- Joined
- Dec 18, 2019
- Messages
- 7,124
I was using simple terms to avoid all the business expense terminology. And a toy example. The point really is the Amazon vendor's margin is reduced to "pay" for the associated costs of shipping, to make it appear more attractive to the consumer. Or the vendor has increased the sell price to make up for Amazon's shipping cost. As a consumer, we should be sensitive to total acquisition cost, which includes delivery. I often see product on Amazon (commodity grocery store like items) which are marked up to account for shipping. Grocery store aspirin, for instance is way cheaper in the store than on Amazon...Once again you’re not taking into account the cost of labor, warehousing, packaging and all the other costs. I doubt they’re making 50 cents on the entire transaction let alone that much on shipping
While profit margins do vary the average company selling through Amazon makes a profit of 15%. If that’s the case with R J Sakowski’s example the seller made about 41 cents.
Free shipping doesn't really exist. There are always costs associated with it. Someone is subsidizing "free shipping", be it the seller, or countries.