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A free shipping mystery

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Re: A free shipping mystery

#111

Post by makomk »

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.

I suspect the vendor screwed up and lost money on sending that button. I don't generally see free shipping on anything much under a dollar on AliExpress which presumably says something about how much it costs to ship stuff. (Even then, some of them might be losing money. AliExpress doesn't have a good way of combining shipping costs for multiple items so if you want to offer competitive prices for customers who want to buy a bunch of different small items from you...)

Re: A free shipping mystery

#112

Post by wallacoloo »

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.

So I don't know much about how mailmen are employed, but there are a few scenarios in which it could turn out that the mailman would have been paid those 3 cents regardless.

The simplest: he's salaried. However, I don't think mailmen generally are.

Alternatively, the mailman is paid hourly but is expected to put in 40 (or some other constant) hours of work per week. His primary role is to deliver mail, but any extra time he has after doing his route he fills by sorting packages, filling out paperwork, etc. If he had a longer route that morning, he'll try to work through the sorting faster. If it was a shorter route, he might pace himself more casually.

You might say - in response to either of these - "but this doesn't scale! If there were fewer packages, the company wouldn't have hired as many mailmen and would have saved money!" Again, I don't know much about this industry, but in some (e.g. rural) areas, staffing might be done based more upon geographical coverage than the expected number of packages to be delivered per day. Furthermore, the company may be choosing to deliver such a package in order to secure its branding. Does offering to deliver this unprofitable (on its own) package lead to a promise of further, profitable delivery contracts? In the case of Alibaba & its courier, it probably did have some weight. Maybe the extra cost of having the deliveryman out on his route longer is offset by the advertising painted onto the delivery van.

It's difficult to measure the value of one very small piece of a big system because its the system as a whole which generates revenue, rather than each individual component.

Re: A free shipping mystery

#113

Post by joemi »

taygetea wrote: post #99
voltagex_ wrote: post #95

Earlier quoted context omitted.

Interesting! Getting a package from USPS in Australia is much better than getting one from UPS. USPS -> Australia Post means that I can get the parcel sent directly to my parcel locker [1] and get an SMS when the parcel arrives. I don't need to be present. UPS -> ??? means I'm guessing whether it'll be a local courier who has the contract or whether it'll be one of the many Toll [2] subsidiaries. No couriers are acce…

Those acronyms mean different things in the US. USPS = United States Postal Service, the official one. UPS = United Parcel Service, a different company

I think the parent meant USPS shipments always gets delivered by Australia Post (that's how USPS usually does deliveries in other countries: they use that country's official service), whereas UPS gets their packages delivered by an assortment of local carriers.

Re: A free shipping mystery

#114

Post by incompatible »

cha5m wrote: post #97
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…

But regardless why would a US delivery service allow the Chinese company to deliver things at zero cost, when they could clearly charge them more?

https://en.wikipedia.org/wiki/Universal_Postal_Union agreements mean that postal services are obliged to deliver foreign mail, and the amount they are paid for it is unrelated to their actual delivery costs.

Re: A free shipping mystery

#116

Post by xanderstrike »

jrockway wrote: post #76
monochromatic wrote: post #71

Earlier quoted context omitted.

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?

That's what I'm figuring. AliExpres's bread and butter is dirt cheap computer components and wholesale chargers and stuff for gas stations and the like. Their margin on that $100 android tablet is big enough to cover the shipping loss on hundreds of $0.03 buttons.

Re: A free shipping mystery

#117

Post by Spooky23 »

wallacoloo wrote: post #112
monochromatic wrote: post #71

Earlier quoted context omitted.

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.

So I don't know much about how mailmen are employed, but there are a few scenarios in which it could turn out that the mailman would have been paid those 3 cents regardless . The simplest: he's salaried. However, I don't think mailmen generally are. Alternatively, the mailman is paid hourly but is expected to put in 40 (or some other constant) hours of work per week. His primary role is to deliver mail, but any extra…

Letter carriers were customarily paid to run their route. In the old days, that meant you could find the mailman in the pub after his rounds.

Nowadays they audit them very aggressively. Also the migration away from letters to packages has led to the decline of the route and an increase in other mechanisms.

Re: A free shipping mystery

#118

Post by q3k »

applecore wrote: post #109

If you discover a product that sells for ten times more on Amazon than AliExpress, your first instinct should be to arbitrage the opportunity by ordering the product and selling it on Amazon (and letting Amazon handle the fulfillment: http://services.amazon.com/fulfillment-by-amazon/benefits.ht... ).

No, don't. When I go to Amazon, it's not for goods dropshipped from China. It's for things I want delivered quick and from reputable manufacturers and sellers.

We already have this problem in Poland with Allegro (local eBay equivalent), where people automate this at a large scale. You and up scrolling past tons of these items, because a) you don't want to wait 20 or so days for it to arrive from China b) you know you can get it cheaper from Aliexpress anyway.

Different sites, different targets.

Re: A free shipping mystery

#119

Post by nissehulth »

I'm in Sweden and I've ordered stuff like a single USB cable from China at a price less than USD 1. Still, free shipping, and $1 wouldn't even buy me domestic letter postage.

If the item is small enough, it usually arrive in a padded envelope in my mailbox. Bigger items I may have to pickup at the post office. Most often, it arrives within 2 weeks.

I suspect that postal services in different countries have some kind of peering agreement. That they simply assume that the amount of mail would be pretty much the same in both directions and because of that, they don't really charge each other.

Re: A free shipping mystery

#120

Post by xur17 »

q3k wrote: post #118
applecore wrote: post #109

If you discover a product that sells for ten times more on Amazon than AliExpress, your first instinct should be to arbitrage the opportunity by ordering the product and selling it on Amazon (and letting Amazon handle the fulfillment: http://services.amazon.com/fulfillment-by-amazon/benefits.ht... ).

No, don't. When I go to Amazon, it's not for goods dropshipped from China. It's for things I want delivered quick and from reputable manufacturers and sellers. We already have this problem in Poland with Allegro (local eBay equivalent), where people automate this at a large scale. You and up scrolling past tons of these items, because a) you don't want to wait 20 or so days for it to arrive from China b) you know you…

I think the op was referencing buying a bunch, shipping them to Amazon, and then selling them via FBA, so people can buy it with prime shipping.
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