Online retailers are trying to move customers away from the free shipping offers that have attracted online shoppers over the past several years. Rising fuel costs have made the free shipping offers more difficult for retailers to offer.
The free-shipping bonanza for shoppers came even as costs of shipping were going up -- as major shippers, including the U.S. Postal Service, FedEx and UPS, sought to boost rates to keep up with rising fuel costs.
"The issue of shipping has been a difficult one for a lot of retailers," Nielsen//NetRatings senior analyst Heather Dougherty told the E-Commerce Times. "It could be one of the issues from this year that we see companies struggling with how to change in 2006."
In years past, free shipping typically came in exchange for a minimum order size of US$100 or $75, Dougherty noted.
"A lot of merchants were so eager to drive online sales this year that they eliminated thresholds," she said. "It's a dangerous game, and consumers are likely to get hooked on that again. Next year, they'll ask, 'Why should I spend $75 now when you gave it to me for free last year?'"
Trying to take free shipping away from customers is going to be extremely difficult for online retailer -- especially when they are still so many free shipping offers available. The big retailers like Amazon are trying services like Amazon Prime that offer free standard shipping and overnight shipping discount for an annual fee. But all retailers -- large and small -- are faced with the problem as rising shipping fees (thanks to rising gas prices) start cutting into the bottom line. Rising shipping fees also affect eBay sellers. eBay has set up an information page about the new rates here.
