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A free shipping mystery

romain.goyet.com

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Re: A free shipping mystery

#71

Post by monochromatic »

scholia wrote: post #26

The postal service is a networked delivery service, just like the Internet. The difference is that the data packets are physical envelopes. Now, the cost of running the postal service is the cost of supporting the whole network of delivery vans, sorting offices, collections and so on, including all the staff. The cost of supporting the network is the same whether it carries a very large number of packets or zero pack…

That only gets you so far though.

> assuming it takes the mailman as little as 10 seconds to deliver the package, and given he is paid the minimal legal wage here, that would already cost… 3 cents already!

The marginal cost for delivering that button (even assuming the button itself was free) was more than 3 cents.

Re: A free shipping mystery

#72

Post by _delirium »

glenntzke wrote: post #41
CPLX wrote: post #20

Earlier quoted context omitted.

The problem might be Amazon here in this specific case, but I'd hazard a guess that this is just a subset of the massive drop-off in service that Amazon is experiencing due to a major transition to using USPS instead of UPS. Here in NYC Amazon delivery has gone from being amazing and magical to nearly worthless seemingly overnight with this change. UPS (and Fedex) didn't seem to have any trouble delivering even to ch…

NYC's USPS is notoriously unreliable, especially for those of us without the luxury of doormen. Despite living in a nice neighborhood with a vestibule that would certainly house a package just fine - and then include that the postman has keys to get to just outside my apt door - USPS packages are routinely lost, yet "delivered". Amazon at least mitigates this loss risk by unquestionably resending the package without…

In apartments in other U.S. cities I've had the opposite experience. USPS has been reliable, because the USPS mailbox array for the past two buildings I've lived in has included both the usual small boxes for everyone's mail, plus a few large boxes used to deliver packages. USPS sticks my package in one of the empty boxes, and slips the key into my mailbox. No problem at all for unattended delivery, at least for small- and mid-sized packages (obviously they can't deliver a TV there). But UPS and FedEx don't have any system like that installed, so they either leave you a "sorry we missed you" note, or just leave the package sitting somewhere unsecured.

Re: A free shipping mystery

#73

Post by monochromatic »

hobs wrote: post #67
tomp wrote: post #52

Earlier quoted context omitted.

I don't buy this argument. This might explain free shipping to France (the country), but not free delivery to the OP (the physical address). There's not way you can make even a short 1km delivery profitable for 3 cents (except if you're delivering for a whole building at once , which seems very unlikely).

The point is that transaction is not profitable but overall the system is. They get soaked on the 3c button, but as most people dont do this, they can absorb that cost and subsidize it with the rest of their profits.

Fine, but why would they? They're running the system anyway, sure... but why take a marginal loss on that 3 cent transaction?

Re: A free shipping mystery

#74

Post by SilasX »

Animats wrote: post #10

It's a combination of subsidies in China [2] and really low Universal Postal Union rates for terminal delivery from China to the US.[1] Terminal delivery in the US is about $1/Kg. Market rate from Shentzen to Long Beach to ship a container is about $1200 right now. [1] http://fortune.com/2015/03/11/united-nations-subsidy-chinese... [2] http://cep.lse.ac.uk/pubs/download/cp396.pdf

Why can't the postal treaties be something more sane like:

"Find the amount charged to domestic senders to go from the incoming drop-off point to the destination. Got it? Okay, if the foreign post drops it there, they get charged that amount."

Then, everyone gets charged the same, and you can't overcharge foreigners without also screwing your own people. Plus, foreigners get cheaper postage as they drop it closer to the final destination.

Re: A free shipping mystery

#75

Post by krschultz »

AliExpress is losing money on such sales. But why bother, then?

It has to be this. I work at an E-commerce company. We often do the math on just exactly which items make a profit for us vs which don't. It's not always obvious until you really dig into the exact costs of handling the items. I believe Alibaba has a lot of 3rd party resellers, it's possible they haven't done the math themselves.

