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Factories ship in bulk. Returns ship, typically, as singletons. The cost to put one extra box into a shipping container containing thousands of identical units
by bunnie 5y ago
Factories ship in bulk. Returns ship, typically, as singletons.
The cost to put one extra box into a shipping container containing thousands of identical units, the pick up of which is scheduled months in advance (so utilization of the overall cargo ship is near ideal), is negligible. Similarly, the cost to break down the incoming shipment, warehouse it and check it in is small, because the factory ensures the correct bar codes are on the outside of the boxes. The worker checking them in is completely stateless - scan a barcode, stick the box in the rack with a light, move on, thus the worker is not specialized and cheaper. From there individual orders are scheduled and collated overnight into trucks that carry hundreds of boxes to individual cities, which are then broken down into the last mile courier.
Now, to arrange the reverse logistics within a bounded amount of time (less than two weeks, say), you are likely to have to send an empty truck to the end address; if you're lucky the route has other packages, but you can't count on it. The reverse logistics sender may not be there when the pick up arrives, so you either have to arrange multiple pickup or risk leaving the item unguarded. Then the box arrives at the local warehouse, with no specific routing information to where the rest of the inventory is, so you have a specialist inspect the box and also make sure there isn't fraud going on - eg people ordering phones and returning similarly weighted bricks. Then if you want that box to make it all the way back to the overseas factory where it was produced, you're probably booking it on an airplane, and not a cargo ship.
20x is actually on the low end. A wall wart power supply might run an incremental cost of about $1 to ship from Shenzhen to your door. Sending that same thing back to the factory by FedEx - a process that takes about a week with customs and pick up delays - probably north of $50 for the 'rack rate' retail shipper.
- rightbyte 5y agoSure, but the bulkshipping is only from factory->Amazon unless it is a really common goods. A consumer->Amazon->factory should be about twice the singleton shipping for a domestic source and destination compared to the reverse shipping path. Amazon could in theory ship returns to sellers like they would be consumers ...
- hef19898 5y agoThat's the part where reality hits theory, as usual reality wins. Because before Amazon can ship in bulk, they have to repack all the single returns. They have to store them until they get enough volumes to justify bulk shipments, and usually those shipments aren't article pure. All that costs, a lot more it does for a factory producing this stuff in the first place. Logistics-wise returns and consumer last-mile deliveries are among the worst things to handle.
- bradknowles 5y agoI believe that this is why Amazon contracted with Kohl’s and certain other stores to act as drop off points for returns, so that the stores could do the repackaging and then Amazon could just send a truck to pick up the bulk package. No special inside information or anything here, just my personal opinion.