OKAY — WEIRD. I just posted this and it showed up as a RabbitPams post. I recently changed her role to include some admin privileges to help with our gallery and so when I signed in as admin, it seemed to attach to her name. Sorry about that, I have to figure that out asap!! Rabbitpam was NOT posting. It was me. I hope this post posts as me now! 
Ok so back to what I posted originally:
Shipping is really the bane of my existence! This is where the little guys sometimes lose out to the larger chains because having a small business myself (The BinkyBunny Store part), I understand the issues. Though sometimes in the very beginning, smaller guys do better with a few products and they still have a low overhead.
Some of the larger chains do a “smoke and mirrors” kind of thing that creates the illusion of getting free shipping or discounted shipping by raising the prices on certain items (sometimes they are the necessities) So they get some of their shipping cost back through the masses — and so you actually pay for the shipping in the price of a particular product(s). That’s why there is a minimum because in order for free shipping to happen, the profit for them has to be large enough. Now with that said, that can still be a decent deal if you want to buy in HUGE bulk amounts, but then you have to make sure you use it by the expiration date.
Then there is another part — Large companies have hubs throughout the U.S. which makes it cheaper to ship from. Smaller businesses may only have one or two locations and that means we may have to ship further, hence more expensive. I think APD is in Nevada, so that’s where they ship from.
Then there’s mass — large companies can sometimes get bigger discounts on products and shipping due to volume (but they also have more costs to house products etc). But due to the large amount of sales, they may be able to make a good profit even if if their profit margin on each product is lower. It’s like comparing making $1.00 on 1,000 orders as to $3.00 on 100 orders. Larger companies can do that while smaller companies already struggle to keep their head above water with the larger profit margin just because they can’t possibly sell as much as the larger chains.
The last is that some newer online based companies can get their shipping subsidized by investors to help them get into the playing field. It depends on how much the investment is, but sometimes this helps them give outrageously low prices with no or little shipping costs for a year or two (sometimes longer if they see it helping wipe out the competition and they can see coming out ahead) Then they can slowly raise the prices back up and begin making a real profit and they begin paying for the shipping in the cost of the product. Sometimes smaller companies are able to start with low prices, but I have seen so many vendors go under once they reach a sweet spot and the costs to grow make them less competitive – so they either get stuck where they are or have to raise prices later on or go out of business. It can be really hard for a small company later on to start off with low prices. I have seen many wonderful small companies go out of business this way because they don’t have the kind of investors to keep them afloat when they grow and the cost of growth is more than what their profit margin originally allowed for.
As a small business, it’s really hard to survive all of this. Everytime I see posts like this, I can’t help but let out a big sigh of defeat. We try and keep our prices low to help offset the shipping (We only charge what the carrier charges us) And when we did a poll about would you rather pay higher product price and get discounted shipping, or would you rather have the price of the product low and receive exact shipping costs, most people chose the later. However, in reality, that doesn’t seem to be the case, and it’s hard to struggle against the perception of free shipping (AND the reality of what larger companies can offer sometimes in some cases).
I think that it comes down to it, you have to do what you have to do for your own pocket book, but IF you are able, purchasing from a smaller business does wonders. Supporting small business helps in so many ways. Especially, when it helps support an educational and interactive community site…ehhem…like ours, as we do try to give back in this way. We also offer unique goodies that the bigger chains don’t offer, and so even if you do decide to order in bulk from another company, there are some really unique things that bunnies just love that may be cheaper to ship out because they are smaller and lighter.
APD does have great hay and they recently did begin distributing through Dr. Foster’s and Smith. But when I see the price differences, I really don’t know how APD stays afloat selling online their own stuff anymore as they seem to have to compete with the very company they are now selling to. Again, I’m sure selling in large amounts allows for a good profit right off the bat and that may be how they do it, but long-term, not sure how that works — But I guess they have that figured out.