[GrantS]

I don't think anyone doubts that the shipping costs money to someone, but the assumption many people might have is that Amazon themselves would be the ones paying the shipping costs to your wife behind the scenes because the customer already paid Amazon in advance when they paid for a Prime membership.

It is news to me that this is not the way things work.

[solson]

eBay is doing the same thing. They are pushing sellers to offer free shipping which simply means don't line item your shipping costs. The sellers still need to pay for shipping. Amazon still needs to pay for shipping too. It is built into their model.

I mean really people, I hate to sound condescending, but... when you do a "buy one get one free" do you really think you got something for free?

Maybe one day we'll all get free healthcare and free schools and freeways too. Don't kid yourself, you're paying for them.

[jcater]

> I mean really people, I hate to sound condescending, but... when you do a "buy one get one free" do you really think you got something for free?

To reiterate the parent comment: No, but we are paying a non-trivial fee for Prime membership every year. Is it unreasonable to have thought that part of that fee would go to offsetting shipping fees to the original seller?

I found your post informative in that, no, in fact it does not. That was definitely news to me. But no need to be condescending about it.

[solson]

One other thing most people don't know about this: Free shipping actually costs the buyer more than actual shipping costs. The seller has to guesstimate what actual shipping costs are and add that to the margin. Most estimates will be higher than actual costs since estimating under costs will put you out of business fairly quickly. If they aren't over actual costs initially they will be adjusted to higher than actual costs over time.

[Spooky23]

eBay and Amazon is different. Pushing shipping fees into the item cost is a profit driver for them. When you pay shipping explicitly, those costs usually aren't driving profits.

Remember the classic EBay scam back in the old days? You'd sell some widget for $5, with $25 shipping. Commissions were calculated on the item cost and excluded shipping.

Also, Amazon is making rule/practice changes that are eroding the benefit of Prime. In 2010, they would send products to me that weren't in east cost warehouses via 2nd Day air. These days, they usually just deliver it late.

[munger]

Yeah, this. The other thing the $.99 item with $5.99 shipping does is allow refund scams - you would of course be able to return this item, but only if you paid return shipping costs and then you only get refunded the $.99 item price meaning you would generally lose money on a refund.

Building shipping into the cost like Prime however, might do the reverse and expose a seller to over-refund issues where they would lose more on a refund if it must include the total item price without shipping. (When shipping is "free" and built in to the item price.)

[pbreit]

Yep, you're condescending. Because "buy 1 get free" may be temporary in which case the buyer is certainly benefitting by the timing of a purchase. I don't really get the Amazon complaint but when I pay $79 per year I get free 2 day shipping that I would not otherwise get. On Ebay, "free shipping" incents sellers into minimizing shipping & handling costs (and buyers strongly prefer it).