When Free Shipping May Not Be Free
Anyone obsessed with shoes (and that's almost every woman I know) says there are two sure places to find and buy shoes: Nordstrom, of course, and Zappos, an online Web site with a huge selection and promises of free shipping and returns.
It was that free-shipping promise that prompted me to turn to Zappos after a disappointing outing at Nordstrom. First I encountered a couple of rude clerks (at Nordstrom!?); then I learned the store didn't have the right size in stock. A clerk finally found the right size at another store but said it would cost me $5 to have them shipped to my home. Forget it. I'd go to Zappos, where shipping is free.
Or so I thought--until I went to order the funky red shoes. That's when I discovered that Zappos's retail price was $5 more than Nordstrom's. Intrigued, I compared some other shoes as well and found that in several cases Zappos charged $3 to $4 more for shoes than Nordstrom's online site. Of course, by the time I added Nordstrom's $5 shipping fee, I usually always came out ahead at Zappos. But it was the principle: Zappos said it didn't charge extra for shipping but that cost seemed to be added to the base price. So was it really "free shipping?" Shouldn't Zappos just say "shipping included" when the price was listed?
I asked Zappos and here's the response from the company's chief executive, Tony Hsieh:
"1) Our average shipping cost is actually about $10, and we're definitely not marking up shoes above msrp [manufacturer's suggested retail price] by that amount.
2) Our focus as a company is to provide the very best service possible. We want our customers to buy from us because of service, not price, so depending on the specific item you choose, we may occasionally be a few dollars above msrp. The vast majority of the products that we sell are not as high as $5 above msrp. However, there are certain classes of items where we need the additional margin in order to provide as wide a selection for our customers (such as kids' shoes or lower-priced shoes) and for us to still break even on those sales (or even lose a little money). We actually don't make any money on those sales, but we see it as a service to our customers. We can either not offer those shoes at all or offer them to our customers for $5 above msrp (and break even on the sale), and we chose the latter.
3) Free shipping and free return shipping are really just that -- the service is free. It's more consumer friendly than charging $5 less for the product and then a separate $5 charge for shipping, because if they return it, there's no cost to the consumer, whereas on almost all Web sites that do charge shipping, you do not get your original shipping cost refunded if you return the item. This may seem like a small point, but it actually costs us quite a bit more to do it this way....
4) We have a 110% price protection guarantee, so if an in-stock product is found at a lower price at another Web site or brick and mortar store, we will lower our price by 110% of the difference."
Markup or not, at least you know, when you order shoes from Zappos, what the final price will be when you click a pair into your shopping cart. While I was researching this item and checking out prices at other Web sites, I found that you often had to create a password, enter your name, e-mail address, etc. before you could find out how much shipping would cost. That's very time-consuming and annoying, especially when you discover that shipping fees are so high that the online "deal" is not such a great bargain.
P.S. I just got an e-mail from Nordstrom. They're having an online shoe sale. Shipping is free!
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