Re: A free shipping mystery

#76

Post by jrockway »

monochromatic wrote: post #71
scholia wrote: post #26

The postal service is a networked delivery service, just like the Internet. The difference is that the data packets are physical envelopes. Now, the cost of running the postal service is the cost of supporting the whole network of delivery vans, sorting offices, collections and so on, including all the staff. The cost of supporting the network is the same whether it carries a very large number of packets or zero pack…

That only gets you so far though. > assuming it takes the mailman as little as 10 seconds to deliver the package, and given he is paid the minimal legal wage here, that would already cost… 3 cents already! The marginal cost for delivering that button (even assuming the button itself was free) was more than 3 cents.

What if it's like airlines, where the full-fare and business class passengers subsidize the economy class? Maybe for every 3 cent button, someone is paying more than the marginal cost for their shipping, so it all evens out in the end?

Re: A free shipping mystery

#77

Post by randrews »

Same reason chip manufacturers offer free samples.

Some portion of the people who buy one 3-cent button are going to come back in a couple weeks and order forty thousand 3-cent buttons. Free, fast shipping on the first button is to entice you to use that button for your design instead of someone else's.

Re: A free shipping mystery

#78

Post by jrockway »

glenntzke wrote: post #41
CPLX wrote: post #20

Earlier quoted context omitted.

The problem might be Amazon here in this specific case, but I'd hazard a guess that this is just a subset of the massive drop-off in service that Amazon is experiencing due to a major transition to using USPS instead of UPS. Here in NYC Amazon delivery has gone from being amazing and magical to nearly worthless seemingly overnight with this change. UPS (and Fedex) didn't seem to have any trouble delivering even to ch…

NYC's USPS is notoriously unreliable, especially for those of us without the luxury of doormen. Despite living in a nice neighborhood with a vestibule that would certainly house a package just fine - and then include that the postman has keys to get to just outside my apt door - USPS packages are routinely lost, yet "delivered". Amazon at least mitigates this loss risk by unquestionably resending the package without…

USPS always delivers my packages. When I see USPS I know I'm going to get the item on time (along with 600 outdated emails regarding the tracking, but I digress). I'm in 11201. (This does not apply with packages shipped internationally. They will claim to deliver it, ignore your redelivery requests and signature releases, and then whine at you incessantly when you go to the post office to get the package. But you do get the package at the post office, so that's nice.)

UPS also does a great job. I don't know how they break into my building, but they do. Once in a while the normal delivery person takes the day off, and you get the door tag. Fill out the form online and the package appears tomorrow. Not perfect but reasonable.

FedEx is awful. FedEx means I'm not going to get the package unless I happen to be at home and they happen to actually ring my doorbell.

DHL is also awful (the delivery mechanism of choice from amazon.co.jp to the US). I order a $10 magazine and they won't just leave the package at the door. In fact, they call me to see if I'm at home, say things like "oh, you didn't answer before, I'm not on the way there anymore so I can't deliver it" and other such bullshit.

Finally there are the taskrabbit-like shipping services, A-1, Lasership, etc. If you see one of those you aren't going to get your package. Just re-order it and hope you don't lose the lottery again. They can't even successfully deliver to commercial addresses with dedicated courier receiving and fully-staffed mail rooms.

Re: A free shipping mystery

#79

Post by chippy »

krschultz wrote: post #75

AliExpress is losing money on such sales. But why bother, then? It has to be this. I work at an E-commerce company. We often do the math on just exactly which items make a profit for us vs which don't. It's not always obvious until you really dig into the exact costs of handling the items. I believe Alibaba has a lot of 3rd party resellers, it's possible they haven't done the math themselves.

I imagine they are hoping to get some business from Amazon. A loss leader.

Re: A free shipping mystery

#80

Post by PanMan »

the-dude wrote: post #11
Animats wrote: post #10

It's a combination of subsidies in China [2] and really low Universal Postal Union rates for terminal delivery from China to the US.[1] Terminal delivery in the US is about $1/Kg. Market rate from Shentzen to Long Beach to ship a container is about $1200 right now. [1] http://fortune.com/2015/03/11/united-nations-subsidy-chinese... [2] http://cep.lse.ac.uk/pubs/download/cp396.pdf

In the Netherlands our postal service has already stopped delivering packages from China to your door ( very recently ). They just slip in a statement 'pick up here & here'. I guess they thought it was too much work too.

Only for stuff that doesn't fit trough the mailbox (and even then not always). They did tell me its a saving measure tho, as China pays very little
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