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Postage: why do companies charge so much??

Aiki_Aviator

Well Known Member
Hi All,

Maybe people could give me some explaination on why particular businesses feel it necessary to rip off customers on postage costs when it is clear that the costs are significantly less.

My scenario relates to a potential wire purchase from a well known web based company for us geeks of the sky that tried to charge $250 for postage for a $450 order. When asked if they could check and confirm the actual postage costs have effectively lead me on a wild goose chase with comments about working on the problem.

The problem began on 25 November 2011. I have since sent 10 emails requesting detials and made 3 international phone calls. The last phone call was passed through to Jeff, who did not even talk to me, just put me to voice mail. I have been nothing but professional I can assure you (emails back me up), however, the customer service is basically terrible.

I personally want to warn people about these companies as the customer service before you purchase is bad, however, I shudder to think what post sale would be like.

For some information, the postage for the same article, on the expensive side from USPS was $140 (i.e. rapid delivery). So I can only think that because it is computer calculated they only care about themselves.

My personal opinion is that this sort of greed is a major cause of the worlds current economic crisis and if we cared more about each other and less about the profits, the end results would be better.

This may seem like sour grapes, however I am passionate about honest value for money supply and service and make it my mission to highlight were extremely bad examples of this exist. I just hope this email helps other from making a bad choice of supplier.

Thanks to all the other quality suppliers and to all have happy holidays. :D
 
Get a UPS or Fedex account, and ask them to ship on your account number. Then you can only pay actual, direct to the shipper... Goes over a lot better if you present it as "just the way I do business" not "I think you are ripping me off".

Granted packaging/crating may factor in, but I don't mind paying that from a company that is honest about it.

Of course, be prepared...occasionally, you might end up paying more. :)
 
shipping

I live in Canada and to ship anything up here even from the Northern US the prices are through the roof. Anymore unless I have absolutely no other option I won?t order. It is cheaper to ship to Alaska from the southern states and they have to fly over or pass through us. I know customs and brokerage are eating up part of it but that has always been the case.

And UP$ are the worst.

Tim
 
This will be tough to answer without going into the political world...

Just leave it that there are extra requirements on any shipments which have been deemed hazardous by certain organizations which wield the force of law. The little tubes of inspection lacquer are considered "hazardous". I had an overnight quote of several hundred dollars to get two tubes sent. I went with ground for 6 bucks.
 
international shipping

I live in Canada and to ship anything up here even from the Northern US the prices are through the roof. Anymore unless I have absolutely no other option I won?t order. It is cheaper to ship to Alaska from the southern states and they have to fly over or pass through us. I know customs and brokerage are eating up part of it but that has always been the case.

And UP$ are the worst.

Tim


Tim, feel your pain....not to hijack this, and there are other threads on shipping of course, but in addition to the comments here, I often have to try 3 or more scenarios with ACS to get the lowest shipping. One can never assume they know or care much that the real cost to get a $5 part to your door is more like $15. Usually, if the seller will ship USPS ( postal) then it arrives at my local P.O. with NO brokerage and only rarely is there tax payable. ( don't know why, maybe under $50 or something they don't collect? hard to believe!) Alot of guys do the border pickup thing also, ( no brokerage, and often no tax) but not sure where you are in Alberta.
I guess we're all in a hurry for our stuff, but the vendors need to be accountable, and QUOTE shipping costs. ...it's not that hard!
I admit to wondering how some online-only retailers can offer such low prices; now it becomes more evident.
 
as a small business-

I had the same issues of not only higher costs for incoming stock, but the outgoing shipping costs to customers was getting out of hand. Nothing against UPS, but I found on the same size and weight package, that they were 30% higher than USPS, and was a day later. So, even though I have a commercial UPS account, saving me and my customers $$ outweighted any loyality towards UPS.
As for shipping to Austraila, I dont know----but to the UK and South Africa was pretty steep.
Gee-----maybe some of us should start branch companies there??
Tom
 
Only a guess here, I suspect it is a way to make extra $$$ as part of their business.

