

Amazon Accused of Cheating Customers Through Shipping Costs - evo_9
http://gma.yahoo.com/amazon-accused-cheating-customers-shipping-costs-210708580--abc-news-personal-finance.html

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solson
I think the obvious answer is that this isn't FREE shipping. Nothing is FREE.
"Free" shipping is nothing but marketing speak, and if this is illegal so is
"Buy one get one Free" or "Buy one get one half price" since the discount is
built into the business model.

My wife is an Amazon seller and yes when she ships prime she must pay for
shipping which would force her to lose money on each shipment so she builds
the cost of shipping into the cost of the item. The cost of her taxes are in
the item. The cost of her employees are in her item. The cost of software
licenses are built into the item.

The only thing you get with FREE shipping is a receipt that doesn't include
shipping as a line item. Someone has to pay the driver, buy the truck, and put
fuel in it, pay for the insurance, etc, etc, etc. It can't possibly be free.

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GrantS
I don't think anyone doubts that the shipping costs money to someone, but the
assumption many people might have is that Amazon themselves would be the ones
paying the shipping costs to your wife behind the scenes because the customer
already paid Amazon in advance when they paid for a Prime membership.

It is news to me that this is not the way things work.

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solson
eBay is doing the same thing. They are pushing sellers to offer free shipping
which simply means don't line item your shipping costs. The sellers still need
to pay for shipping. Amazon still needs to pay for shipping too. It is built
into their model.

I mean really people, I hate to sound condescending, but... when you do a "buy
one get one free" do you really think you got something for free?

Maybe one day we'll all get free healthcare and free schools and freeways too.
Don't kid yourself, you're paying for them.

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Spooky23
eBay and Amazon is different. Pushing shipping fees into the item cost is a
profit driver for them. When you pay shipping explicitly, those costs usually
aren't driving profits.

Remember the classic EBay scam back in the old days? You'd sell some widget
for $5, with $25 shipping. Commissions were calculated on the item cost and
excluded shipping.

Also, Amazon is making rule/practice changes that are eroding the benefit of
Prime. In 2010, they would send products to me that weren't in east cost
warehouses via 2nd Day air. These days, they usually just deliver it late.

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munger
Yeah, this. The other thing the $.99 item with $5.99 shipping does is allow
refund scams - you would of course be able to return this item, but only if
you paid return shipping costs and then you only get refunded the $.99 item
price meaning you would generally lose money on a refund.

Building shipping into the cost like Prime however, might do the reverse and
expose a seller to over-refund issues where they would lose more on a refund
if it must include the total item price without shipping. (When shipping is
"free" and built in to the item price.)

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achille
I caught amazon pulling this a while back and it was disappointing.
Screenshots: [http://imgur.com/a/fiPnD](http://imgur.com/a/fiPnD)

Notice it's the same exact item#

    
    
        Not logged in : $19.23 + 6.99 shipping
        When Logged in: $27.85 + free shipping

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palebluedot
However, you should also note that the cheaper item is sold by an affiliate,
and not by Amazon itself. When you are logged into your prime account, it
defaults to showing prime-eligible items by default. Your screenshot does not
show Amazon adjusting their prices based on whether you are logged in or not.

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surye
Both are being sold by the third party PUR

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MBCook
No, the item is _made_ by PUR.

In the first screenshot, it's being sold by Infutech, Inc. In the second it's
being sold by Amazon themselves.

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joncalhoun
I realize this is the media playing out this story as well as possible, but
this article focuses entirely on "free shipping" and never bothers to mention
the fact that prime is "free 2-day shipping." The distinction is pretty major.

eg - The example used in the article is $10 + $3.99 shipping, vs $13.99 on
prime. What they fail to mention is that $10 + $3.99 for 5-8 day shipping is
not equivalent to $13.99 for 2 day shipping.

I'm not saying I love it, but I never once believed I was paying upfront for
free shipping when I bought prime. I was paying for an upgrade to 2-day
shipping. The 2-day upgrade may not seem like much now, because items ordered
on Amazon often still show up in 2-3 days without it, but that was not the
case a few years ago when items normally took 5+ days to show up on my
doorstep.

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darrenkopp
Ugh, I hate lawsuits. Amazon often clearly states under the price "Note: This
item may be available at a lower price from other sellers that are not
eligible for Amazon Prime."

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josephlord
No this is about it being available from the same seller for a lower price not
on Amazon Prime. This means that Amazon Prime is getting you no benefit on
this purchase. Amazon are saying it gives you free shipping and charging you
money for the that service therefore _IF_ true Amazon is defrauding customers.

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jsight
So are you saying that there are cases where you have a choice like this?

1\. Buy the item from Vendor X for $19.99 with Prime "free" shipping
(fulfilled by Amazon) 2\. Buy the item from Vendor X for $14.99 with $4.99
shipping (not fulfilled by Amazon)

If so, then I would still choose the Prime option. Items that are fulfilled by
Amazon fall under Amazon's support and return policies, which are excellent.
Third-party sellers not selling under those terms tend to have much less
favorable customer protections.

Obviously those protections (and the integrated shipping) come at a cost, but
my point is that there is more to it than just "free" vs. non-free shipping.

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jrs235
Great points about customer service and return policies. Also that third party
probably isn't shipping is 2 Day either.

