As usual an askJOHN begins with a question - this time in the form of a complaint. And not just one, but two (and I get a few more during the course of the year, so this is the 2024 update.
Anyway, in America, because it's always fair to raise your voice and register a complaint, here goes with how we got here . . . and please keep in the back of your mind, it's 2023 2024 but the FOB Shipping Point values used are an ever moving target (means they're gonna be even higher soon enough).
Q1. Loving the servos, but why are the shipping costs to WI so high? $14 for a tiny box that takes over a week to get to me from Florida? It doesn’t seem right!
A1. Short answer: you're right, $14 for such a tiny box isn't fair. But being 100% right in this also makes you wrong. You're lacking information. In theory $14 'is' a rip off, but turns out practice is different! Let me explain . . .
On real world practice
To begin, we pay $21/hour and spend 1/4 hour packing the average order. Orlando area minimum is $12 and if you believe that's what we should pay maybe you're not our kind of customer (no offense).
So the above, plus the shipping department which has fixed and variable costs to cover (and we don't assign any part of them to walk-in traffic - typically FL residents, snowbirds, and tourists). These are parts of the costs the mail order customer must bear alone.
This ends the TL:DR, let me break it down for you in long form.
Beyond postage/insurance plus the box/packing (an actual expense civilians typically forget but which a business must take into account), shipping also includes . . .
- shipping department square footage/insurance (proportion)
- computers/software/subscriptions (proportion)
- printer/supplies (per customer)
- labor (averages 1/4 hour) at $24/hr
. . . so why should you care about any of this? Simple, because the 'only' reason the shipping department even exists is for mail order customers like you.
So adding up the labor along with the postage and insurance, plus the box and packing is everything, right? Nope, that STILL isn't what shipping actually costs.
Shipping Cost Breakdown - beyond the box and postage
So on top of the price of the shipping box, packing materials, labels, and postage, there is also labor plus the fixed costs for the shipping department itself.
Why should I pay for the shipping department?
Simple, because you're the mail order customer (walk-in customers don't pay a penny of it), so mail order-customers only get the honor. Means you.
How do we determine this cost? Math . . . take the rent and divide by total square footage (for the whole place). Take this number and multiply by how many square feet the shipping department takes up (there's actually a slight adjustment for communal areas like hallways and bathroom but it applies to all departments and comes out in the wash). Now divide this figure by the number of orders (and remember, it's not just rent, because there's also insurance, electricity, plus other utilities like telecommunications, too).
Surprisingly, when you boil it down, because we ship a lot of orders, the $1.35 cost per order isn't horribly high. The 'real' cost drivers are labor and postage.
Background
Important in all this is this; please realize the folks who retrieve their merchandise in person will incur zero of these shipping expenses (logical since they're not using the shipping department). Thus, they don't pay for any part of the shipping department costs (and of course, no charge for postage or labor, either). It's all on you, the mail order customer, only.
Anyway, cutting this short, please believe me when I promise you this; after busting a nut offering the best servo available and doing it for a fair price, we wouldn't turn around and bend you over on the shipping to make up for it.
Why not? It's because the only thing the high shipping costs actually do is piss off people who haven't taken college level business math. Sadly, that's a lot of us. But look, as you're learning, we price things fairly. And not just servos but every part of your interaction with ProModeler.
Anyway, what I'm trying to explain to you is this: the $14 price is not our fault and you're actually not getting screwed. Let me wrap this up with this thought: as an operating philosophy of the business, fulfillment is NOT a profit center!
Details about where the real costs lay
What I am saying is: I'm deeply sorry - but - shipping costs what it costs, and we apportion the expenses to those who actually incur them (the mail order customer). That would be you!
Put another way, it wouldn't be fair to those who drive here to bear even one penny of that part of the operation, agreed? So because the shipping department exists solely to support mail order sales, then squaring the circle, mail order customers must bear 100% of the shipping expense. And note: the bean-counter reviews these figures every quarter and makes adjustments as needed.
Note: Labor is $21/hour but our actual costs are higher (FICA, taxes, insurance, etc.) Also, you should know this if you're wondering, free shipping was invented by marketing and doesn't actually exist.
So, the average order takes 16 minutes to pack and ship - but - we actually round it down for your benefit, so call labor one quarter hour . . . or about $6 (and this is per order). And if we were a typical shitty employer (e.g. paying less than a liveable wage by offering $12/hour), then the labor component of shipping would be about $4 vs. $6, so call dealing with us instead of some scuzzy guys a $2 tax because it amounts to a whole two bucks less on the cost for your order!
