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A free shipping mystery

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Re: A free shipping mystery

#121

Post by scholia »

monochromatic wrote: post #73
hobs wrote: post #67

Earlier quoted context omitted.

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?

That's the wrong way to think about it! You need to think about the system not the individual transactions ;-)

Do you pay more for web pages from China than you do from the USA because they travel further? Why not?

The problem is that the whole accounting and tracking overhead would be far more than it's worth.

The only real issue is whether the total income from carrying traffic is bigger than the total cost of running the network.

Yes, there are anomalies with China because Chinese charges reflect Chinese costs (and government subsidies, if any). The fact that USPS has higher costs is not something the Chinese have to worry about -- or not until the US negotiates higher fees via the Universal Postal Union.

Otherwise, the USPS charges a lot for overseas mail, so it makes extra profits when that mail is delivered in low-cost countries such as China and India. On the whole, it probably breaks even or comes out ahead....

Re: A free shipping mystery

#122

Post by voltagex_ »

joemi wrote: post #113
taygetea wrote: post #99

Earlier quoted context omitted.

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.

Yep, sorry if I was unclear. FedEx has local offices around Australia, USPS is handled by Australia Post, UPS is handled by whoever has the contract at the moment.

Re: A free shipping mystery

#123

Post by Pxtl »

xur17 wrote: post #120
q3k wrote: post #118

Earlier quoted context omitted.

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.

Ali has already beat you to that and has Amazon fulfill some of their larger items.

Re: A free shipping mystery

#124

Post by ikeboy »

copperx wrote: post #66
glenntzke wrote: post #41

Earlier quoted context omitted.

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…

> Amazon at least mitigates this loss risk by unquestionably resending the package without additional charge. This exercise has grown tiresome. It's interesting that Amazon finds this to be cheaper than shipping it properly to begin with. Although it makes sense if packages sent through USPS are low-value and not just small.

They can get refunded from usps insurance, I believe.

Re: A free shipping mystery

#125

Post by eitally »

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?

And besides that, the commercial airlines do courier postal packages & letters for high priority stuff.

all the major courier services offer same day delivery across the US. I learned this when I flew from NC to CA and left my car keys in NC. I could have gotten them on the next plane to CA for about $300. It wasn't worth it.

Re: A free shipping mystery

#126

Post by aaron695 »

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…

This is just not true.

The internet example for starters is incorrect. See AWS for some idea on real costings. It's just most internet plans are a all you can eat style system.

The real answer is subsidies and trade agreements.

PS The penny post would be around one pound in today's figures, more than current letters costs.

Re: A free shipping mystery

#127

Post by astrostl »

mey wrote: post #63
tomp wrote: post #56

Earlier quoted context omitted.

From the article: > All this should be a reminder that any trade deal has winners and losers and unintended consequences. Obviously, whoever you subsidize is a winner. If you're setting up barriers to trade (e.g. tariffs), foreign sellers/manufacturers lose. If you're subsidizing imports, domestic sellers/manufacturers lose. Why can't we just not subsidize anyone ?! Free trade is supposed to be just that, free . Inst…

Free trade requires both sides to be equally free. Tariffs are one of the defenses against another nation massively subsidizing an export. Getting all countries to play fair (in this case neither subsidizing or taxing) isn't going to happen. You also run into the interesting situation of what is a subsidy that impacts exports/imports? For example, post great depression america started tax subsidy for farmers to ensur…

Hong Kong practices unilateral free trade, and it sure hasn't seemed to hurt them.

Re: A free shipping mystery

#128

Post by scholia »

mikeash wrote: post #40
scholia wrote: post #32

Earlier quoted context omitted.

> Ships, airplanes, trucks, and postal workers have substantial ongoing costs. Yes, those are the network costs, ie the cost of supporting the collection-and-delivery network. They're assumed to be (more or less) constant, regardless of traffic. You don't make any money running a network with empty vans.

By "ongoing costs" (maybe the wrong term) I mean costs related to the amount of traffic. The number of trucks or airplanes you need to run on any given day depends on how much traffic you carry. The amount of fuel you need to buy then depends on that. So does much of the maintenance you do, and how much you pay the workers. A postal network carrying zero traffic will be a lot cheaper to run than one carrying lots of…

> The number of trucks or airplanes you need to run on any given day depends on how much traffic you carry.

That might be how a delivery service works, but it's not how the post office works in almost all the countries in the world. Including, I suspect, the USA.

Post office networks are actually run as networks. They have drivers who collect from post boxes at regular times, sorting offices that work round the clock, postmen who do regular delivery rounds, and so on. The cost of running the network is, over the short term, almost impervious to the amount of traffic.

(Over the long term, of course, you restructure the network to cater for things like population changes -- again, just like the Internet.)

What you should realize is that a lot of people used to think like you before 1840, which was why the Penny Post was such a big deal. Network thinking made mail dramatically cheaper and led to a massive expansion in communications, and the whole system went global in a very short time.

None of that would have happened under the old system.

Re: A free shipping mystery

#129

Post by pdxandi »

monochromatic wrote: post #89
jrockway wrote: post #76

Earlier quoted context omitted.

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?

I mean, I'm sure it is like that. But you have to ask yourself, why bother with the 3 cent transaction?

Repeat business on presumably larger transactions?

Re: A free shipping mystery

#130

Post by mikeash »

scholia wrote: post #128
mikeash wrote: post #40

Earlier quoted context omitted.

By "ongoing costs" (maybe the wrong term) I mean costs related to the amount of traffic. The number of trucks or airplanes you need to run on any given day depends on how much traffic you carry. The amount of fuel you need to buy then depends on that. So does much of the maintenance you do, and how much you pay the workers. A postal network carrying zero traffic will be a lot cheaper to run than one carrying lots of…

> The number of trucks or airplanes you need to run on any given day depends on how much traffic you carry. That might be how a delivery service works, but it's not how the post office works in almost all the countries in the world. Including, I suspect, the USA. Post office networks are actually run as networks. They have drivers who collect from post boxes at regular times, sorting offices that work round the clock…

Isn't that just because volumes are highly predictable in the short term? It's not that the marginal cost per item is near zero, it's simply that the number of items is just about the same each day. It's still meaningful to talk about the cost of delivering a single item, and the strangeness of having a price that's well below that cost.
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