Free Shipping is Killing Small Businesses

According to a recent piece from The Atlantic, millions of small businesses are getting crushed with shipping fees as they attempt to keep up with Amazon and other eComm giants.

Per the story, free shipping has been “transformed from an occasional incentive into something that closely resembles a consumer requirement,” which is cool for consumers. “But shipping isn’t free for the people who send packages, and an insatiable demand for this perk might be the thing that breaks mom-and-pop retail for good.”

In the shipping wars, the story says, small businesses are doomed from the jump: due to “economies of scale… mega-retailers simply pay less per package for shipping,” something that also helps to allow — and absorb the losses tied to — free returns.

The story goes on to explain that free shipping soothes a “psychological discomfort” called the “pain of paying,” which mostly manifests itself in irrational ways — cash hurts more than credit, for instance — making consumer demand for free shipping even greater.

Now that “U.S. shoppers are used to being coaxed into purchases by retailers who can and will bend over backwards to land a sale,” retailers that can’t afford to are getting squeezed out, regardless of how good the shit they sell happens to be.

You can read more about it at The Atlantic.

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