Note: the reason we don't fold shipping into our prices (so called Free Shipping offered by some businesses), is because most guys are savvy enough to realize there's no such thing as the tooth fairy (meaning TANSTAAFL), but I once again, digress.
Major point being this, free shipping would just shift shipping costs from someone like you in Wisconsin onto the shoulders of a guy 10 miles away in Altamonte Springs, which wouldn't be right!
Did I hear you say, you don't care? Well, he does and complaining in person is a whole other level compared to dealing with you via email.
Basic math
But truth be known, even if you lived just 10 miles away, by the time you paid tolls (we have lots of toll roads in Florida), and incurred the reasonable mileage expenses for a car (20 miles round trip) as per the IRS published Tax Code, plus accounting for local minimum wage for driving, along with that trip takes about an hour, so by the time all is said and done, call it $12/hr for that (and you're probably worth more than this), then if you put pencil to paper I guarantee you'd 'still' spend more than we charge whilst delivering to your door! How? Magic? It's because you can't beat a man at his own craft and the post office's craft is delivery.
Note: some folks do drive over anyway (hang the added expense and trouble). That's fine, for folks who need something 'right now' we have a 6-locker cabinet outside.
Wrapping it up
I'll close with (and locals will confirm), there's nothing to see if you come in person (other than a 6-door locker). Why not? Couple of reasons:
- it's because we're not a hobby shop!
- and because the machine shops are off limits except to those with a clearance (contracting officer approved reason to be on site - defense business).
So a warehouse visit is a big fat zero in terms of being of interest to modelers, which I mention by way of heads up if you are in these necks of the woods and think maybe we're like a hobby shop and a fun place to visit, because we're not 'and' it's not!
A detailed break down
So as you can see, we aren't screwing you on shipping, we're just not! And finally, this is the breakdown on 'your' numbers for your 12oz small box to WI - from most to least costly line item . . .
- $6.45 = postage
- $3.40 = insurance
- $4.98 = wages ($20/h + SS/Medicare 6.75%, $21.35/hr@14min - call it [($22.61/60)*14]
- $2.23 = computer/printers/apps
- $1.35 = facility (P&P sq foot w/insurance) per package for 2022 (2023 not available)
- $0.85 = box ($0.41/box + $0.29/box shipping + $0.15 peanuts/tape/labels)
- Total is $19.26
. . . so for your small box to WI, we charged you $14 and you didn't like it, but as it turns out, we actually spent $19.26 (or two bucks less, e.g. $17.26 if we were a scuzzy operation paying McWages) meaning we actually went into the hole on your behalf. So question is, who's actually getting ripped off? Ain't you! But don't fret because we don't.
Q2. In reference to this invoice . . .
Thanks for your business, this is your receipt. Hard copy? Print this!
Order #xxxxxx
Email: customer@somebody.com
Order Date: 2/5/2024 4:12:31 PM
Order Status: Approved, Pending Shipping Payment Status: Payment information
received.
Payment Method: PayPalExpress
Shipping Address
Name: Sxxxx Lxxxx
Company: Ixxxxx Bxxxx
Address Line 1: xxxx Axxxx Ave
City/State/Postal Code: Wxxxxxxx, CA 90601
Country: United States
Phone Number: xxxxxxxxxx
Order Details
--------------------------------
Item : Servo, DS180DLHV
SKU : DS180DLHV
Quantity : 5
Item Price : $39.99
Item Total : $199.95
--------------------------------
Item : Servo, DS415BLHV
SKU : DS415BLHV
Quantity : 5
Item Price : $89.99
Item Total : $449.95
--------------------------------
Item : Servo, DS630BLHV
SKU : DS630BLHV
Details : 8->6V TRA, else ignore: Power combo - none
Quantity : 2
Item Price : $119.99
Item Total : $239.98
--------------------------------
Item : Servo, DS205BLHV
SKU : DS205BLHV
Quantity : 2
Item Price : $79.99
Item Total : $159.98
Sub-Total: $1,049.86
Shipping Method: USPS
Shipping Amount: $42.55
Estimated Tax: $0.00
Total: $1,092.41
John, love the servos but shipping cost are a bit excessive don't you think? Sxxxx
A2. Forgive me, Sxxxx, but you don't know the half of it, pal. Let me explain, *your* box to to *your* address, meaning exact costs for *your* order came to . . .
