Photo: Gasoline and truck drivers aren't free and neither is shipping from Amazon.com.
After spending nearly a decade in the retail industry, I’ve had the opportunity to work at two of the three largest retailers in the U.S. What I’ve learned is that even the savviest shoppers aren’t aware of what is included in the prices they pay. The following series of blog entries will explain all the hidden costs that all consumers should know so they can make an educated decision and find the best deal (part 3 of 10).
Despite what many e-commerce sites tell consumers, there is no such thing as free shipping. No consumer is happy about paying shipping for products, but products don’t magically appear at the store or your house. The only reason Amazon.com can offer their free “super saver” shipping, is because the profit margins on their products are so large that they can subsidize the shipping costs and still make money.
For some products like electronics accessories, these shipping costs are relatively insignificant to the total cost of the product. However, shipping furniture is expensive and it can represent 30% or more of the total cost of the product. If you’re getting free shipping, then the margin on the furniture is very high.
To get the best deal, you need to find businesses that have the most efficient transportation models.
For example, Home Decorators Collection (which is a subsidiary of Home Depot), has all its products shipped to a central warehouse in Missouri before it is sent to customers. Imagine you’re a customer in the San Francisco Bay Area. If you buy something from Home Decorators Collection, it is shipped from Asia to Los Angeles, Los Angeles to Missouri, and Missouri to San Francisco. That’s a lot of extra transportation and a bigger carbon footprint to match.
Most furniture stores have a more efficient transportation system than e-commerce businesses, because they can ship in bulk on long haul trucks. This is much more efficient than using UPS and FedEx. However, like all furniture retailers, product still gets sent to a regional warehouse before going to a store.
Deal Décor has developed a transportation model where product can be directly shipped to the customer’s city using long haul trucks. This transportation model is the leanest in the industry, which means Deal Décor can operate on lower margins and pass these cost savings to the end customer. If you don’t believe this article, check out the deals we’ll be offering in the San Francisco Bay Area starting in August. Reducing transportation is just one of the ways Deal Décor can save you money and get you the best deal on furniture.
