posted on December 13, 2000 10:25:20 PM new
With the coming rise in USPS rates, I predict a shift in profits away from sellers to the
USPS - at least in the first few months perhaps longer. Sellers with low priced items will be taking the hit as bidders seem to "factor" shipping into what they are willing to pay for an item.
We are meeting with FedEx next week to discuss setting up a FedEx ground account. I understand this service is somewhat slower than Priority Mail, but the cost is considerably lower. I have heard estimates of 20-60%+ lower depending upon location.
I know that sellers are reluctant to leave the USPS because of the so called "free"
supplies. [Geez, PayPal was not first with this bait and hook strategy, the USPS was!] But, most small boxes can be purchased in bulk for 20 to 65 cents. Labels and tape can be purchased in bulk as well. All this considered, shipping could be quoted to customers at greatly reduced levels compared to USPS. Priority Mail could remain an option for those in a hurry.
I am aiming for a competitive advantage over sellers that won't consider for USPS
alternatives! Probably most won't switch - should be a good year for us!
Seriously though, consider switching. Couldn't hurt to give it a try...
posted on December 13, 2000 11:45:16 PM new
Morgantown,
I would be very interested to hear what you find out about the FedEx ground service.
I agree with most of what you said. I think the postal increase will hurt a lot of sellers and do significant damage in terms of turning people off when it comes to buying online. I already get periodic complaints about the $3.20 Priority rate.
There's also my own bad feelings about the matter. I'm angered by the sharp postal increases -- in fact, I suspect they originate from the post office's desire to exploit the increased vplume of mail generated by e-business. I don't feel right asking other people to pay theose rates when I don't want to shell out that kind of cash myself.
posted on December 14, 2000 12:37:49 AM new
What really angers me is that there is no justification for the rise. If any privite corperation had the profits the USPS did and raised rates it would be denounced as inflationary and greedy.
I will consider them a privite company when I see them buying license plates and they sell stock.
posted on December 14, 2000 12:52:17 AM new
I,too am going to check into FedEx and also UPS rates. Both will pick up at my door and UPS includes some insurance,($100, I believe)
I'll probably stick with USPS on items that can go bookrate.
It would never happen, but I wonder what would happen if all ebay, Yahoo, and Amazon sellers boycotted the USPS?
I've already gotten ideas on another thread yesterday about saving on USPS insurance. That's $500-$1,000 a year that the USPS won't be getting out of me anymore.
posted on December 14, 2000 12:53:34 AM new
Fedex can not beat USPS priority prices for a comparative service. It's only going to be $3.95 for 2lbs and $3.50 for 1lbs and under. Fedex can hardly compete with the parcel post rates at the PO. Send the low price items parcel post, they won't be any slower than Fedex or UPS service, but will cost a lot less.
Add the price of your box in and you'll be paying the USPS priority rate anyway, but with slower delivery.
Fedex and UPS cater to large uniform shippers, they never have been able to compete with small and medium customers or price sensitive items. Large shippers pay more to Fedex and UPS, but they get customized service such as special pick up and on site handling.
The price of oil has forced the USPS to raise prices. But they are still the best deal going even with the increase.
Try UPS and Fedex, you'll be back to the good ole USPS, just as I did. Unless you're doing several thousand dollars a week in shipping, you'll find they're not too easy to work with and very expensive.
posted on December 14, 2000 05:21:35 AM new
I will also be going to FedEx or UPS. Once you add in the insurance and/or tracking with USPS, FEdEx and UPS will be cheaper. Remember when figuring FEdEx and UPS charges, you will pay more when delivering to residential addresses.
FEdEx Ground is really meant for business to business shipping. You can use them, but if you are shipping to what they call a rural area, you'll be adding $2.75 to the price for rural residential delivery. You may want to ask them about the new FedEx home delivery instead, if you ship primarily to residential addresses. There is a $1.00 residential surcharge VS a $1.25 residential surcharge with FedEx ground.
UPS is actually a bit cheaper in most cases, even with their $1.00 residential surcharge.
However, one reason I like the FedEx ground or home delivery options is that #1 you don't pay the pickup fee for the weeks you don't use them AND you can call when you need them to pick up. With UPS, you pay every week regardless AND you can only have the service with 5 day pickup. Being that I don't necessarily ship EVERY day, that may not work for me.
posted on December 14, 2000 05:28:56 AM new
This is a hoot!
