With the holiday season approaching, many people who don't shop online regularly are going to take advantage of e-commerce sites to save both time and money. And, smart shoppers are likely to use one or more of the many price comparison sites including free listing sites and sites that charge merchants to list their products.
When you compare prices, make sure that you factor shipping costs into the mix. With competition for online stores, actually ALL stores, being so tough these days, some retailers tend to "gild the lily" so that their products appear to have the lowest total cost on price comparison sites.
Shipping has risen quite a bit over the last couple of years, in part due to fuel costs and fuel surcharges. In addition, some shippers charge a standard weight for odd-size or large packages. Because of rising shipping cost, many online retailers continually review shipping options to make sure they offer the best deals to their customers, no matter how they calculate shipping. Others aren't as careful which can make it difficult for customers to quickly and easily get accurate shipping rates.
This article explain why this is so and provide tips on to help make sure you really get the best deal.
Difference between Free and Paid Price Comparison Sites? Free shopping comparison sites do not charge merchants to list their products. Others charge merchants a fee every time someone clicks on an item shown in their listings. Many retailers don't use pay-per-click sites because as window shoppers can quickly ring up large bills without intending to make any purchases.
In general, consumers get a wider selection of products when a free site is used. But, it's hard to tell if it is a pay comparison site or not. If you really want to know, look for a link that says something like "For Merchants," or "Merchant Log In" and review the information on that page.
Basics about Shopping Online
In addition to price comparisons, consumers should also look for certain things on an online storefront to make sure it offers secure check-out and does business legitimately. As with most things, if something seems too good to be true, it probably is. Make sure you deal with secure sites that offer credentials about protection offered to customers.
If you see icons that note a payment processor or other credentials, click on them to make sure they are legitimate. Real ones usually provide information about the site managers.
The quality of a site is also important. Sites should be updated regularly, look professional and appear to have some time involved in the design and maintenance. Why: if you need to return the item or take advantage of a manufacturer's warranty, you want to make sure that the online merchant will still be there in one, three or twelve months.
Compare Apples to Apples, not Apples to Basketballs!
Many online stores advertise free shipping. Of course, there are no free lunches and there really isn't "free" shipping. Free shipping means that the merchant builds shipping costs into their overhead and product prices. Free shipping primarily is used for three reasons.
First, it is easier for the merchant because as each order does not time-consuming calculation of shipping costs for each sale.
Second, it's easier for the consumer to compare prices with free shipping as there are no surprises when you check out, or when you get an additional charge a day or two or even three after you make place your order. Read on and find out why.
Finally, free shipping and flat shipping fees are far more accurate for the consumer and more convenient when comparing prices.
If an online retailer does not offer free shipping or a flat shipping fee, then the actual shipping cost will be tallied and added to your credit card (or PayPal) account hours or even a day or weekend AFTER you place your order.
Be Careful of Estimated Shipping Costs
Sure, when you go to check-out you will get an estimate, but it is only an estimate. Most sites with estimated shipping costs provide a notice at checkout that says something like "Please note that this is only an estimate, actual charges will be calculated at the time of shipping." And, most of the time you visit a site with estimated shipping charges, you won't even see the estimate shipping fee until checkout. It may or may not be an accurate estimate.
The final shipping cost can only be determined after a shipper has entered the package into its system. Period.
For example, a person that lives in a single-family home may be charged a different shipping fee than a person who lives four blocks away in a condo or an apartment building, as multi-family dwellings require "extra work" for the delivery person. Unless a merchant specifically states that the shipping cost is as stated in checkout, you are likely to get hit with additional charges later. And the time between when you place your order and find out the final bill depends on when the retailer processes the order and when it is picked up and processed by the shipping company.
Some retailers process all orders at the end of the day, others two or three times a week. The items themselves may be shipped that day or the following day. So if it is a Friday or a weekend, the true shipping cost may not be available until late in the day on Monday.
Aside: Why Merchants Require Customers to Set Up Accounts
If you haven't shopped online in a while, this holiday season you'll note that many merchants require account set-up prior to checkout. Creating an account with the store can take several minutes and sometimes requires you to enter your payment data whether you make a purchase or not. While this may be annoying, it is an important fraud protection measure recommended by most payment processors and insurance companies.
It lets the merchant spot red flags of fraud, such as a billing address in Illinois and a shipping address in Texas. Our store policy, for example, is to contact the card holder whenever the shipping address is different from the billing address to make sure the purchase is a gift, not a fraudulent purchase to an untraceable location. There are other red flags the Account Set-up process alerts the merchant to.
Unfortunately, stolen credit cards or credit card numbers often go through until the card holder becomes aware of the theft and reports it. And far too often, this is not until the next time they go to use the card and it can't find it or worse, when they read their billing statement.If the products have been delivered, the merchant is responsible for the loss.
