Shipping Charges (and profit centers)

[DHallerman]

I was looking to buy a brakeset and a threadless stem from a bike-stuff vendor.

And the vendor is asking for $13 shipping.

That seems high for me, especially since it would be traveling not that far (I don't want to mention the location, since I don't want to "out" the vendor at this point).

Am I being too sensitive on pricing?

Or is the vendor using shipping as a profit center?

Dave, who has bought thousands of dollars of bike parts from scores of vendors and so believes he has some good sense of what shipping charges should be

[tiretrax]

I have found some shipping charges to be high and declined to buy the item, especially when it's a low cost item. There is a cost associated with the packaging, labor, and postage, so I think most charges are reasonable.

What get's my goat is that when I walk into a post office, UPS or FedEx, the rate I pay is often twice what I would pay to have something shipped to me. For instance, it cost me $80 to send a bike via FedEx, but when I bought a bike, it only cost me $35 or 40 to have the vendor send it to me. I doubt the store was taking a loss, so that's a pretty big markup.

[AngryScientist]

here's the deal : it's all a game, and the ending is what your credit card get's charged.

IMO, nothing else but the bottom line should matter to you, the consumer, as far as price is concerned.

if you're paying $100 for the item and $10 for shipping, or $110 for the item and free shipping, it simply doesnt matter. you're smarter than that, we're all smarter than that. dont get woo'd by low prices and high shipping. be a numbers man, look at the numbers. figure out the final cost to you. that's how much the product costs, who cares how they split it up.

[DHallerman]

be a numbers man, look at the numbers. figure out the final cost to you.

Uh, of course.

[benitosan1972]

I figure the shipping charged by the vendor/seller into the final price that I want to pay for the item. If it still seems reasonably better than I can find taking the time & effort going to an LBS or searching around, then I'll get it. At least shipping gets it conveniently to your doorstep, no effort required there. If it's too jacked and I don't agree with it, I'll simply move on to find a better deal or even ask if they can reduce the charges.

[oldpotatoe]

I was looking to buy a brakeset and a threadless stem from a bike-stuff vendor.

And the vendor is asking for $13 shipping.

That seems high for me, especially since it would be traveling not that far (I don't want to mention the location, since I don't want to "out" the vendor at this point).

Am I being too sensitive on pricing?

Or is the vendor using shipping as a profit center?

Dave, who has bought thousands of dollars of bike parts from scores of vendors and so believes he has some good sense of what shipping charges should be

Shipping charges are all over the place for stuff that comes to me. BIG boxes for not much, little boxes for a lot...all UPS...do some places try to pad the $, for the time to box, label, etc? Sure. Some boxes are picked up, some are taken to the shipping place. I once had a guy complain, he wanted to pay the 'actual shipping charge', I guess he ignored the s/H(andling) part. The stuff doesn't walk to the PO or FdeEx by itself. AND if they come and get it, you pay more.

[Levee Road]

I have found some shipping charges to be high and declined to buy the item, especially when it's a low cost item. There is a cost associated with the packaging, labor, and postage, so I think most charges are reasonable.

What get's my goat is that when I walk into a post office, UPS or FedEx, the rate I pay is often twice what I would pay to have something shipped to me. For instance, it cost me $80 to send a bike via FedEx, but when I bought a bike, it only cost me $35 or 40 to have the vendor send it to me. I doubt the store was taking a loss, so that's a pretty big markup.

The vendor who sold you a bike likely has a negotiated discount with the shippers based on their volume. That is something you don't have.

[jmoore]

There are a couple of ways to set shipping prices.

1. Charge the customer the actual price of shipping. This is labor intensive on the shippers part because they have to calculate shipping on every single order. That costs time but assures that customers are not over charged. This also introduces some uncertainty to customers because they want to know the price up front. So there is sunk time to calculate and communicate with the customer. This also potentially penalizes customers who live further away from the shipper. Why should someone pay more just because I'm shipping from Dallas and a saddle is going to Philly instead of Austin?

