3 ms·

I don't buy this argument. This might explain free shipping to France (the country), but not free delivery to the OP (the physical address). There's not way you

by tomp 11y ago

I don't buy this argument. This might explain free shipping to France (the country), but not free delivery to the OP (the physical address). There's not way you can make even a short 1km delivery profitable for 3 cents (except if you're delivering for a whole building at once, which seems very unlikely).

guelo 11y ago
Whether the mailman delivers the 3 cent button or not he still gets up in the morning, does his delivery rounds and collects the same paycheck.
- scholia 11y ago
  I'm reminded of the famous "discovery" that it costs $10 (or whatever) for a secretary to send a letter. Actually, the secretary costs $10 whether she sends a letter or not ;-)
hobs 11y ago
The point is that transaction is not profitable but overall the system is. They get soaked on the 3c button, but as most people dont do this, they can absorb that cost and subsidize it with the rest of their profits.
- monochromatic 11y ago
  Fine, but why would they? They're running the system anyway, sure... but why take a marginal loss on that 3 cent transaction?
  - hobs 11y ago
    For the same reason some people might advocate basic income, because overall administering the cost is more expensive than just paying it, especially when it comes to customer satisfaction and buying choices.
  - scholia 11y ago
    That's the wrong way to think about it! You need to think about the system not the individual transactions ;-) Do you pay more for web pages from China than you do from the USA because they travel further? Why not? The problem is that the whole accounting and tracking overhead would be far more than it's worth. The only real issue is whether the total income from carrying traffic is bigger than the total cost of running the network. Yes, there are anomalies with China because Chinese charges reflect Chinese costs (and government subsidies, if any). The fact that USPS has higher costs is not something the Chinese have to worry about -- or not until the US negotiates higher fees via the Universal Postal Union. Otherwise, the USPS charges a lot for overseas mail, so it makes extra profits when that mail is delivered in low-cost countries such as China and India. On the whole, it probably breaks even or comes out ahead....
acveilleux 11y ago
International postal agreements cap the cost to China Post for the final delivery of mail artificially low and USPS has to absorb the actual final delivery cost. Because of that artificial cap and China Post's cost of mailing, the shipper bears a very low cost. Probably still losing money mind you but that loss is in effect heavily subsidized. Airmail costs for a button would be 6 RMB or $0.91 per china post's web site for a letter in the 3rd group (US, Europe, Canada, OZ, NZ). Surface mail cost for the same letter would be 4 RMB or $0.61. That's cost if you walk up to the post office. I don't really have the patience to try and sort out the discounts that might apply to volume shippers. I assume they have the whole line of discounts for electronic stamps, large volume shippers and pre-sorted mail, amongst others.

by tomp 11y ago

guelo 11y ago

Whether the mailman delivers the 3 cent button or not he still gets up in the morning, does his delivery rounds and collects the same paycheck.

scholia 11y ago
I'm reminded of the famous "discovery" that it costs $10 (or whatever) for a secretary to send a letter. Actually, the secretary costs $10 whether she sends a letter or not ;-)

hobs 11y ago

The point is that transaction is not profitable but overall the system is. They get soaked on the 3c button, but as most people dont do this, they can absorb that cost and subsidize it with the rest of their profits.

monochromatic 11y ago
Fine, but why would they? They're running the system anyway, sure... but why take a marginal loss on that 3 cent transaction?
- hobs 11y ago
  For the same reason some people might advocate basic income, because overall administering the cost is more expensive than just paying it, especially when it comes to customer satisfaction and buying choices.
- scholia 11y ago
  That's the wrong way to think about it! You need to think about the system not the individual transactions ;-) Do you pay more for web pages from China than you do from the USA because they travel further? Why not? The problem is that the whole accounting and tracking overhead would be far more than it's worth. The only real issue is whether the total income from carrying traffic is bigger than the total cost of running the network. Yes, there are anomalies with China because Chinese charges reflect Chinese costs (and government subsidies, if any). The fact that USPS has higher costs is not something the Chinese have to worry about -- or not until the US negotiates higher fees via the Universal Postal Union. Otherwise, the USPS charges a lot for overseas mail, so it makes extra profits when that mail is delivered in low-cost countries such as China and India. On the whole, it probably breaks even or comes out ahead....

acveilleux 11y ago

International postal agreements cap the cost to China Post for the final delivery of mail artificially low and USPS has to absorb the actual final delivery cost. Because of that artificial cap and China Post's cost of mailing, the shipper bears a very low cost. Probably still losing money mind you but that loss is in effect heavily subsidized. Airmail costs for a button would be 6 RMB or $0.91 per china post's web site for a letter in the 3rd group (US, Europe, Canada, OZ, NZ). Surface mail cost for the same letter would be 4 RMB or $0.61. That's cost if you walk up to the post office. I don't really have the patience to try and sort out the discounts that might apply to volume shippers. I assume they have the whole line of discounts for electronic stamps, large volume shippers and pre-sorted mail, amongst others.