why don't Amazon and other retailers charge for shipping based on postal zone?

General Questions
#1

AFAIK cost of shipping via USPS varies by location zone, i.e. the bigger the distance, the bigger the cost. Not sure if Fedex and UPS have similar rules.

Well, so why don’t retailers who ship by USPS adjust shipping price based on customer’s zipcode? I do understand that they often embed extra fees into shipping and so forth to raise the price, but still, why don’t they just add those fees as markup on top of the accurate shipping cost via USPS, hence avoiding subsidizing the faraway customers at expense of the nearby ones?

#2

They usually ship Priority Mail.

#3

The USPS charges the same rate for a package anywhere in the US. Now they’re even running ads saying that they charge the same rate for any weight (up to a certain limit) if you use Priority Mail mailing boxes.

There may be additional fees shipping to Alaska or Hawaii, but within the continental US, there’s no need to worry about zones for the USPS, and I doubt other services use them either.

#4

Amazon has warehouses all over the country.

#5

Because, generally, the companies doing the shipping, USPS, UPS and FedEx, don’t change shipping costs based on zones. Zones were used a lot in the past but have mostly disappeared. I suppose it was a lot like long distance telephone calls. I used to be that distance was a factor. When the volume increased and the system was adequate it didn’t matter if you were calling over a distance of 100 miles or 2000 miles as long as it was staying within the same system.

The capability of the shipping system has probably gotten to the point that the distance matters little. The cost is in getting the package into the system. After that, the distance costs are almost not worth distinguishing (as long as you are staying within the 48 contiguous states).

#6

Walmart.com does this when it ships to APO and FPO addresses. They claim the cost to ship overseas makes it expensive. It is completely bulls***. Walmart is doing this to scam people.

#7

The USPS web site allows you to determine postage and it always asks for the type of package, weight, and source and destination ZIP codes. Maybe it doesn’t use them, I never compared sending the same package to two different destinations.

#8

Not for Parcel Post;
http://www.usps.com/prices/parcel-post-prices.htm

#9

Yeah, but Amazon isn’t going to ship Parcel Post. That’s the slowest, lowest-priority method of shipping packages, a “it’ll get there when it gets there” method when you only care about shipping something super-cheap.

#10

Priority rates, user packaging, per http://postcalc.usps.gov/Default.aspx :

1 lb 6 oz package from Burlingame CA to San Jose CA: $4.95
1 lb 6 oz package from Burlingame CA to Sedona AZ: $5.75
1 lb 6 oz package from Burlingame CA to Phoenix AZ: $7.10 (huh???)
1 lb 6 oz package from Burlingame CA to Memphis TN: $8.10
1 lb 6 oz package from Burlingame CA to New York NY: $8.70

#11

so is this basically an unfilled market niche - low cost online retailing with the cheapest shipping available? The slogan might be “Ship Local! and screw the out-of-staters…” :slight_smile:

Then again, so if Amazon has warehouses all over the country, they must be able to undersell all remote competition by shipping shorter distances, right?

#12

The real reason is that if Amazon - or any other company - charged people more because they lived farther away from Seattle, a company based in New York would compete against them because they could make it less expensive for people who lived closer to New York. And so would a company based in Chicago and one based in Denver, etc.

It’s insane to discriminate against potential buyers because of where they live. Americans using American companies over the Internet don’t think of the companies as being located anywhere. And they certainly don’t want to be treated as if they were being penalized for living too far away from the company. So all sensible companies charge one standard shipping rate for anywhere within the country (or sometimes within the 48 contiguous states). It’s partially economics but mostly psychology. People do not shop based on price alone. Price is one of many factors that buyers, rational buyers, use to evaluate companies, services, and products.

#13

What I don’t get is how they are able to eat the costs for their free “super saver” shipping option. I ordered an exercise bike that weighed 50+ pounds and the item itself only cost $180, with absolutely free shipping. It confounds me.

#14

Large companies like Amazon surely have negotiated rates with USPS, UPS and Fedex. What you pay, and what they pay are worlds apart.

I.E Netflix does not pay 44 cents/dvd sent.

#15

There is an Amazon warehouse within sight of my window. Whenever I receive anything from Amazon it ***never ***comes from this warehouse.

#16

There are also flat rate options:
http://www.usps.com/prices/priority-mail-prices.htm

#17

I don’t pay shipping at Amazon. Any order over $25 gets free super saver shipping. I always buy 3 or 4 books at a time to get the free shipping. Otherwise it’s cheaper at my local Barnes & Noble.

#18

I wish to point out that there is no such thing as “free” shipping or anything else because TANSTAAFL. At some point in the chain there is still a de facto variable rate for shipping different distances. So, hypothetically, the savings resulting from that variability could have been passed on to the customer instead of being either skimmed off as profit or used to subsidize other customers.

#19

Post #12 by Exapno Mapcase, has the answer.

There is always a struggle between marketing and sales–who never want to add any charge to a sale that might get the customer’s back up–and logistics and accounting who need to worry about the actual cost of doing business.

As a general rule, (with some notable exceptions), you will find that the larger the company, the less likely they are to charge for shipping or, if they do charge, that they base it on actual shipping costs. Shipping gets treated as a cost of doing business, just like salaries and the oil to keep the machines lubricated, with millions of hours invested in determining just what that cost really is, and the big players try to keep it out of sight of the customer as if the customer were getting “free” shipping or, at least, low cost shipping.

#20

Well Priority Mail Flat Rate is just that, and that is what Amazon often uses. Now if you’re saying that the PO subsidizes it, there are apparently also cost savings involved.