Is free shipping really free?
7 June 2023 | Admin
We thought we'd take a moment to explain what free shipping is, and why, as an independent business we don't offer free shipping on ALL orders, but only over a £50 threshold.
What is free shipping or free delivery?
Free shipping or free delivery is when an online shopping retailer offers to deliver your goods at no additional cost, over a minimum threshold amount.
Is free shipping really free?
No, 'free shipping' is not really free. This article from the finance website motleyfool explains further, but all retailers have to pay for shipping. And that is a cost to their business. In one way or another, that will be passed back to you, the customer. As a customer, there are pros and cons to this. Businesses will treat this differently too, with three main methods of covering the costs of 'free shipping':
- Companies Offering Free Shipping for an Annual Fee
- Free Shipping Built Into Product Price
- Free Shipping Over an Order Threshold
Companies Offering Free Shipping for an Annual Fee
You may well have seen this on Amazon, where you can pay a one-off fee of £89 to sign up to their Amazon Prime scheme and then for one year you'll receive 'free' shipping on all your orders with them.
In the instance of Amazon, that 'free' shipping is paid for up front. And Amazon have enough products in their online store to know that pretty much whatever customers need to purchase, they'll be able to buy it from them. Even if it's a lead and harness for your chicken!
This model works for them because if you ordered a delivery from them every day for a year, they would still make enough money from all those sales to easily cover the additional costs of free shipping.
For a huge company like Amazon, they can also negotiate fantastic deals on shipping rates because of economies of scale. So their costs per item shipped will be a lot less than for a small company like Cheeky Wipes. Because Amazon charge an upfront cost for their Prime service, they claw a lot of that back up front. Jeff Bezos isn't a billionaire because they are losing money on shipping. Next and ASOS offer similar schemes in the UK.
Free Shipping Built Into Product Price
Some of our competitors do things differently and use free shipping as a marketing tool to encourage customers to purchase. Modibodi for example, give free shipping on all UK orders. Which sounds like a great deal!
However as you'll see if you look at their prices, they charge significantly more for their period pants, with their basics starting at £15.50 and rising to £25 per pair for their full brief. That's not because their period pants are any different to ours (we share the same factories, so they aren't) but because they include that cost of free shipping within the product price of each pair of pants.
Free Shipping Over an Order Threshold
At Cheeky Wipes, our period pants start from around £11.99 for our sporty period pants and we offer free shipping on orders over £50. We prefer to be transparent with our pricing and shipping costs and allow our customers to choose which shipping options work best for them.
Here's what that means in practice.
Our shipping fees with Royal Mail start at £3.95, which is what Royal Mail charge us as a small business. We simply pass this cost on for any order under £50, we don't make a profit on it.
(As an aside, as a customer when I see other companies charging £6.95 for Royal Mail 48 delivery and making a profit from it, it makes me cross)! SportsDirect, I am looking at YOU....
You can see that on an order of £11.99, a £3.95 postage cost is a HUGE hit on our profit margins. It would leave us making a loss after we take into account overheads such as staff and warehousing costs. We simply can't afford that.
However on orders where a customer spends over £50 and qualifies for free shipping, we make enough on their entire shopping cart to absorb that cost of £3.95 and still make a profit.
We hope that explains why Cheeky Wipes don't offer free delivery on all orders and why we prefer to be transparent with our shipping costs. If this was of interest to you, you might also enjoy:
Cheeky Wipes - 4 day Working Week Trial
10 Common Period Myths - Busted
About the Author: Helen Rankin founded Cheeky Wipes, the original reusable wipes kit back in 2008 after disposable wipes caused her eczema to flare up. She went on to develop their range of 'Simple Reusables' to include period pants, reusable sanitary pads and reusable makeup removing pads. The team pride themselves on providing honest friendly advice and just LOVE educating people to help them make the swap to reusables all day long! The Company was recognised for their hard work in developing environmentally friendly products with the Queens Award in Enterprise for Sustainable Development in 2021.