GF, Glenn knows the details about the accounting here, but I believe Amazon and everybody makes money off of "shipping and handling" charges - the actual charges are a cost of sales.
I'm not sure I stated it in that post but the way shipping works now is a vendor who requires shipping puts out for bids from all the shippers - for all of Dell's business (ok, some exceptions such as RMAs etc.), and then, from then on everything goes fedex. That is the problem with shipping charges I feel, not the per piece charges and technology can change this using an internet auction system or even some software that allows a comparison of rates.
For example Dell might want to use UPS for anything within a 1000 mile radius, because they charge by distance. US mail for documentation that is a replenishable item, fedex for the high end stuff.
What they do now is, once fedex gets the business, they wheel up a barcode machine to the pick release stage, there is no way to escape fedex this way (and thats the way they want it). What we need is a separate step in the middle there that evaluates the individual item. Again shipping chgs were small relative to all else in the past and thats why we have what we have. Imo introducing competition at the per-piece basis, with UPS and US mail in the mix, will drive priced down much more than fedex volume. There are enough shippers with different modes now, the problem isn't number of shippers. I'm not sure you got that from my post, anyway just an opinion. |
