Free Shipping Becomes Freer

By Douglas A. McIntyre Published Mar 25, 5:26AM EDT

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The L.L. Bean website says the retailer will offer free shipping for any order placed with the company. Unlike other retailers there will be no minimum purchase price to qualify.

Amazon.com (NASDAQ: AMZN), the world’s largest online retailer, offers “Super Saver Shipping” for orders over $25. Anything below that threshold will only be sent if the customer pays for the transportation.

L.L. Bean thinks, it appears, that it can get more market share for its core product lines which include high-end clothing, outdoor gear, footwear, and luggage. Most of these items are relatively expensive. Why would affluent customers care as much about shipping fees as Wal-Mart (NYSE: WMT) shoppers do? How many people pay less than $25 for an L.L. Bean order? Most of the men’s pants the retailer sells cost more than $50. The company sells a very small number of shoes for under $25, but a pair of socks to go with the shoes cost another $10 to $15.

The only reasonable assumption that outsiders can make is that the free shipping offer is a marketing gimmick. It may make L.L.Bean shoppers think that they could get something for almost nothing if they bought a $19.95 pet place mat. Who would do that without buying a dog bed?

L.L. Bean probably also assumes that the free shipping announcement will get the company some positive press. Many consumers have never heard of L.L. Bean. The firm operates in a high-end niche market.

L.L. Bean expects, and expects rightly, that almost none of its customers will use the free shipping option. It it unlikely that any more than 10% of the products it sells cost less than that.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.