Outpost.com Alters Course on Free Shipping - Again

Apparently, it is an e-tailer's prerogative to change its mind -- or at least be flexible.

Computer and electronics e-tailer Outpost.com (Nasdaq: COOL) said Tuesday that it will bring back free shipping on some items, a partial reversal of an earlier decision to abandon free delivery and the company's third shipping policy change of the year.

Kent, Connecticut-based Outpost said it would offer free ground delivery on purchases of US$500 or more.

"Our customers have been asking for a ground delivery option for heavier items," Outpost president and chief executive officer Darryl Peck said. "We feel that our low shipping costs, coupled with three delivery options, will allow us to retain our award-winning customer service levels."

Peck said the new ground shipping option will also be available at a cost for purchases of less than $500.

Back and Forth

Early on, Outpost had offered free overnight shipping on all purchases as a customer-acquisition device. The e-tailer abandoned that policy on February 1st, passing overnight and second-day air delivery charges to its customers.

Outpost said later that month that its decision to end free overnight delivery on all purchases had not hurt its ability to attract and retain customers, and had actually boosted average order cost as customers bundled purchases together to cut down on shipping prices.

At the time, Outpost said the policy change "had a minimal impact on revenue growth and the number of new customers acquired."

However, in what might be an indication that new fees were hurting its business, Outpost quickly changed course again, announcing cheaper shipping rates in late April. For instance, it dropped minimum overnight shipping fees from $12.95 to $5.95 and second-day shipping costs from $8.95 to $3.95.

Slugging it Out

While Outpost -- which marks its six-year anniversary this month -- has been lauded for its customer service in the past, it has struggled to retain the early lead it enjoyed in the computer and electronics e-tail world.

Last month, Outpost slashed 110 jobs and replaced CEO Katherine Vick with Peck, the e-tailer's founder and chairman. Chief financial officer Paul D. Williams III also resigned in mid-April.

Outpost has refused to offer long-range forecasts for its business, citing the need to raise additional capital.

Meanwhile, Outpost also said Tuesday that the gerbil that starred several years ago in the company's controversial commercials -- commercials in which the animal was shot out of a cannon -- would again be part of the company's marketing plan.