For years, free shipping was a bonus—a perk that retailers used to entice customers. Now, it’s a non-negotiable. According to a new FedEx report, more than 80% of consumers prioritize free shipping, and 76% say it influences where they shop. But while customers expect it, free shipping is anything but free. Someone is footing the bill. The question is: who?

For big players like Amazon, Walmart, and Target, offering free shipping is part of their dominance strategy. They have the scale, fulfillment networks, and membership programs to subsidize shipping costs. But for smaller retailers, the math is brutal.

Many e-commerce brands can’t afford to eat the cost of shipping, so they pass it on in subtle ways:

• Raising product prices to offset shipping expenses.
• Setting minimum order values to make free shipping cost-effective.
• Using slower, economy shipping to keep costs low. 

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