We see this often on e-bay where the actual price is unseasonably low but the shipping cost is high enough to offset the low offered price and then some. Some folks won?t pay attention to that fact and only to find out when they have committed to buy. It is like when you go to a restaurant and they charge $4-5 for a soda or in a hotel room where they charge $5 for a bottle of water.

I have learned to check the shipping cost and not buy if it is a rip off.
 
Without the details of what was being shipped and the amount of handling by the company shipping the product it would be impossible for anyone to rightfully agree or disagree with you. For instance, a few years ago I shipped an ECI engine that I'd assembled and then shipped via Pardain. Frankly had I charged for preping it for shipping I would have charged quite a bit more, make that a h*ll of a lot more than I did. Actually I lost money on the deal but I've learned that that's what people expect.


P.S. Shipping by Pardain was awesome.
 
A great pity this has been moved to the Test area as it will disappear in a short time.
This is an important issue for non US people.
There is a large market in the non US area for vendors, especially those that treat non US buyers fairly.
 
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Also the problem here in South Africa

Imagine getting stuff from Vans to South Africa! Recently on one of my orders FedEx costs almost overtook the goods cost. This was for a set of RV10 main wheel spats.

With my little business (www.rvbits.com) shipping is a big percentage of the cost as most of my parcels goes international. At this stage I am only using Insured Air Mail and I am charging a few percent less than what I actually pay.
 
As Jan can attest, we try and ship the most economical way possible. Instead of using UPS or FedEx regardless of the cost. There is often a tradeoff in trackability, time, or insurance, but as long as the customer understands the risk you can save a lot.

We have an algorithm that allows us to charge based on the actual charge and still cover boxing, labels, weekly pickup charges...

Companies that offer free freight build it in to the cost of the products. Companies that offer low ball prices make their profit on freight. Flat rate shipping gouges one customer and donates to another. Just different business models. You can't expect to get something for nothing, take out the profit and the doors will close.

------------
 
They removed the USPS option ...

Hello,

As a non US builder, I live in europe, it is very expensive to order parts from the USA.

A half year ago, one of the very big experimental builder, parts supplyer, removed the shipping option USPS.

This means, I have to pay for a few screws or rivets, just stuff that I can not get from Vans, up to 100.-$ for shipping, instead around 30.-$. If you have bigger stuff, then quickly you pay up to 250.-$!
Even with the lowest rate of DHL, Fedex or UPS this is the case. Ok I get the parts by the overnext day, but I could wait a week or too, but this you can not select.

There is a rumor, that the big stores gets a better deal (or direct money) from the shipping companies, if they do not offer a shipping option via USPS?

I know, the USPS has its limitation, you can not track it, and the max. value 250$ or so. It will take a week or two until it arrive it europe, but for all the small stuff, this is ok.

So, now I let ship all to Vans via ground services and then they put everything into a big box, so I have only once to pay a big amount. Vans still offer to ship via USPS.

Only once they lost a package for a month, they unloaded it in Paris (France) instead Zurich (Switzerland), let them laying around for a month, put it into the plane back to the US again. There they got the mistake and throw them into the correct plane and it arrived at my place ... late but ok. This was a 1 out of 20 shippings that endet like this.

How this will end up? If a small box cost so much to ship around? The value of shipping and the tax calculations are ofthen much more than the value itself:mad::mad::mad:

Dominik
 
I'm glad that several other of the RV parts vendors chimed in here. This is a huge issue for any vendor. IMHO, this thread should stay a PERMANENT part of the archives. The customers need to hear this side of the story.

I wish that everyone would understand that there is no free lunch. As others have said, beware the "free shipping" or unrealistically low prices. You WILL pay somehow. I much prefer open, honest prices and shipping charges. (Yes, we do offer "free shipping" on a few general public type items... and it's a pain in the backside.)

