Posted on 07/13/2017 6:44:08 PM PDT by ForYourChildren
A Citigroup analysis finds each box gets a $1.46 subsidy. It’s like a gift card from Uncle Sam.
In my neighborhood, I frequently walk past “shop local” signs in the windows of struggling stores. Yet I don’t feel guilty ordering most of my family’s household goods on Amazon. In a world of fair competition, there will be winners and losers.
But when a mail truck pulls up filled to the top with Amazon boxes for my neighbors and me, I do feel some guilt. Like many close observers of the shipping business, I know a secret about the federal government’s relationship with Amazon: The U.S. Postal Service delivers the company’s boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon.
{..snip..}
(Excerpt) Read more at wsj.com ...
As the owners of a 12 unit apartment, we just spent $1500 ($1250 mailbox plus $250 installation) to put in a cluster mailbox. The tenants all prefer it, since the individual boxes are locked which discourages theft. It replaced individual rural type mailboxes on a common base.
The cluster boxes look better, take less room and are more secure. What is not to like?
Back in the day we used to call that marginal cost, but you are exactly right.
The Post Office is making money on the Amazon deliveries. And they are getting a much better capital utilization rate by using existing facilities, both buildings and vehicles.
I was shocked to see a Post Office truck pull up to my front door and deliver a package about a year ago. Now it is common. And there is another benefit. The drivers are becoming pleasant to deal with. A few years ago, the surly factor was high for postal workers. Now with email and electronic payments threatening first class mail, and the specter of unemployment on the horizon, postal workers see package delivery as a job preserver. And they have started to understand they need to compete with UPS and FedEx.
It is absolutely amazing the attitude adjustment having to compete brings.
Wow...Is it rural area?
My post office has lobby hours 7 days a week...even on Sunday (which I know is unusual).
Could the USPS be delivering for marginal cost and not really losing money on the deal? With fewer letters bring mailed they are in survival mode.
Could the USPS be delivering for marginal cost and not really losing money on the deal? With fewer letters bring mailed they are in survival mode.
Say what! That don't make sense.
If I had shops that sold merchandise with in driving distance for my age bracket, I’d shop them. What I have is Family Dollar, fast food, 2 grocery stores, 1 good, 1 smells of bad food, and a drug store. Couple of gas stations. We live semi rural, not even a Wal-Mart in our little berg.
I’d have to drive into CRIME infested Memphis, whose stores don’t allow my CCW handgun. I’m not driving 2 hours round trip to look at Hooker clothes, and shoes NOT in my size.
So I shop Amazon. Saves fuel, hassle, risk, and I don’t have to drive a 2 hr round trip.
Stay logged in. Pick an item. Look at the prices of the same item sold by other sellers. You'll see the item price and the shipping price. 90% of the time the total is the same as the Prime price which has "free" shipping. If it truly is free shipping then the Prime total price would be cheaper.
I have to say, most of my Amazon purchases are delivered by the Post Office and they have never missed a delivery in two years. Amazon is probably keeping the USPS afloat without whom would be gouging deeper into taxpayer dollars.
From 2015:
American taxpayers give an $18 billion gift to the post office every year
Businesses give discounts to big accounts - FACT. USPS is a business. Without Amazon’s contracts, our tax bill could very well be over $20 billion! We should thank Amazon. I do by using them for all my online shopping. We have to put politics aside!
Yes, it is rural. We’re lucky though. The PO was slated to be shut down completely two years ago.
We are seeing the same paradigm shift with shopping. Hitting a button on your smartphone to order something is much easier than getting into your car, fighting the mall area traffic, jockeying for a parking space and then waiting 15 minutes in line at Kohl's or whatever other department store to buy something.
Amazon is not the only choice out there. Most retail chains now allow you to shop online. I get my LL Bean clothes delivered to my house now. I haven't been in an LL Bean store in years but I have a closet full of LL Bean clothes.
That’s the punchline to an old joke. :=)
It is required by law that USPS parcel delivery not be priced below cost, but:
In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.
Article also says two thirds of Amazon's domestic deliveries are made by USPS.
“I’m rural and use Amazon a lot, as a Prime member. Everything comes UPS, promptly and to my door.”
*****************
We’re Amazon Prime, too....but we live in a condo w/PO clusterboxes locted down the street....the only time PO delivers to our door is Sundays!
Otherwise humping my deliveries home from the PO “gangbox”
where my stuff is wedged tightly and hard to get out and heavy sometimes to hump home!
I expect same bs for apartment dwellers, etc.
Previously lived in a townhouse in the city and UPS delivered my Amazon prime purchases quickly and to my door—no more!!!!!!!!!!!!!!!!!!
I’m sure this works fine 4 Amazon and most folks, but....
” Look at the prices of the same item sold by other sellers”
oh, i absolutely do that, especially to avoid sales tax on big ticket items, but it’s unusual for other sellers to beat amazon with total cost, including shipping. even if competitive, their “free” shipping is often 5-7 days, not two. And the other sad little trick some sellers use for popular items is to advertise cheaper prices, but not have the item in stock, continuously claiming it will be in stock in “a week”, but it never is.
not to mention, i’ve been ripped off upon occasion (mostly on used books) by such sellers. amazon refunds the money of course but it’s still a pain.
i’ve been prime since 2005 when it was first offered, have purchased tens of thousands of dollars worth of goods from amazon and save thousands on shipping and saved thousands over retail or other sites. not to mention their selection blows local retailers out of the water, and amazon customer service is unparalleled. I’ll actually pay a small amount more to purchase an item from amazon than from some no name website I’ve never heard of before, just for the assurance of amazon’s customer service.
i’ve shopped online now for nearly two decades and rarely miss a trick. i certainly buy from other reputable dealers when they can beat an amazon price, but find it foolish to pay extra pointlessly.
So in a rural area, what do you do, get a PO Box at nearest Post Office—however far and wherever that might be?
The USPS is getting even better about delivering literally a couple pounds of junk mail a day here sometimes.
99% is not mine BTW.
If I can get to the mail first, all the junk goes for destruction on arrival.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.