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A free shipping mystery

romain.goyet.com

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Re: A free shipping mystery

#131

Post by robryan »

astrostl wrote: post #127
mey wrote: post #63

Earlier quoted context omitted.

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.

Assuming you benefit greatly from free trade. If everyone operated with completely free trade there would be big winners and big losers.

Re: A free shipping mystery

#132

Post by robryan »

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

Sending something from China to Australia is far cheaper than sending stuff a few suburbs across. Wouldn't surprised me if Australia started refusing to deliver to the door as well. Our local parcels are subsidizing the Chinese imports.

Re: A free shipping mystery

#133

Post by [deleted] »

mhb wrote: post #87
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…

If that made sense, why can't I get 3 cent wooden buttons shipped to me within the US for free?

[deleted]

Re: A free shipping mystery

#134

Post by robryan »

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…

You would be surprised though how fast thing can arrive, assuming they are aiming for fast delivery.

Amazon also allows you not to specify a shipping location, for things being forwarded into USPS the customer often won't even notice it originated on the other side of the world.

Re: A free shipping mystery

#136

Post by emilyfm »

aaron695 wrote: post #126
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.

One penny in 1840 would be around 20p today (http://www.nationalarchives.gov.uk/currency/).

First class post in the UK is 62p, so in real terms around 3 times as expensive as in 1840. (and the service in the 1840's had multiple collections and deliveries per day).

Re: A free shipping mystery

#137

Post by dTal »

I have often wondered this when ordering sub-$1 model helicopter parts among other things from BangGood.com. It's so much cheaper than any local source (2x-5x cheaper) on almost any item, even consumer electronics, it boggles the mind. How can this work economically? Or from another perspective, what's so broken locally? Is it just that Chinese labour costs less, and if the local supplier is buying in then it's also cheaper to just buy direct?

Re: A free shipping mystery

#138

Post by RealGeek »

rahimnathwani wrote: post #104
RealGeek wrote: post #102

Earlier quoted context omitted.

China's Government subsidies logistics to increase exports.

I've heard this before, but not seen any primary sources. Can you point to any?

Just searched and found this http://fortune.com/2015/03/11/united-nations-subsidy-chinese...

Re: A free shipping mystery

#139

Post by scholia »

mikeash wrote: post #130
scholia wrote: post #128

Earlier quoted context omitted.

> 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.

Yes, volumes are predictable, and no, it's still not really meaningful to talk about the cost of delivering a single item. You have to switch to network thinking -- and I'm sure there's plenty of C19th analysis to support it.

The real cost is the cost of running the network, not the cost of delivering an individual item. Think like that and you'll fail to understand why it's the same price to deliver a letter from Manhattan to LA as it is from Manhattan to Manhattan.

In this case, the problem is not the cost of an individual item from China. The problem is that the pricing incentivizes the sending of large volumes of items from China (where postal prices are low) to the USA (where delivery costs are high).

Unfortunately those prices were negotiated before (I assume) anybody realized it was going to be a problem.

On the good side, the USPS charges high prices to send items to countries with low delivery costs, so it's swings and roundabouts. If the traffic flows between China and the USA were equal, it probably wouldn't be a major problem.

Re: A free shipping mystery

#140

Post by scholia »

guelo wrote: post #54
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).

Whether the mailman delivers the 3 cent button or not he still gets up in the morning, does his delivery rounds and collects the same paycheck.

I'm reminded of the famous "discovery" that it costs $10 (or whatever) for a secretary to send a letter. Actually, the secretary costs $10 whether she sends a letter or not ;-)
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