Why Are Retailers’ Shipping Rates Different?

By March 19, 2014 Shipping Rates

As consumers, we are all familiar with how different online and brick-and-mortar retailers ship the products we order. Some have free delivery, some offer fast or discounted options, and others may offer in-store pickup. A recent Yahoo article has set out to decide which among the big players has the best value for shipping. But why do they charge different rates for the same products?

Most of us would be familiar with Amazon’s shipping policy: Orders $35 and over can qualify for free “standard” shipping and those with an Amazon Prime membership get free two-day shipping for all orders. As an exclusively online retailer, Amazon has invested heavily in its own order fulfillment systems which allows them to offer these kinds of deals to its customers.

Brick-and-mortar retailers seem to face a slightly different challenge than Amazon, but they also have one advantage in the form of in-store pickup. All of the retailers in the survey that offer in-store pickup list it as a free service, and most of them can get you the product on the same day if it is in stock at the store. This option is attractive for high-demand items or for items which would otherwise cost extra to ship.

Some of the figures illustrating shipping costs from different retailers may seem arbitrary, but they are always carefully planned. For example, why would an iPhone case be free to ship from Costco, but cost $9.99 from Macy’s? Many factors–including marketing incentives–play into this rather large gap.

Even though some of these large retailers seem to offer better value than others, it ultimately comes down to how well organized their shipping divisions are. With thought-out and efficient logistics, any size retailer or vendor can reduce their shipping costs.

Call TAGG Logistics today to see how we can help your business! We have solutions for businesses of all sizes and needs to simplify and reduce the cost of storing, packing, and fulfilling your orders.