Remember that package you ordered last week? It should be arriving any day now.
After years of priming us to expect speedy deliveries, the ever-growing e-commerce economy is weaning us off them—and no one seems to mind.
The pioneer of same-day delivery—Amazon—whose deliveries were so quick that the rest of the industry hustled to match them, now offers some customers a 7% discount if they select a later arrival date.
Gap provides as many as five options, including what it labels “no rush” shipping that its website says can take up to nine business days. It is typically the cheapest option—or free, depending on the value of goods purchased.
BirdieBall Golf, a retailer that sells putting mats and other golf accessories, offers an economy shipping option with delivery dates that are as long as two weeks from the date of purchase.
Shoppers, it turns out, can be patient if it means saving money.
For years, online retailers were willing to eat the cost of fast shipping in the battle for customers. But shipping costs have increased sharply—especially for home deliveries—and offering near-instant gratification for online orders is no longer a sound business strategy for many.
My grandmother, who lived in a rural area, Cornwall-on Hudson, NY, used to order from the Sears Roebuck catalogue, and standard delivery times back then were 6 weeks.
I remember leafing through those huge catalogues and learning a lot because they had everything–why would a 7 year old know that both a truss and a milking machine could be delivered to one’s door?
My husband and his cousins tell me about clothing deliveries to their apartments, when many items of clothing would be sent for their perusal from de Pinna, Saks, Bergdorfs, etc. and they just tried on the clothes at home and sent back what they did not want to buy.
People here in NYC also used to shop and say, “Charge and Send.”
Years ago, I bought so many more books at Strand when I asked them to ship via USPS Media Mail.
I wonder when the red and black lines on the power point will cross over and retailers will start taking action on the free liberal return policies epidemic. Once shareholders comprehend how much they willingly give away, it will become as hated as offering healthcare to employees.
It was always a race to the bottom, and as with all such races, there are only temporary winners on the way down, and then everyone loses. Delivery times have been streamlined to the point where nothing short of a technological revolution can get packages delivered any faster without incurring massive costs. Retailers are now gaining no sales by offering fast as possible shipping because everyone else does too, but they have to absorb the costs, financial and otherwise, of “next day delivery” on everything. There is no path forward to increase sales with better or equivalent but cheaper shipping. The only option now is to continue absorbing those costs or see how much sales drop when they offer only more reasonable delivery times.
Among the perks of being a “heavy hitter” are deduct from invoice credits against product returns offered by some manufacturers. Assuming the merchant is bearing the cost of returns is often incorrect.
This is one of the reasons that many retailers will never re-shelve returned product, and will toss them in a bin for sale to a liquidator.
These soft money credits are legal, and do not violate anti-trust law requirements to sell the same quantities for the same price to all customers.
Even if I get warranty credits or other reimbursements from the manufacturer, that only covers the cost of the item itself. It doesn’t cover Amazon’s “free” return shipping, non-reimbursed Amazon fees, etc.
Mostly, this isn’t the reason. What does it matter to my bottom line if I put the item back on the shelf and sell it again, vs getting a credit (even for the full purchase cost of the item) and then having to purchase it from the manufacturer again? Sure, it could help me hit a minimum order qty, but at the cost of reduced inventory now, and I’ll have to deal with liquidating the item.
The more significant issue is that many returns are damaged, opened, swapped for old parts, etc. The only way to ensure that what I am reselling is to open the box and look inside. Depending on how an item is packaged, a visual inspection of the packaging may not be conclusive proof the item was not opened and resealed, and even if it wasn’t opened the item inside may still have been damaged in repeated transit. Of course, once I open the package to check, then I know it was opened and can’t be resold as new.
Even if none of this were true, not all manufacturers give these sorts of credits, and the ones that do often give less than the full invoice cost of the item. For most of the manufacturer’s I deal with, the only way to get reimbursed for the full value of an item is to submit it for a warranty appraisal, and trying to do that with the full volume of my Amazon returns would be a fantastic way to burn that relationship to the ground.
Inspecting, repacking and reshelving returns costs money for labor.
There are better deals available to high volume sellers than you are being offered. Some of those deals provide the credit on X% of your purchase before you have sold any of the items.
I got all sorts of deals that I did not know existed, before I was offered them when I was selling computer equipment. And it was not because my suppliers loved me. Others were getting them as well, and do not talk about them.
When I was on the supplier side, we had lots of incentives we gave our largest customers.
Other industries have their own variations. Many of the markdowns on women’s clothing which are ubiquitous in department stores are funded by the manufacturers.
Most of those weekly sales in supermarkets are manufacturer funded.
In your broader applications, it doesn’t even have to be “free”.
It just has to be backed (even just implicitly) by an entity with “bottomless pockets”.
Pre 2008 Freddie Mac and Fannie Mae (implicitly backed by US government) “anyone can have a home loan, everyone should own a home”. Post 2008 US government explicitly takes them over and “eats the losses”.
1972 Sallie Mae for government backed student loans, 1992 US backed loans directly to students (“everyone should go to college”)… “unlimited” supply of money = sky rocketing tuition, fancier room and board, degrees in whatever, we have the best football team, basketball team, etc… coincidence?
Everyone should have health insurance…….
The consumption is made easy and those who supply can create new and more expensive products to sell with no fear of not being paid.
It is not demand driving the cost. Guaranteed payment drives marketing to sell to the masses.
