Why We Don’t Care How Much We Pay for Shipping

 

In my last post, I shared a real life example of a company that could have saved over $2,000 on shipping. I explained that ground service was guaranteed and would arrive at the same time as 3 Day Select for specific zip codes. I asked him if he would begin to compare rates and his response is astonishing—yet one I have heard too many times. He said no.

“Why?” I asked.

“Because we bill our customer for the shipping charge.” He responded.

“But you could save the customer 50% on those packages.” I replied.

“It doesn’t matter; it is too much of a hassle to change and it doesn’t save us any money.”

I see his point. Yet this is a serious problem. The carrier is the only one that benefits from this scenario. Why should he change? Why should he try to set up a system to compare service levels if it does not save his company any money?

What do you think?

Advertisements

One Response to Why We Don’t Care How Much We Pay for Shipping

  1. Jason says:

    Sorry, hit submit too soon.. Starting over, feel free to delete above post

    Hi Mike,
    You ask a good question. Anybody in business right now knows, it is a very competitive market right now, maybe now more than ever. Not only do you need to be competitive on your product pricing, but if another company offers the same product at the same price as yours, AND as your example above, can deliver it to them at 50% less than you, who is that customer going to purchase from.

    So I think the quote “it doesn’t save us any money”, may be partially right, as you do not “save” any money, but I think you would be potentially losing it by the truck load. 50% is 50%, customers have caught on to the high shipping game, they are now looking at product price and shipping price.

    Personally, and I hope everyone does, I compare product price AND SHIPPING price before making a purchase. So the Company above, if they have competition that offers ground service, I am going with the competitor.

    Jason

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: