Date:         Fri, 3 May 2002 14:45:34 -0400
Reply-To:     The Bus Depot <vanagon@BUSDEPOT.COM>
Sender:       Vanagon Mailing List <vanagon@gerry.vanagon.com>
From:         The Bus Depot <vanagon@BUSDEPOT.COM>
Subject:      Re: scrutiny
In-Reply-To:  <00e401c1f2cd$6fa24ed0$6801a8c0@tdaoffice>
Content-Type: text/plain; charset="iso-8859-1"

> I have not often chimed into these rants about Bus Depot or
> others but I do
> believe that most online businesses charge excessive shipping charges. A
> small item that can be put in an envelope somehow with a 34 cent
> stamp still costs $5.


Speaking generally, there is a reason why most online or mail order vendors
have a minimum shipping charge. There are certain fixed costs associated
with shipping any order regardless of size, such as the time taken to pull
the order, box it, charge it through, etc., not to mention the cost of
materials (50-75 cents for the box, a few cents for packing tape, labels,
etc.).  So it costs a vendor a couple of bucks to ship any order, no matter
how small, before he even pays UPS or the post office for delivery.  Then,
add to that the cost of insurance, which is not included with that 34 cents
stamp (actually it costs nearly a buck) but is neccessary lest the recipient
say that he didn't receive the item.  Now, take that $2 item that you think
should have been shipped for 34 cents.  The profit on a $2 item may be,
perhaps, 40 cents. But the vendor had to pay about $3 or so in payroll and
materials cost to ship it, so he's starting out $2.60 in the hole.  I think
you can see where I'm going with this.  If everyone knew that they could get
a $2 item shipped for 34 cents, then they'd put a separate order in each
time they needed a $2 item.  At a $2 or $3 loss each time this happened, the
vendor would very quickly go bankrupt (or would have to raise his prices
across the board to cover the loss, which would not be fair to people who
placed larger orders).  Therefore most vendors (at least the ones who want
to stay around) do set a minimum shipping charge that prevents them from
taking huge losses on small orders, and encourages customers to group
together the small items that they need into a single order.  A couple of
years ago, before the year of the dot-bomb, some dot-coms (notably computer,
software, and electronics sellers) didn't seem to get this simple concept.
I loved being able to order a $2 cable at little or no shipping charge, and
have it delivered to my door rather than having to drive to the store for
it.  Funny,  those dot-coms are out of business now. :-)

Speaking for myself, the Bus Depot does not use shipping fees as a profit
center.  On average (that is, averaged out between all orders for a year),
we basically break even on shipping.  But this is an average, so on some
orders we make a profit and on some we take a loss. We're simply not big
enough for an advanced program that calculates precise shipping cost per
item when an order is placed (it would have to automatically add together
all of the weights, then consult shipping cost tables by zip code, etc.; not
possible with software that can be afforded by a small business), so our
shipping fees are based on a weighted average.  The result is, you may well
pay a bit too much on shipping on one order and a bit too little on another;
but over the long haul it tends to average out.

- Ron Salmon
  The Bus Depot, Inc.
  (215) 234-VWVW
  www.busdepot.com

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