2. Set a fixed price for shipping be it one rate or tiered or whatever. This is easiest for the shipper and customer, although this introduces situations where customers purchasing low cost items pay a large percentage of product price for shipping. It also will likely cause the shipper to lose a bit of money on some items that cost more to ship but are over/under the price thresholds.

3. Companies who ship a lot get big discounts. They can ship a bike for $40 instead of $80 like you are charged.

4. International shipments introduce a whole other set of complexities.

I'm lucky because I only have one product and just set my prices based on quantity. US shipping costs are fixed and Intl shipping is a straight pass through. I lose a dollar or two on some shipping but make a bit on others, mostly dependent upon packaging. If I went to all padded envelopes, I could save some money but I'd have to pay for the envelopes and deal with all that. So the actual savings would probably be a push, so I ultimately return saddles in the packaging they were sent in.

[tiretrax]

The vendor who sold you a bike likely has a negotiated discount with the shippers based on their volume. That is something you don't have.

These folks don't ship a lot of volume. I asked how many bikes they shipped - no more than 10-15 a year.

One other factor to consider in evaluating shipping is how it compares to sales tax (and gas to drive to the LBS). The time factor is nil because either I am going to waste too much time searching on the net or driving 20 miles to the shop and yacking with my friends who work there.

[cendres]

Many good points have already been made, and I would like to add two things:

1. USPS Priority Mail. In particular Flat Rate. USPS supplies free packaging (boxes, envelopes and padded envelopes) and will pick up for free. This can be a great deal depending on the size of the item you're shipping.

2. Remember that the gree- er, fine folks at ebay are now charging something like an 11% Final Value Fee on Shipping. This forces sellers to bump shipping prices accordingly. Beyond lame.

[DHallerman]

Two more things:

1. The perception of over-charging for shipping can put off a customer. It did put me off, and I remembered I could get the same main item -- the brakeset -- from another vendor who offers both 10% and free shipping. So, who lost here?

2. USPS Priority Mail is also good with its Regional Rate boxes, A, B, and C. You can buy postage only online, and therefore you need to have the free boxes at home. But if the item is shipping in your wide region -- say from NY to DC -- the cost is far less than either Flat Rate or regular Priority. And while the weight isn't unlimited, even the smaller Regional Rate A box -- which is about the same size as a Medium Flat Rate -- goes up to 15 lbs.


Many good points have already been made, and I would like to add two things:

1. USPS Priority Mail. In particular Flat Rate. USPS supplies free packaging (boxes, envelopes and padded envelopes) and will pick up for free. This can be a great deal depending on the size of the item you're shipping.

2. Remember that the gree- er, fine folks at ebay are now charging something like an 11% Final Value Fee on Shipping. This forces sellers to bump shipping prices accordingly. Beyond lame.

[GRAVELBIKE]

The seller set the shipping price, and it is what it is. Maybe the item in question is being drop-shipped, and there's an upcharge that the seller needs to cover.

I spent nine years shipping many thousands of packages, and I can tell you first-hand that there's a lot more to it than most people are aware of.

[veggieburger]

...keep in mind that tracking #s are big bucks too. You can mail me a pair of shorts for $4 via regular ole airmail, or double digits with a tracking number. Paypal/Ebay strongly recommend the latter.

Also, many E-tailers bury their total shipping expense in shipping cost: bubble envelopes, foam peanuts, packing tape, custom boxes for large or awkward items, protective foam inserts, etc. If you paid $25 shipping on a box that cost $19 to ship, less than $6 profit has been made on postage, all things considered...

[DHallerman]

...keep in mind that tracking #s are big bucks too. You can mail me a pair of shorts for $4 via regular ole airmail, or double digits with a tracking number.

Uh, really. I don't think so.

I can send you a pair of shorts via Priority Mail for $5.15, and send you the tracking number.
Actually, I can have the USPS site send you the tracking number automatically if I have your email address.

Not big bucks.

Dave, who says he believes that Priority Mail package I sent today from NY to CA actually will go by air but they no longer call it airmail