If the increase in postal charges is going to put a Seller into the red....well then, that Seller had more problems than just a Postal Increase.
Pass on the costs....very simple. The buyers do not care about you or your troubles. Get used to it.
Customer service is fine....just stop bending over [forwards] for them.
If the costs for selling your widget is pushed out of range for the Buyer thru the addition of shipping costs then you are selling the wrong widget or paying too much.
And one poster above...needs to get a grip....or perhaps buy something that requires fuel to run.....unless they are distilling thewir own fuel....the costs of operating any motor vehicle has risen substantially.....and therefore the costs of providing delivery services. LOLOLOLOL!
posted on December 14, 2000 06:04:06 AM new
This is something I have no personal experience with, but I have seen several discussions on various boards in the past that indicate it can be extremely difficult to get UPS to pay insurance claims on breakable items - it was reported that they nearly always refuse, saying the item was not properly packed, no matter what.
posted on December 14, 2000 06:17:03 AM new
We have already had the phone calls and meetings with FedEx about their Ground and Home service and here is what we found...
For packages valued at $50 to $100 that you intend to insure and are being delivered to a major metropolitan area, it is cheaper to use Fedex. Provided it is a small item that can be packed in a box that cost no more than 50 cents to buy.
Any time you move outside of any of those parameters, the cost begins to escalate. If it is a cheap, small item, and you do not intend to use USPS DC or insurance, it is cheaper with USPS. (even after the rate increase)
FedEx Home is not available in most rural areas, so packages to these addresses must be shipped FedEx Ground and are subject to surcharges for Residential and Rural delivery. (The same is true with UPS) EX: A two pound package from coast to coast is $4.03. Add $1.00 for Residential, and another $1.00 for Rural Surcharge, and 25 cents for a box and you have a total cost of $ 6.28. That same package going to a business and having a value of $95 is a bit different. ( USPS: $3.20, plus .85 insurance, plus .35 DC = $4.40 vs. $4.28 FedEx or UPS.
Also, for the record, UPS and FedEx rates are identical on most shipments after you factor in the various surcharges.
The differences are:
FedEx will deliver coast to coast in 3 or 4 days vs. 7 to 10 with UPS.
FedEx will negotiate discounts with you based on your volume. We were offered discounts on various services of 10% to 25% without even squeezing them. We expect to be able to squeeze another couple points before we are done. UPS will not even discuss it unless you are shipping a couple thousand packages a week.
Supplies:
USPS: Free Supplies
FedEx Ground/Home: Expects to offer free supplies early next year
UPS: No plans to offer free supplies for UPS Ground service.
Software:
USPS: None Available
UPS: Proprietary Software for UPS services only and the database cannot be exported.
FedEx: Third Party software that will support shipping via FedEx, UPS, or print labels for USPS mailing. Based on your volume, they will provide you with a free label printer or complete computer system. The database can be opened with Excel for doing bulk mailings.
Once the FedEx Ground and Home services have been fully deployed, and they have the 100% coverage they have promised, they will no doubt be the superior choice. At this time, there are still many shortcomings. In 3 to 6 months it will be time for us to move from UPS and USPS to 100% FedEx. After careful evaluation, and numerous meetings and phone calls, we have decided to continue with business as usual.
posted on December 14, 2000 06:28:29 AM new
I know I am in the minority here
Canada Post is also raising their rates at the beginning of the year, and while I don't like increases in costs, I still believe that spending $4.00 to get a package from here to somewhere 3000 miles away within a reasonable time frame is not excessive.
posted on December 15, 2000 03:20:42 PM new
Mr.Jim....Thanx for the info....When you met with FedEx did they indicate to you that their home delivery personel are NOT FedEx employees, but rather contractors hired to work for FedEx & from my information at a very very low rate....I was very interested in investigating their home to home service (new in my area) until I found out this information...&...when one day I received a FedEx delivery from a rented Enterprise van....This makes me very leary that the person handling my packages has very little liability to actually do the job correctly....JMO
posted on December 15, 2000 05:15:22 PM new
MrJim:
Sorry for the delay getting back to this thread. Thank you for posting the in-depth information. Now I won't feel like my head is in a cloud when I speak with FedEx!
And to clairify, it is FedEx Home delivery that I'm interested in...