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alphakappa
Anecdotal, but lately, I've noticed that items I purchase do not ship
immediately from Amazon, so while the shipping time itself may be 2 days, I
get the product several days later which kinda defeats the purpose of Prime.

Not to mention that several of the items that I purchase are 'add-on' items,
which means that I need to accumulate $25 worth of items to ship them (which
is pretty much what every non-prime member does too)

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cc439
I have a friend who works as an area manager in one of the bigger fulfillment
centers and he offered a good reason for the processing slowdown after
Christmas (although it doesn't explain how the issue is still alive).

Staffing a warehouse requires a lot of foresight. Overhead has to be kept lean
and demand is very seasonal. Amazon forecasted their largest holiday season
ever and staffed accordingly but the information they used to forecast the
post-holiday slowdown assumed trends would be roughly similar to previous
years. It turns out that this holiday season was a sort of tipping point for
consumers acceptance of online purchasing and post-holiday demand barely
dropped. All that seasonal labor had been let go but they needed to bring on a
large number of permanent employees which takes time.

I don't think it takes ~3 months to find the necessary workforce but I think
it explains some of the issues Amazon has been experiencing lately.

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hga
Ah ha! I was wondering why one item I ordered Prime 2 day was shipped 1 day
UPS. A warehouse bottleneck would explain it.

As for permanently bulking up, I can think of at least several factors:

First Amazon has to realize there's been a permanent change in behavior, vs.
e.g. more people doing late holiday shopping.

Then they have to figure out how to address this.

And there are no doubt classes of temp employees who wouldn't be interested in
permanent jobs; I'm particularly thinking of the ones who travel around in RVs
and stop by an Amazon warehouse for the Christmas season for that sort of
work. Many if not most are probably gone by now.

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xacaxulu
I'm cancelling my Prime membership when it's up but not because of the price.
Over the last six months I've received exactly ZERO orders within 2 days.
Start calling it 'free 5-14 day shipping'.

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smackfu
Did you complain to Amazon? They are pretty good at making it up to you, given
that it is guaranteed 2-day shipping, and them not delivering on that is
essentially fraud.

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aroch
Well, no...It's "2-day" shipping not "guaranteed 2-day" shipping -- the
theoretically maximum time in transit, assuming no issues, is 2days.

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smackfu
OTOH, if they are choosing to use services that are regularly not meeting the
2-day shipping goal, then it's false advertising to call that "2-day"
shipping.

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aroch
No it isn't. They're buying 2-day shipping from UPS or FedEx, both these
companies make a "best effort" to deliver the package within 2 business days.
That's not always possible without greater expenditure than the companies
consider 'reasonable' (and their terms speak to), that's why there are
guaranteed next-day and 2-day air freight options from both.

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smackfu
The complaints are generally not about UPS or FedEx. They are about when
Amazon thinks the shipping distance is close enough that they can use any
service at all to meet the 2-day goal, but the services end up being terrible
and unprofessional. Like LazerShip which is just a dude with a car.

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admiraltbags
This is interesting. I'd like to hear what HN's take is on this. I noticed
that about 30% of the time products take 3 days, not the advertised 2 to get
to me. I live in SF so they really have no excuse. Didn't bother me to much
but never the less annoying when paying for the feature.

Another slightly off-topic gripe about prime I haven't seen much flak
regarding is shipping things like a roll of duck tape in a 12x16" box full of
packaging bags. I'm guessing they shipped from a different warehouse from the
rest of my order but still wasteful, what can you do though?

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twinwing
If their delivery time is off from their stated delivery time (what you get in
your email), you can get an extra month of Prime out of that[1].

[1]
[https://www.amazon.com/gp/help/customer/display.html?nodeId=...](https://www.amazon.com/gp/help/customer/display.html?nodeId=201117450)

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smackfu
Thanks, I didn't realize they had this policy in writing, as opposed to just
being something the customer service could give out when you complain.

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jrs235
So it appears the real benefit of Prime isn't FREE SHIPPING, it's 2-day
shipping (rather than standard shipping) at no additional cost.

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munger
Pretty much, except for the whole $79 additional cost of prime membership. =)

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jrs235
Yes. I forgot the upfront premium you pay for the opportunity to buy things
and get 2 day over standard shipping at no additional cost (at the time of
purchase).

The other thing we all are forgetting is that prime membership is more than
just "free" 2 day shipping, it includes Instant Prime Video streaming.
something many people don't seem to care about. Perhaps Amazon needs to break
the two offerings out? Prime Shipping ~ $59 / year, Prime Videos ~ $59 / year,
Prime Both ~ $99 / year?

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fmorel
There's also the Kindle Owners' Lending Library, which even less people
remember. I borrow a book every month.

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bunkerbewohner
Hm I haven't noticed prices being higher when I'm logged in with my Premium
account so far on Amazon.de. Also the delivery is super fast. Sunday night I
ordered a camera and it arrived monday evening. I'm pretty satisfied with
Amazon Prime.

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pbreit
I don't understand the complaint and the article's description is wanting.

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wnevets
I've actually noticed this myself. Kinda defeats the purpose

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rschmitty
I've had it happen as well.

My wife and I were comparison shopping around and she saw something on amazon
(she wasnt logged in) but when I loaded that item on my computer (I was logged
in) the price jumped up $10 and was available with prime shipping

It was still the cheapest we found, so we bought it anyways. But now we
comparison shop more.

Such a PITA of a dance to compare Amazon, Costco, and local grocery/big box

