{"id":1115,"date":"2018-04-02T20:47:23","date_gmt":"2018-04-03T00:47:23","guid":{"rendered":"http:\/\/community.mis.temple.edu\/seminars\/?p=1115"},"modified":"2018-04-02T20:47:23","modified_gmt":"2018-04-03T00:47:23","slug":"huseyin-cavusoglu","status":"publish","type":"post","link":"https:\/\/community.mis.temple.edu\/seminars\/huseyin-cavusoglu\/","title":{"rendered":"April 20 \u2013 Huseyin Cavusoglu to Present \u201cIs Free Shipping Really Free? Strategic Implications of Membership-Based Free Shipping Programs of Online Marketplaces\u201d"},"content":{"rendered":"<p style=\"text-align: center\"><strong>Is Free Shipping Really Free? Strategic Implications of Membership-Based Free Shipping Programs of Online Marketplaces<\/strong><\/p>\n<p style=\"text-align: center\">by<\/p>\n<p style=\"text-align: center\"><strong>Huseyin Cavusoglu<\/strong><\/p>\n<p style=\"text-align: center\">Professor of Information Systems<\/p>\n<p style=\"text-align: center\">Naveen Jindal School of Management, University of Texas at Dallas<\/p>\n<p style=\"text-align: center\">\n<p style=\"text-align: center\">Friday, April 20, 2018<\/p>\n<p style=\"text-align: center\">10:30 AM \u2013 noon<\/p>\n<p style=\"text-align: center\">Speakman Hall Suite 200<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Abstract<\/strong><\/p>\n<p>We examine the membership-based free shipping (MFS) program offered by some online marketplaces in which a retail platform bears the shipping costs for purchases made by members that have paid an upfront fee, but non-members bear the shipping costs themselves. We show that the membership fee collected by the platform from members does not cover the cost of shipping products to members for their purchases during the membership period. While it may appear from this finding that the MFS program benefits members and hurts the platform, we show the MFS program actually benefits the platform when the shipping cost is less than a threshold value, which is increasing in the commission rate the platform earns from the third-party sellers. However, the gain from the MFS program is not necessarily decreasing in the shipping cost either. The MFS program always hurts non-members; it may also hurt even members. The demand enhancement, price increasing, and negative externality effects of the MFS program explain the results. Our findings imply that judging the success of the MFS program to either the platform or members solely based on the membership fee and shipping cost is misleading and that the MFS program is most attractive to the platform when the shipping cost is neither too low nor too high. Finally, the society can be worse off under the MFS program because the MFS program may stimulate demand from some low valuation and high misfit cost members who would not make a purchase in the absence of the MFS program, but the surplus enjoyed by these members is offset by the shipping cost borne by the platform.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is Free Shipping Really Free? Strategic Implications of Membership-Based Free Shipping Programs of Online Marketplaces by Huseyin Cavusoglu Professor of Information Systems Naveen Jindal School of Management, University of Texas at Dallas Friday, April 20, 2018 10:30 AM \u2013 noon Speakman Hall Suite 200 &nbsp; Abstract We examine the membership-based free shipping (MFS) program offered [&hellip;]<\/p>\n","protected":false},"author":11079,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[783211,783213,783212,72438,384495],"class_list":{"0":"post-1115","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"tag-free-shipping-program","8":"tag-huseyin-cavusoglu","9":"tag-online-retailing","10":"tag-platform","11":"tag-ut-dallas","12":"entry"},"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/posts\/1115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/users\/11079"}],"replies":[{"embeddable":true,"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/comments?post=1115"}],"version-history":[{"count":1,"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/posts\/1115\/revisions"}],"predecessor-version":[{"id":1116,"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/posts\/1115\/revisions\/1116"}],"wp:attachment":[{"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/media?parent=1115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/categories?post=1115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/community.mis.temple.edu\/seminars\/wp-json\/wp\/v2\/tags?post=1115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}