My rant about shipping cost

[WobblyHand]

Once again you’re not taking into account the cost of labor, warehousing, packaging and all the other costs. I doubt they’re making 50 cents on the entire transaction let alone that much on shipping

While profit margins do vary the average company selling through Amazon makes a profit of 15%. If that’s the case with R J Sakowski’s example the seller made about 41 cents.

I was using simple terms to avoid all the business expense terminology. And a toy example. The point really is the Amazon vendor's margin is reduced to "pay" for the associated costs of shipping, to make it appear more attractive to the consumer. Or the vendor has increased the sell price to make up for Amazon's shipping cost. As a consumer, we should be sensitive to total acquisition cost, which includes delivery. I often see product on Amazon (commodity grocery store like items) which are marked up to account for shipping. Grocery store aspirin, for instance is way cheaper in the store than on Amazon...

Free shipping doesn't really exist. There are always costs associated with it. Someone is subsidizing "free shipping", be it the seller, or countries.

 

[nobog]

Free shipping doesn't really exist. There are always costs associated with it. Someone is subsidizing "free shipping", be it the seller, or countries.

Agree... instead of saying "free shipping" it should say "shipping included".

 

[RJSakowski]

It's not being shipped for free. The item costs them 50cents. They are charging $1 for shipping and making 50cents profit. Or something similar to that. Basically increasing product cost to include shipping.

I realize it's not being shipped for free. It's being shipped to me at no charge. Amazon has a sweetheart deal with USPS for insanely low shipping rates. If they were paying what I have to pay for shipping, that $2 item would be $6 or $7.

I expect that Amazon is providing a low cost shipping benefit to their marketing partners so even items not stocked by Amazon can still be shipped at no cost to me.

 

[WobblyHand]

Not saying that Amazon doesn't add value by shipping at low to no charge. But they may increase the price to make up for some (or all) of it.

Simple example: Local grocery chain (Hannaford Brothers, 10 minutes away) generic aspirin 325mg 500 count = $5.29.
Amazon generic aspirin 325mg 500 count = $9.99. Seems to me one is paying $4.70 to deliver it to me, due to the marked up product cost. Sometimes that $4.70 is worth paying - especially if the store is far away, but it's a tradeoff you have to make.

So in this case, Amazon is effectively marking up the product cost to pay for shipment - and they are doing sweetheart deals with USPS to make (save) even more money. So they are saving twice and not passing that along to the consumer.

That being said, I'm sure Amazon has loss leaders, just like supermarkets do.

 

[ltlvt]

Are "shipping costs" as listed by a online vendor required to be completely paid to the actual carrier (UPS, FedEX, USPS ...)? I was under the impression that a company was allowed to charge whatever they wanted as a shipping cost, on the premise that they have to defray their own cost of boxing and handling the item. (Shipping and handling). Can they derive some profit off of "shipping charges"?

very good question

 

[ltlvt]

Maybe Congress could help us with this problem? Ya Think so?

 

[jwmay]

Are "shipping costs" as listed by an online vendor required to be completely paid to the actual carrier (UPS, FedEX, USPS ...)? I was under the impression that a company was allowed to charge whatever they wanted as a shipping cost, on the premise that they have to defray their own cost of boxing and handling the item. (Shipping and handling). Can they derive some profit off of "shipping charges"?

I have sold items in EBay where I added a flat shipping cost for an item that was going to take extra effort.
AFAIK, a seller can charge whatever they want and call it shipping. I’ve often seen items offered for far below market rate with a shipping charge greater than a thousand dollars. Idk if they actually ever get away with it. But Ebay ain’t gonna stop them from trying I guess.
Also I wanted to say a person pointed out that shipping cost should not have anything to do with the cost of goods. I see the error in my previous statement about that. You’re right.

 

[cathead]

Not saying that Amazon doesn't add value by shipping at low to no charge. But they may increase the price to make up for some (or all) of it.

Simple example: Local grocery chain (Hannaford Brothers, 10 minutes away) generic aspirin 325mg 500 count = $5.29.
Amazon generic aspirin 325mg 500 count = $9.99. Seems to me one is paying $4.70 to deliver it to me, due to the marked up product cost. Sometimes that $4.70 is worth paying - especially if the store is far away, but it's a tradeoff you have to make.

So in this case, Amazon is effectively marking up the product cost to pay for shipment - and they are doing sweetheart deals with USPS to make (save) even more money. So they are saving twice and not passing that along to the consumer.

That being said, I'm sure Amazon has loss leaders, just like supermarkets do.

One needs to know the expiration date on that bottle of aspirin as well since if it has short dating, it is well on it way to
turning into acetic acid. At least buying locally you can see what the expiration date is. The bigger size bottle in aspirin isn't practical for most people anyway.

 

[WobblyHand]

One needs to know the expiration date on that bottle of aspirin as well since if it has short dating, it is well on it way to
turning into acetic acid. At least buying locally you can see what the expiration date is. The bigger size bottle in aspirin isn't practical for most people anyway.

During the pandemic Amazon was selling all sorts of expired or close to expiration date stuff. If the materials are properly stored, it doesn't matter too much. I've used old aspirin to no ill affect. Actually, if you sniff old aspirin vs new aspirin they don't smell that different. I just did that yesterday, when I opened a new bottle. Exp. Date 2025 vs. 2019, no detectable difference in odor. Of course odor may not be an adequate marker for effectiveness.

Now if drugs are improperly stored, they can deteriorate. I can tell the difference in potency between medications stored in a bathroom or elsewhere. The ones stored away from moisture and thermal fluctuations last longer and are more effective.

 

[7milesup]

I just did that yesterday, when I opened a new bottle. Exp. Date 2025 vs. 2019, no detectable difference in odor. Of course odor may not be an adequate marker for effectiveness.

Smelling a drug to determine effectiveness seems like a folly. I have had some very old drugs sitting in my house and never noticed a smell.

The age of a drug does correlate to effectiveness, however. The older the drug, the less effective it becomes to the point of taking a placebo, although it would take years for that to happen.

Drug Expiration Dates — Do They Mean Anything? - Harvard Health

Are expired drugs safe and does the medicine expiration date really matter?...

www.health.harvard.edu