When e-commerce first emerged, free shipping was not on anyone's radar. Paying for shipping and handling was just part of the routine, and consumers were more than happy to pay for the convenience. Unfortunately, that's no longer the case, and shipping costs can make or break an e-merchant.

The fact of the matter is that online shopping is no longer a novelty. It's simply how we shop. So now the convenience comes from features like quick checkout, faster delivery speeds, and yes, free shipping. When competing with giant e-retailers like Amazon, it's crucial to be able to match their prices, and like it or not, shipping makes a major difference.

Shipping Effects How Customers Shop Online

As silly as it may sound, the price of shipping is often more important to the consumer than the price of the item. Polls have shown that it's the second most common reason that people abandon their online shopping cart. If that's the case, then whether or not small e-merchants can compete with the giants comes down mostly to their ability to offer free shipping.

At first glance, that probably seems like an impossible hurdle. Shipping is a fixed expense, so if you're not working with the volume that Amazon does, you can't necessarily afford to cover it out of pocket. However, the price of the product is even more set in stone. As a small to medium sized retailer, you can't lower prices to counter economic pressures. Most companies can't afford those losses.