4 ms·

If the Trump administration had just opened with this, I think we might have saved ourselves a lot of stock market turbulence with tariff pissing contests. U. S

If the Trump administration had just opened with this, I think we might have saved ourselves a lot of stock market turbulence with tariff pissing contests. U. S. sellers start in the hole by the fact that they can't even compete on shipping prices with Chinese companies. It reminds me of the Shell gas station owner I worked for many decades ago who complained that the local drugstore could sell quarts of oil cheaper than Shell sold it to him, a Shell station owner. Now how are you supposed to succeed with a rigged system like that? Let's see how it goes when the price of shipping actually reflects the fact that the $1.50 piece of molded plastic had to take a boat ride half way around the world.

ThomPete 7y ago
He did open with this, it just took time to get it through.
ehnto 7y ago
Tangentially related, but I was surprised at how blatant a lot of supplier price fixing is. Either you sell at the supplier agreed price or they don't supply you. This keeps prices up for the sellers, which presumably is good for the supplier as well. That's in the more open market of independent businesses. In your example, the drugstore may be selling at cost or at a loss to bring people in the door, or he may actually have a cheaper supplier. But for the Shell Station franchisee, he likely has a contract to buy Shell products from a particular distributor, so even if he could find a lower priced distributor he is unable to use it. That's all part of the franchise business model, where the franchiser double dips by taking licence fees and contractually obliges you to use their services as well. Subway charges high margins for their mandatory dishwashing soap supply for one example.
mreome 7y ago
Your drugstore/gas-station anecdote doesn't quite apply here though. The ePacket delivery option comes with size, weight and cost limitations such that it's not useful for shipping retail quantities. It's almost exclusively used for suppliers in China to ship directly to end-customers.
nkurz 7y ago
I can see the theory, but I don't think it's true in practice. First, the USPS withdrawal from the UPU was announced in October 2018, which I think predates most of the tariffs: https://www.lawfareblog.com/withdrawal-universal-postal-union-guide-perplexed https://www.lawfareblog.com/withdrawal-universal-postal-unio... Second, China is already paying for the cost of shipping the item to the US shores. The change affects how much the the USPS charges for the final delivery once it arrives here.

ThomPete 7y ago

He did open with this, it just took time to get it through.

ehnto 7y ago

Tangentially related, but I was surprised at how blatant a lot of supplier price fixing is. Either you sell at the supplier agreed price or they don't supply you. This keeps prices up for the sellers, which presumably is good for the supplier as well. That's in the more open market of independent businesses. In your example, the drugstore may be selling at cost or at a loss to bring people in the door, or he may actually have a cheaper supplier. But for the Shell Station franchisee, he likely has a contract to buy Shell products from a particular distributor, so even if he could find a lower priced distributor he is unable to use it. That's all part of the franchise business model, where the franchiser double dips by taking licence fees and contractually obliges you to use their services as well. Subway charges high margins for their mandatory dishwashing soap supply for one example.

mreome 7y ago

Your drugstore/gas-station anecdote doesn't quite apply here though. The ePacket delivery option comes with size, weight and cost limitations such that it's not useful for shipping retail quantities. It's almost exclusively used for suppliers in China to ship directly to end-customers.

nkurz 7y ago

I can see the theory, but I don't think it's true in practice. First, the USPS withdrawal from the UPU was announced in October 2018, which I think predates most of the tariffs: https://www.lawfareblog.com/withdrawal-universal-postal-union-guide-perplexed https://www.lawfareblog.com/withdrawal-universal-postal-unio... Second, China is already paying for the cost of shipping the item to the US shores. The change affects how much the the USPS charges for the final delivery once it arrives here.