We have changed many of our behaviours as a result of the Covid-19 pandemic. One change many of us have made is to switch to online shopping. With so many companies offering free delivery, what’s not to love about online shopping? Well, when you stop to think about it, there are some serious negative consequences to online shopping. Here are a few.
Small Business Killer
Once you get used to free shipping, you come to expect it everywhere. The thing is, there are only a few businesses who can actually afford to provide free shipping. They’re not your local business, either. Major online retailers like Amazon have the deep pockets necessary to be able to offer free shipping, and the major reason they started offering it was to drive their competition who couldn’t afford it out of business.
That’s right. Free shipping drives smaller companies out of business. Here’s how.
- Big Company A and Smaller Company B sell the same products.
- Company A offers free shipping. Company B does not.
- Because they offer free shipping, more people buy from Company A than Company B.
- Eventually, Company B becomes unprofitable and goes out of business.
Most small businesses can’t afford to offer free shipping. The cost of shipping an item comes directly out of the profit the merchant would have made. They can counter that by raising their prices, but then they’ll be priced out of the marketplace. Either way, they lose.
The big online retailers have several advantages over smaller merchants. First, they are usually able to negotiate lower prices for the merchandise they buy, so even if they sell at the same price as the smaller merchant they are making more profit per unit. Second, they are also able to negotiate lower shipping costs for the things they ship based on a higher overall volume. Third, they have usually raised tens of millions of dollars for their business through selling shares, so they have deeper pockets than your average small business.
If you support small business, then purchase from them. If there’s a shipping cost involved, pay it. Put your money where your mouth is.
Destroyer of the Environment
When you order five items from some online retailers, those items are not always delivered together. You can have up to five deliveries for those products. How exactly is that good for the environment? Short answer: it’s not.
- Deliveries are packaged separately, resulting in more waste. Even if the packaging is recyclable, it had to be created which took more energy in the first place. Remember the first “R” in the “Three R’s”: REDUCE, then Re-Use, THEN Recycle.
- Up to five separate deliveries instead of one single delivery uses more gas and creates more emissions.
- The faster you want it, the more emissions you create. Companies have to use smaller delivery companies to get you those products faster, meaning the delivery won’t be made using a regular delivery truck, but may be made by a special trip by a driver in a small van or personal vehicle. These inefficiencies aren’t noticed by the consumer, but we all pay for it through dirtier air and more congested roads.
Creating Unstable, Low-Paying Jobs
Working as a driver making deliveries for major online retailers is not a well paying job. Depending on where you live, working as a delivery driver could pay lower than the minimum wage. The website for Amazon Flex says “most drivers earn $22~27 an hour”, with the caveat that actual earnings depend on “your location and how long it takes you to complete your deliveries, and other factors.” (Source)
What they don’t tell you is that those “other factors” include the cost of your gasoline, vehicle maintenance, and increased insurance rates. After expenses, that $22~27 an hour doesn’t work out to as nearly as much.
Amazon Flex drivers are considered subcontractors so have no protection under Ontario’s employment laws, are not entitled to a minimum wage, or other basic labour protections set out for employees in this province.
The “gig” economy might be great for some people, but those are usually the people at the top of a company or its shareholders. The people doing the work are working for low wages with no job security or labour protections. Most folks agree these aren’t the jobs we want our economy to be creating, yet this is exactly what we’re doing when we expect merchandise delivered quickly and for free.
The Cult of Free Shipping
The 2nd definition of “cult” in the Merriam-Webster dictionary says a cult can be a “great devotion to a person, idea, object, movement, or work”. In this case, we have been brainwashed to be devoted to the idea that free shipping is a good thing. The reality is that the expectation of free shipping is helping kill off small businesses, causing negative effects for the environment and our health, and creating unstable, low-paying jobs. Ensconced in our homes, we happily pick up our packages at the door and are blissfully unaware of the harms we are propagating on our communities.
What can you do? Think about what you value the most. Free delivery, or healthier communities. Your choices do make a difference, so choose wisely.
And, in general, avoid cults 😉