agency’s Complete Guide to Client Di...
- 'Free' Shipping Crowds Out Small Retailers
- Google Home Service Ads Expand, Adds Electricians ...
- Google Home Service Ads Expand, Adds Electricians ...
- Klevu Self-Learning Search Tool Aims to Help Ecomm...
- Klevu Self-Learning Search Tool Aims to Help Ecomm...
- Ace Those Summer Hires with Best Practices from ADP
- Ace Those Summer Hires with Best Practices from ADP
- What To Do If Your Website Traffic Is Down
- 12 Yummy Cookie Businesses on Etsy
-
▼
April
(827)

0 nhận xét:
Post a Comment