Free shipping

Free shipping is a marketing tactic used primarily by online vendors and mail-order catalogs as a sales strategy to attract customers.

Online sales model

Internet vendors benefit from a simplified sales model as compared to traditional brick-and-mortar stores. By storing goods remotely at a warehouse location and shipping goods directly to a consumer, significant transportation needs are eliminated both on the part of the vendor (shipping goods to stores) any by the consumer (traveling to stores). Additionally, near universal access to the Internet means that a relatively few warehouse locations can compete with a market without having to deal with amounts of real-estate.

Shipping and Fees

The simplified business model provides potentially lower costs or higher profit margins for remote vendors. The 'up front pricing' model attracts customers with low up-front prices reflecting the lower cost of goods to the vendor with less overhead. The vendor would then add the cost of shipping, and any other applicable fees to the order before processing. Since the vendor typically makes the shipping arrangements, it is entirely possible that the cost of shipping passed on to the consumer will not be the same as the cost of shipping borne by the vendor. Some online vendors use this as a source of revenue, further increasing profits or allowing the vendor to advertise even lower up-front prices. (The classic joke here is the "free car" worth $20,000 that has a $30,000 shipping and handling fee)

Free Shipping Day

Free Shipping Day is a one-day event held annually on December 18th. On the promotional holiday, consumers can shop from both large and small online merchants that offer free shipping with guaranteed delivery by Christmas Eve. The 2012 event was scheduled for Monday, Dec. 17 and included more than 1,000 participating merchants.

History

Free Shipping Day was started in 2008 by Luke and Maisie Knowles, founders of Coupon Sherpa and FreeShipping.org, in an effort to extend the online shopping season. Statistics at the time showed online shopping peaked on Cyber Monday, generally held the week immediately following Black Friday. Consumers believed they would not receive their online orders in time for Christmas after that date.

The first event was created in two weeks by Knowles. Several hundred merchants participated and media attention was unusually high. In 2009, more than 750 retailers participated, with 350,000 plus sales taking place through the official site www.FreeShippingDay.com. Merchant participation has more than doubled each subsequent year. Knowles talked with TIME magazine blogger Brad Tuttle in 2010 about the role of free shipping as a promotional tool, saying, "I see a trend of free shipping offers around the holidays having a lower threshold than they have in years past...we are seeing more merchants offering free shipping on ALL orders"

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Freight transport

Freight transport is the physical process of transporting commodities and merchandise goods and cargo. The term shipping originally referred to transport by sea, but is extended in American English to refer to transport by land or air (International English: "carriage") as well. "Logistics", a term borrowed from the military environment, is also fashionably used in the same sense.

Modes of shipment

Ground

Land or "ground" shipping can be by train or by truck (International English: lorry). In air and sea shipments, ground transport is required to take the cargo from its place of origin to the airport or seaport and then to its destination because it is not always possible to establish a production facility near ports due to limited coastlines of countries. Ground transport is typically more affordable than air, but more expensive than sea especially in developing countries like India, where inland infrastructure is not efficient.

Shipment of cargo by trucks, directly from the shipper's place to the destination, is known as a door to door shipment and more formally as multimodal transport. Trucks and trains make deliveries to sea and air ports where cargo is moved in bulk.