On the bright side, these precautions measure will protect you case your credit card or credit card number is ever stolen! And with reduced fraud and fraud risks, merchants can offer lower prices and better serve customers.
Real Examples from Popular Site Comparison Sites
We selected solar lamps and did a search to compare prices, including shipping costs. We got a list of several sellers and prices, including notes as to whether the product had free shipping,a flat shipping rate or and estimated shipping cost. One search we did for a solar lamp post showed prices ranging from 6.27 to 3.95, with listings that noted free shipping and estimated shipping.
The lowest price was 6.67 plus an estimated shipping cost of .47. We tested that shipping cost using three different but real addresses, one in New York City, one in Florida and one in California. The total of the solar lamp actually came to least 5.74 for all three addresses, more than many others on the list. And, all three locations had the same estimated shipping cost which was odd, as distance is a key factor in shipping fees.
And, as with all products with estimated shipping,we received a notice like we would be notified of the final price once the product had been shipped.
What if you don't like the final price? Good luck: many sites treat cancellations as returns and can charge up to 20% to cancel the order. Another site we tested the shipping price for the same product did not even provide a shipping estimate at checkout. Instead, they provided a form for us to fill out. Keep in mind: this was on a Friday afternoon, meaning we were unlikely to get a response until Monday. Not exactly a customer-friendly merchant.
Remember: if you have difficulty determining an item's final price or other key information for that matter, what happens if there is a problem with the product or its delivery? Difficulty accessing information from any site is a sure sign to shop elsewhere.
We closed out of that check-out cart immediately and went on to test other products. The results were pretty much the same. When estimated shipping costs or flat shipping costs were factored in, prices the prices generally were equal to or more than the products listed as having free shipping.
Merchants Know That Time Invested is Key to Purchase Decisions
One thing all merchants know is that time is important, and that saving time is one reason people shop online in the first place. So, even if a shipping cost is higher than the estimate, many people continue with the order figuring that all shipping costs are more or less equal. Well, this is just not true!
There are some retailers who intentionally or unintentionally provide very misleading shipping costs to comparison site so that their price appears to be the best. A price comparison for one solar light provided the following results:
Available at Store A for .99,plus shipping(estimate not provided) Available at Store B for .99, estimated shipping .00 Available at Store C for .99, free shipping
At first glance, the best deal looks to be at Store A. If Store B estimates shipping at .00, one can reasonably assume that Store A's shipping cost is pretty much the same. And forget about Store C, why are they charging more and saying free shipping? Right now, it really doesn't seem to be a good deal. But hold on! This is where you need to take a few extra minutes and do your research.
We visited Store A and selected the solar light priced at .99 plus shipping. At checkout, the shipping was calculated at .00, for a total cost of .99, and the site noted that additional charges were possible.This is often the case. Since the purpose of product comparison listings is to attract as much interest as possible, some people play fast and loose with shipping costs.
Next, we went to Store B and ordered the same light for .99 expecting the estimated shipping cost to be about .00. But, at check-out, the not quite final shipping cost was , for a total product cost of at least .99. This is not common, the store's comparison listing accurately stated that it was an estimated shipping cost. Most sellers do not intend to mislead potential customers, but some take every advantage they can. Store B may not have updated their shipping costs recently, could have been unaware of fuel or package size surcharges, or estimated that their customer base lived closer to the origin point than the address we entered.
Finally, we went to Store C and selected the solar light for .99 with free shipping. At checkout, the final cost was is .99. So, what originally looked like the most costly product was really the least expensive.
White Lies and Tricks to Avoid
We searched a different solar light that on price site comparison sites ranged from .99 to .99. One listed for .99 was noted to have free shipping. But, when we went to the site, we found out that free shipping only applied when the total order was 0.00 or more.
Many price comparison sites are clamping down on this and other tricky wickets, so its seen far less than in the past. Still, some merchants figure out ways to get these type of things into site comparison listings.
Another of our pet peeves are stores (and there are more than a few of them) that say "Free Shipping Today Only!" As a retailer, we check our competitors' sites and prices regularly. Some use this practice and we see the same products as having "Free Shipping Today Only" every time we visit.
Is this wrong? That depends on how you look at it. On one hand, free shipping is free shipping. On the other hand, the point is to have consumers make quick purchase decisions. Our main issue with this gimmick: what other white lies are there?
Bottom Line: Take all shipping estimates with a grain of salt. If you really want to compare apples to apples, look for flat rate or free shipping. Ultimately, it's up to the consumer to do the extra work and to get the best prices. You need to balance the time it takes to do your homework with what saving you could save, because shipping can be a good percentage of the total product price.
