I was going to buy a travel foldable massage table from a third party on amazon for $219 and, thankfully, checked return shipping before I did. To return it would have cost $378, confirmed by UPS. The package was 42lbs, 37x37x11 shipped from Florida NJ.
Out of curiosity, I decided to see if it was dimension or weight that made it cost so much so searched for a pair of Select Tech dumbells that weigh combined 100 lbs. I specifically chose a non-Amazon type behemoth; it was MyGymUSA from their own website. They were selling them on sale for $199 (on sale from $399 and that’s a legit sale because their $375 on Amazon) with free shipping . When I put in the weight and package dimensions and the zip code from where the company is based the return price was $193.
How can a company possibly make money or even breakeven on those? Either they have an insane deal from ups or/and are shipped from somewhere nearby but I just can’t see the remote economics of this. I checked the cost to send that package to a town 15 minutes from me and it’s still $147. Even if they have a deal, how much better could it be?
Can someone please explain how companies can ship these types of items and make a profit? Thanks
It’s a combination of 1) the price of the item sold includes a high enough margin (profit) [even discounted] to cover the shipping costs and 2) they have better shipping costs than you could get because of volume discounts they receive from shippers.
Well, that’s obvious. I was hoping for more of an explanation. It’s likely shipping costs but I don’t understand why ups would charge consumers such ridiculously high prices relative to even small companies.
Omar had it right. A business gets a much better deal than a consumer because UPS, or any other shipper, needs return business. Don’t worry, UPS is doing fine and can afford that discounted price. Remember, UPS isn’t a monopoly, and they have to compete for business just like everyone else. They charge consumers more because they can. If you don’t like it you can go somewhere else to ship your product back.
The true cost of shipping a parcel is pretty much the same regardless of the weight and size, up to a certain point. The truck has to collect from the warehouse carry it to another warehouse and then to you. At each point, the item has to be handled and sorted and when you consider the hundreds of parcels that will fit into a semi-trailer, and the thousands/millions in a warehouse, you can see how a major shipper like Amazon can get rock-bottom flat rates for their shipped goods. UPS will probably keep several trailers permanently at the distributor warehouse and just swap them when they are full.
When you ship your parcel back to Amazon at your own expense, the same parameters do not apply, and the carrier will charge all the costs they can get away with.
I don’t know if Amazon Prime is the same in the US as it is in the UK, but we always look for “free returns” on any goods we buy from them. I don’t even have to print labels these days - just hand them over the counter at a local store and flash a QR code at the scanner.
you - short of delivering yourself - have to pretty much accept any value the website throws back at you for shipping … and you have no leverage (UPS: YES, pls take your business elsewhere)
if you have 100s or 1000s of shipments per day/week/month you are a predictable volume on which capacity can be programmed (we need an extra shift before x-mas) and Cap-ex decisions could be based (e.g. getting a fully automated sorting station close to the premises of big-ass-company XYZ)
but, yes, it does feel arbitrary… esp. compared to a small company that might not have that much more packages than an ambitious-private-person.
IMHO that (shipping charge) is the KEY success-factor for Aliexpress et al … sometimes shipping within my city is more expensive than having stuff hauled over from china.
Basically if a private individual wants to send a package via USPS, UPS or Fedex and he can weigh the package and get the measurements himself he should not be buying shipping directly from those companies. Instead there are lots of third parties which offer discounts from those rates–and several have no subscription charges–so it’s just the cost of the discounted postage. For example for USPS and UPS I use Pirateship:
[The 89% savings is very extreme–usually much, much lower]
I always assumed volume was the answer. Plus, businesses are in the Business district, more often, and so on a regular pickup route with volume. The disruption of one-off or occasional pickups is more of a hassle.
You could see the same thing with bulk snail-mail. Provide a huge pile of mail, presorted by postal code/zip, and the cost per item is far less. Use a postage meter or preprinted envelope with license number, so checking for appropriate postage is not a hassle,
One of my relatives flies for a large commercial airline and mentioned that through them, he gets special deals on FedEx (i think it was) maybe so they could mail forgotten items overnight or send their shopping home if it was bulkiy or inappropriate for airport security.