After 6 years of vending to the RVers, we've tried every shipping combination we could think of and have come up with the following opinions:

1) FedEx is not optimal for us. They haven't delivered to us reliably, so why should I expect them to do any better with my customers. And pricey too. To be fair, the local drivers may be the issue. They seem to be much too rushed to take time to pickup or deliver correctly.

2) UPS does a fair job domestically, but nickels and dimes us to death with pick up fees. And they are crooks, absolute thieves, to our foreign customers.

3) The USPS may be on the verge of bankruptcy, but they still give the best bang for the buck. We do nearly all of our shipping with them. They are hands down the least expensive option for foreign shipments.

4) DHL charged me $200 shipping on a $50 item. Never again. They're off the charts.

We have always tried to charge only the true cost of shipping. FWIW, it is much easier to do this by using USPS since they offer free boxes and free pickup.

We even refund any shipping charges in excess of the real postage ( + or - a buck or so). If that makes me a bad businessman, oh well. I'd rather be able to sleep peacefully at night anyway! I lose a few bucks here and there doing this, but it's my preferred SOP.

In summary: Our 2 largest costs every year are shipping and credit card fees. Materials and other inventory costs are so far down the list that it's tough to formulate prices for some items! That's something to consider if you're about to open your own RV based trinket store.

*****************************

Part 2:

Now, if you want to get a real conversation started, let's discuss how every vendor on this forum gets completely $crewed by the credit card companies who take about 3% of every sale just so they can market the "cash back" ponzi scheme to the consumers. There ought to be a law....

3% doesn't sound like much until you realize that profit on any given item might only be 10%. Do the math, 10% - 3% = 7%. The credit card companies eat 1/3 of your profit. All in all, I'd rather own a credit card company! They are the real thieves. 'nuf said.
 
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I'm glad that several other of the RV parts vendors chimed in here. This is a huge issue for any vendor. IMHO, this thread should stay a PERMANENT part of the archives. The customers need to hear this side of the story.

O.K., I get the message.

It was moved to "test" because I felt it didnt belong in "Reviews". and I had no idea it would generate so much interest-----figured it would die a natural death pretty fast.

Moved to general discussion.
 
Thanks Mike.

I felt it should be kept because if most vendors are like us, then the number 1 complaint they hear is about shipping costs.... something that we are nearly powerless to control.
 
Postage

Vince shipped me a couple of things I ordered (one had to be made) and it made it to my house much faster than I anticipated using USPS. They may be bloated, cumbersome, and a drain on taxpayer resources, but they came through and did what they claim in their commercials...they delivered.
 
Mike, thanks for moving this back out of Test Section.

As to shipping method overseas, in my experience, USPS is far and away the best - very reliable and fast.

John
 
Great summary from the shipper's side of things Vince - thanks!

I personally have decided that I am not going to choose USPS anymore, unless I know the package will fit in my mailbox (little $1.70 envelope shipping from ACS - a GREAT deal for hardware!). Our local (Friendswood, TX)post office will no longer leave a package at the door - I have even sen the mail truck stop and put mail in my box, then drive away - I later went out and found a "pink slip" in the box - they didn't even knock on the door to see if I was there. That means a drive to the post office, and a long wait in line to retrieve my package.

Nope, not gonna' put up with it! There are other shippers to use....

Paul
 
I've had such bad service from Fed-Ex that I often will not order from a company that insists on using them. USPS is excellent here, and routinely leaves boxes on my front steps.

Dave
 
I later went out and found a "pink slip" in the box - they didn't even knock on the door to see if I was there

I hate this too, but there's often more to it than just the delivery person (USPS, UPS, or Fedex... doesn't matter) not wanting to leave a package. However, not knocking on the door is inexcusable. I'd want to talk to the postmaster about that.

What Paul's comment reminded me of is another thing that many customers might not know. Leaving a package, any package, at the door without getting a signature exposes the vendor to a false chargeback.

What this means is that if no signature is obtained, an unscrupulous customer can falsely claim that their shipment never arrived. Then they file a claim with their credit card company. The credit card company asks the vendor to prove that a delivery was made. Without a signature confirmation to prove the delivery, the credit card company then refunds the customer's money and charges the vendor. This is a chargeback and it is just another way that the credit card companies $crew the businessman.

