As my grandfather used to tell me as a small boy, "there's no such thing as free lunch".  Well what he meant was, it may appear free but there's probably an equivalent cost somewhere else.

Like me, you've probably been "spoilt" by Amazon Prime where the shipping is FREE.

But of course it's not entirely because you pay a subscription for that.

But Amazon pays more in shipping costs than I pay them for PRIME right ?

Well, I don't think Amazon got to be where they are by losing money. I know because of PRIME I drive more business to Amazon. And honestly to my chagrin I don't actually price compare sometimes. So Amazon probably gets more business (and hence more margin) and sells it for more than others (more margin). But everybody feels they got a good deal all round right ?

I believe there was an eBay experiment where two identical listings were posted, one with a price and FREE shipping, the other with a lower price but shipping added. Guess which sold  more. Yes the FREE shipping item. Except when you added the costs they came out the same. There was a perception that the FREE shipping item was somehow a better "deal". Aren't humans funny....

So when you have a (coffee) company selling their wares with FREE shipping, you might want to ask, where's the subsidy coming from. My store uses an integration with a number of carriers to calculate the COST based on weight and distance and service level. I make ZERO profit on the shipping, if my USPS carrier didn't come to the door to collect I would actually lose money by going to the Post Office and standing in line.

Which means are they pushing up the cost of the beans to cover it but not telling? Are they using cheaper sourced beans to allow for the shipping to be covered in the price ?

I believe in transparency so I will continue to source my beans from reliable, transparent wholesalers who look after the farmers as much as possible. I don't buy in Starbucks level bulk but then I can offer varieties and regions that Starbucks would have little interest in. I will charge you what the shipping costs me. I'm selling coffee not shipping. If you look at the USPS charges table, you may see that once you cross the 15oz threshold, price jumps to almost double. So going from one 8oz bag to two, goes from about $3.50 to $7.50 (depending on location etc). But four bags still costs the same $7.50 because of the shift to pound ranges versus ounces.

Long story short I am going to implement an instant shipping rebate.

$4 off for four.

No code needed, just checkout in the usual way.

Thanks grandfather!


Written by Stuart McKnight

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