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Fedex will continue to charge as much as they can to boost their profits. This move will increase their profits, making $1.50 on each of 100 million deliveries
by iso1631 4y ago
Fedex will continue to charge as much as they can to boost their profits. This move will increase their profits, making $1.50 on each of 100 million deliveries instead of $1, boosting profits from $100m to $150m
However if they were to undercut UPS and others they might be able snap up UPS business, dropping the profit to $1, but on 200 million deliveries, and thus they'll make $200m instead, you the customer will have a cheaper delivery, and everybody wins
- nly 4y agoUntil it becomes a race to the bottom and UPS drop their prices as well. Then both companies suffer
- JumpCrisscross 4y ago> becomes a race to the bottom and UPS drop their prices This is competition.
- iso1631 4y agoAnd all consumers win. This is the beauty of capitalism, it's how it's supposed to work. It fails when you get high barriers to entry and company colluding
- yuliyp 4y agoThis is how the "passing the savings on to their customers" happens.
- dx034 4y agoThey're not really competing on price but on quality. They make the most money with super urgent deliveries. If they offer later pick up times or earlier guaranteed deliveries, customers will be happy to pay more. And their IT system is crucial for that.