Fortunately, we've never had one happen to us (yet). The RV crowd is extremely trustworthy. We typically ship with no signature required, hoping that the RVers will always be trustworthy. Of course, a thief could steal the shipment from their porch and that would ruin everyone's day.

If we're shipping items that are expensive to someone that I don't recognize as a pilot, we use signature confirmation. Not everyone out there is as nice as 99.99% of the pilots out there.

These is just another thing that I never knew before I (foolishly?) decided to sell stuff online. No wonder my hair is turning gray.

One more thought: I'd never post this comment on most forums because it might give someone an idea they hadn't thought of before... stealing the delivery! Like I said above, the RV crowd is a step above the rest and I hope it stays that way.
 
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No Signature Required

A "Signature Required" shipment to me from UPS means a very long drive (to Decatur, AL, if it matters) to retrieve my stuff. USPS and FedEx are relatively close. I can understand Vince's comments about false chargebacks, though. It helps to have a dialog with your supplier about shipping. Though it's not always possible, it generally helps take care of misunderstandings before they turn into really big deals.
 
I hate this too, but there's often more to it than just the delivery person (USPS, UPS, or Fedex... doesn't matter) not wanting to leave a package. However, not knocking on the door is inexcusable. I'd want to talk to the postmaster about that.

One reason (other than having a stable address) that I've had a UPS Store box for more than a decade now.

About $15 bucks a month and I get all my packages signed for, no need to be at the house for signature required, never miss a package, all accounted for, kept dry out of the weather, held for as long as I need...and if for some reason it's needed, they will reship to another address for me. I get notices of delivered packages with their tracking number via email the moment they arrive, and I just pick them up on the drive home from work when I pass by. Packages seem to get treated better too, on a "bulk" route (I'm guessing) vs. all the home drops...and many shipping prices are cheaper to a business address as well.

Plus, you don't have to give out where you actually live to all the databases and such...

It's wonderful. :)
 
I agree with

Vince-and Paul. Being a small business, both inbound and outbound shipping cost are things we have to consider. I've shipped with UPS, and found that their rates were higher, and took longer, than a similar sized package from USPS. But--the UPS depot here locally is VERY convient--up until 7:00 PM--enought time to build stuff and have it go same day. BUT---the extra several dollars that our customers pay ( I dont mark up the shipping rates) is sometimes crazy. I use USPS also because they supply the boxes. Go to WalMart, or Staples and start figuring the costs of boxes, and it can get out of hand in a big hurry.
Paul brings up a point that i wasnt aware of---the fact that USPS may not leave a package, just a pink slip. That can get pretty inconvienent if your post office isnt near your residence, or business. Mine is across town, and I take my packages there during lunch. I have had UPS not leave packages, but I attributed that to a new route driver.
I don know the answer to the shipping questions. For the builders overseas, man, you are really hurting. I thought Spruce had warehouses in most major countries?
IF we all had our way, we could all have a division in UK, greater Europe, Asia, Austraila, Brazil, and really help our customer. Not only with shipping lead times, but reduced costs as well. Someone smarter than me would have figure it out though!
Tom
 
Now, if you want to get a real conversation started, let's discuss how every vendor on this forum gets completely $crewed by the credit card companies who take about 3% of every sale just so they can market the "cash back" ponzi scheme to the consumers. There ought to be a law....

3% doesn't sound like much until you realize that profit on any given item might only be 10%. Do the math, 10% - 3% = 7%. The credit card companies eat 1/3 of your profit. All in all, I'd rather own a credit card company! They are the real thieves. 'nuf said.

Good point Vince, add up what we have paid in those fees over the last 20 years and it far more than I have been able to put in a 401k. Infuriating.

-
 
Good point Vince, add up what we have paid in those fees over the last 20 years and it far more than I have been able to put in a 401k. Infuriating.

-

Side note...we can help!

