Priority Mail vs Parcel Post

[shao.fu.tzer]

I recently purchased a BM 705BT-04 from a dealer on eBay (whose name I won't mention right now) and noticed as I was flipping through my e-mail that they shipped my knife using USPS Parcel Post. Now here's where I have a problem. I paid $5.99 shipping and handling. To ship one pound USPS Priority mail is $4.05. I ship stuff out all the time so I know there's basically NO difference in price at this weight class. In fact, in many cases, Priority is actually cheaper. So my problem is this - Why are so many business owners willing to make customers wait 2-4 times longer for their stuff just to save 30 or 40 cents?

Shao

 

[glockman99]

"Why are so many business owners willing to make customers wait 2-4 times longer for their stuff just to save 30 or 40 cents?.".

Because they are cheap bastards who think they are going to get rich.:barf:.

 

[pjrocco]

So my problem is this - Why are so many business owners willing to make customers wait 2-4 times longer for their stuff just to save 30 or 40 cents?

Shao

Shao,

Although I agree with you.. The answer to your question is pretty simple. Let's say you ship 10 packages a day 5 days a week. You save .40 cents per package. You take .40 cents times 260 days, thats $1,040 dollars a year. I know it's not much, but I would take an extra $1,040 a year.

 

[HDCharlie]

Shao,

Although I agree with you.. The answer to your question is pretty simple. Let's say you ship 10 packages a day 5 days a week. You save .40 cents per package. You take .40 cents times 260 days, thats $104 dollars a year. I know it's not much, but I would take an extra $104 a year.

Do believe your math is off a little there, bud. 10 packages a day at $.40 each is $4.00 per day. That comes to $1,040 per year, which makes the scenario a tad more profitable.

 

[pjrocco]

Do believe your math is off a little there, bud. 10 packages a day at $.40 each is $4.00 per day. That comes to $1,040 per year, which makes the scenario a tad more profitable.

haha... Yeah, I meant that... Thanks for the heads up.. Original post modified.

 

[Esav Benyamin]

How much does it cost to lose a good customer?

 

[TorzJohnson]

I realize that companies have to build in a little padding to the handling part of "shipping and handling" to cover their own expenses (shipping boxes, man-hours used on packing and addressing etc.). But some places really abuse it more than others.

 

[shao.fu.tzer]

I understand the $1000 extra a year thing, as I sell stuff on eBay. But I'm of the philosphy that a happy customer is a repeat customer. As Esav pointed out, I'd rather have someone come back and buy another knife from me than save 40 cents.

Shao

 

[Esav Benyamin]

I realize that companies have to build in a little padding to the handling part of "shipping and handling" ...

I look at it this way. A dealer has a certain amount of money tied up in each item, actually and potentially. That is, he's paid money for it and he'll pay money to advertise or communicate about it, and he'll pay to wrap and package and address it.

He needs a bit over that to pay for overhead: his shop, his lighting, heating, air-conditioning, and a beer on the way home. And he needs a bit over that as profit to make the whole exercise worth it to him.

It isn't hard to calculate how much of a markup he needs to meet these other needs over the cost of the item. He needs to list the item at that total price, and only add shipping, not handling, at the end.

If he calculates and controls his costs well, he can even go to flat-rate, low-rate shipping and make the customer feel like he's gotten a deal.

He will still have to charge the customer a fair price overall, but by putting the price up front, on the item itself, there are no surprises. That price is fair to dealer and customer alike.

Most of the complaints we get here are about poor communication or late shipping. THAT'S what irritates and alienates customers, feeling like we're not being noticed.