When I had a merchant account it was 2.25% + $0.30 per transaction. But, Rewards or Corporate cards added an additional 1.50% on top!

So, don't use a rewards card with a merchant you like. Those rewards (plus some...) are coming out of the vendor's pocket not the credit card companies.

Or, don't use a credit card for big ticket items. Granted, I'd always use one when dealing with someone who wasn't a "platinum" vendor, so I have the chargeback option for dealing with a deadbeat or scammer.
 
The cost adds up

This thread started with the cost to overseas customers of shipping. I thought I might add to it with my experience. I think it reflects what others are saying.

1/ UPS- It would cost less to fly to the U.S. and get it myself. (Perhaps a little exaggerated but boy they are expensive!

2/ FEDEX - Quick and reliable but also very costly (but less than UPS)

3/ USPS- Very reasonable, compared to the other two. So far I have never had anything go astray, (touch wood) and no damage, even when I had to ship a unit back to Dynon. (touch more wood)

I have also found that FEDEX and UPS charge GST (Australia?s goods and services tax) on everything. Australia Post doesn?t start charging the tax until you get something with a value over $1000.

I have regularly had postage charges that were higher than the cost of the goods inside the package. That is the price you pay if you are building outside the U.S.A. Builders here don't like it but that, as they say, is the way the cookie crumbles! If possible you try to find out if one of your builder mates is in need of something from the same supplier, and you order together to try and minimise the transport costs by sharing them.

However I have to say that my dealings with the various companies in the U.S. have been excellent. I am struggling to think of one supplier that has been problematic. This forum has helped a lot, by reading the comments and experiences of other builders it has been possible to avoid potential problems.

Years of deliveries has had one interesting side effect. The "Postie" and I are on a first name basis. When I am not home he brings them to me at work! (My work place is only 5 min away)

Cheers

Jim
 
For a data point not from the aviation world, I ordered a Drift Stealth HD camera from BHPhoto in New York a month ago. They had an option for "prepaid brokerage shipping" through Purolator. They charged the HST, and a USPS-sized amount for shipping, up front. The package arrived on my doorstep 5 business day later. No surprise fees, no high shipping costs.

And in the end, after paying shipping and taxes, the Drift was still cheaper than the before tax prices locally. The Internet will be the end of storefronts, I tell you.
 
For a data point not from the aviation world, I ordered a Drift Stealth HD camera from BHPhoto in New York a month ago. They had an option for "prepaid brokerage shipping" through Purolator. They charged the HST, and a USPS-sized amount for shipping, up front. The package arrived on my doorstep 5 business day later. No surprise fees, no high shipping costs.

And in the end, after paying shipping and taxes, the Drift was still cheaper than the before tax prices locally. The Internet will be the end of storefronts, I tell you.

amazon has already ended so many physical stores that didn't adapt..
 
...might give someone an idea they hadn't thought of before... stealing the delivery!

No worries with that... the local news mentioned last week that people were following the UPS truck to discover those packages left on the doorstep, and then they helped themselves. One thing about thieves...they are resourceful.

-Jim
 
For the builders overseas, man, you are really hurting. I thought Spruce had warehouses in most major countries?

Not really warehouses but distributors. I use them, but they aren't really cheaper. I'll take my Christmas present as example, a Locoloc swaging tool. ACS wants $234 for it. Lets assume $40 for shipping (they don't list overseas shipping costs), 19% customs/tax, and $12 handling fees charged by the UK Royal Mail for dealing with the customs office. Now we are at $336. The local distributor in the UK wants $345 plus domestic shipping, ACS Germany charges $341 plus shipping.
 
Not really warehouses but distributors. I use them, but they aren't really cheaper. I'll take my Christmas present as example, a Locoloc swaging tool. ACS wants $234 for it. Lets assume $40 for shipping (they don't list overseas shipping costs), 19% customs/tax, and $12 handling fees charged by the UK Royal Mail for dealing with the customs office. Now we are at $336. The local distributor in the UK wants $345 plus domestic shipping, ACS Germany charges $341 plus shipping.

Hendrik,

Have you tried Airworld UK run by Pete Smoothy. He is an ACS distributer and he usually tries to optimise the shipping costs from the States and spread it over a number of orders from different customers. I have been ordering ACS and other stuff through for years now and I am very happy with his service. Here is his website:

http://shop.airworlduk.com/about-us-1-w.asp
 
Tony,

I've tried Pete's website, but I can't find all ACS items in his webshop. I guess I could write or call them, but it is much more convenient to be able to order or at least search online and so I end up with LAS or ACS Germany. In fact, the swaging tool I mentioned is such an item. Searching for its name, ACS part number, "swaging" or the manufacturer doesn't yield any results. Clicking on the "Tools" category in the webshop brings me to a page with exactly 25 tools, no "next" button, no sub-categories, no way to proceed. Even if I try something trivial and type "AN426AD-3-3.5" into the search field, I get "No Results found". Searching for "rivet" at least shows me three results, none of which are rivets. Maybe I'm doing something wrong, but I think that website is unusable.
 
ACS

The direct price from ACS in the States (including shipping) is, in my experience, always cheaper than the local supplier. It's usually quicker too!

cheers

Jim
 
Tony,

I've tried Pete's website, but I can't find all ACS items in his webshop. I guess I could write or call them, but it is much more convenient to be able to order or at least search online and so I end up with LAS or ACS Germany. In fact, the swaging tool I mentioned is such an item. Searching for its name, ACS part number, "swaging" or the manufacturer doesn't yield any results. Clicking on the "Tools" category in the webshop brings me to a page with exactly 25 tools, no "next" button, no sub-categories, no way to proceed. Even if I try something trivial and type "AN426AD-3-3.5" into the search field, I get "No Results found". Searching for "rivet" at least shows me three results, none of which are rivets. Maybe I'm doing something wrong, but I think that website is unusable.

Give Pete a call or send him an email with the ACS part numbers. Delivery is a little longer than a direct order to ACS. Pete is also one very nice guy and is a font of aviation knowledge. I would put him in the same class as Stein from Steinair or Mahlon from Mattituck.

Jim said:
The direct price from ACS in the States (including shipping) is, in my experience, always cheaper than the local supplier. It's usually quicker too!

cheers

Jim

Not in my experience Jim.

Just my 2 rappens worth.
 
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Excellent discussion

Hi All,

I am glad\sad to hear that this issue generates the same passionate response that it did in me. I personally don't mind paying the price of something if it is reasonable, however, I do not like getting "taken to the cleaners" just because someone wants to operate thier business in a sneaky way. Personally they should not be in business and customers should walk.

The pricing for shipping is listed on the various postage web sites and therefore the customers can fairly quickly find out what it should cost. And if not exact, should have a fair idea. How businesses can then charge 200-500% more than that is unexplainable to me.

Unfortunately living in Oz puts me at the mercy of the postal services.

Sorry for the winge :( , but thanks for the support. :)
 
Australia compared to Europe

Not in my experience Jim.[/QUOTE]

I guess the difference Anthony would be our varied location.

In many / most items I have needed I have found that ordering from the states was cheaper. Specialist tools really stand out. e.g. I priced a pipe flaring tool $A150 here, but with shipping and $ conversion exactly the same tool was $A70 from ACS. (This was some time ago and the good exchange rate helped) I have also found the same has applied to a lot of the hardware as well.

I do live in Adelaide, which does not have the same population density as the east coast of OZ so it hasn't got the aeronautic retailers. I have to order things from Melbourne or Sydney which means I have postal costs tacked on to the Australian price too.

I guess in the end we all have to accept that we are building an aeroplane and we should be prepared for the associated costs. Mind you that does not mean we should allow ourselves to be ripped off.

I think this discussion is excellent and useful for the education of the prospective and new builders around the world. Hopefully it will alert them to some of the hidden costs and pitfalls out there so they don't get caught.

Cheers

Jim
 
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