- $26.90 = postage
- $21.75 = insurance
- $6.41 = wages ($21/h + SS/Medicare 6.75% is $22.61/hr @ 17min - call it [($22.61/60)*17]
- $2.37 = computer/printers/apps
- $1.18 = facility (P&P square footage w/insurance) per package for 2022 (2023 not available)
- $1.56 = box ($0.82/box + $0.59/box shipping + $0.15 peanuts/tape/labels)
- Total is $60.17
Now in fact, we get a volume break on postage and insurance so it actually comes out to . . .
- $19.37 = postage
- $13.75 = insurance
- $6.41 = wages ($21/h + SS/Medicare 6.75% is $22.61/hr @ 17min - call it [($22.61/60)*17]
- $2.37 = computer/printers/apps
- $1.18 = facility (P&P square footage w/insurance) per package for 2022 (2023 not available)
- $1.56 = box ($0.82/box + $0.59/box shipping + $0.15 peanuts/tape/labels)
- Total is $44.64
. . . and you were charged $42.55 which is actually a touch *less* than what it actually cost us.
Look, we're not running some bush league operation here, we have a beancounter adjusting P&P figures every quarter, e.g. looking back at what rent/insurance costs were per square foot, as well as labor costs, adjusted postage costs, and taking into account all the extras like boxes, packing peanuts, tape, labels, plus computers, printer, apps, etc. Basically, everything it really costs to ship a box (plus updating postal rates every darned time the USPS raises the prices.
1st major point being, you paid what you paid because there's no such thing as a free lunch.
Strikes you a high? Well, guess what? Me too! But there's nothing you, or I, can do about it but grin and bear it. Heck, even if it were in my disposition to fuck my employees and instead of paying pretty decent, I hired and paid McWages (think $12-14/hour) and accepting what comes of it, high turnover and constant training, then we're still only talking about maybe saving, what $3 on this order, maybe a bit less?
Meanwhile, yesterday Lynn and I went to Jacksonville for a doctor's appointment at Mayo Clinic for my lower back. So on the drive home, at around 1:30PM, and feeling a bit peckish, we slipped into a Wendy's drive through. Two #1 burgers with fries and drinks (regular, not large) came to $23 80. Think I was happy about it? Well, no, in point of fact I wasn't *but* I just shook my head and paid because this is what our present administration has given us over the last three years, inflation out the fucking wazoo! Frankly, there's nothing little people like you and me can do but vote come November every two years and note; we have the government we deserve because only 63% of the population actually drags their sorry ass carcasses to the polls (and this was a record high set in 2020) because usually it's considerably less - Pew Research.
But think about it, you and me? We got it good. What about our kids getting hosed on rent going up 10-15% a year? Like an apartment me an my wife rented for $350/month in 1980 is costing $1500/month today . . . for the same damned apartment!
And a Honda Accord when she and I graduated university, a brand new 1982 model built in Marysville, OH set us back $11,800 with electric windows, nice stereo, A/C, the works, but now sees a new Honda Accord is going for $37,000.
Now take note something else; you're paying the exact same $40 this year for DS180 six years ago, and the same $79.99 for DS415, and the same $119.99 for DS630 as from three years ago (and in Jan 2021 you paid $109.99 for some DS470 and now, the upgraded version, the DS505 is $priced at less - $99.99 - because we've finally got some good volume and thus, are getting better prices because we can negotiate stronger *and* are passing them along to our buyers (that would be you, pal).
And it gets better for as a ProModeler customer because with special regard to the DS180 you just ordered (photo below), you're now getting a brand new and improved all-stainless steel gear train (made of 303 and 18/4) when before it was an all-metal gear train composed of brass and 1018 steel *and* you're also getting an improved custom molded silicone seal instead of an o-ring at the output shaft.
Minor point being, you're actually getting more servo for your money from us these days!
. . . so to be honest, I feel we're doing more than our share in terms of holding the line price-wise. And not just on our products but in fairly charging for the shipping costs when all we see are price increases.
This, at a time and place when everybody else is busy raising prices (check on Hitec's D645MW and it's new higher price - for their 180oz-in and 0.17sec/60°, e.g. same-same spec as the DS180. Honestly? You'd be the only one on the planet thinking theirs is a better servo *but* it's now priced higher than our servo!
2nd major point being, it may seem like you're getting fucked on postage, but in truth you're only paying what it costs us. This is because I, as a businessman
a) a long ago, decided P&P is not a profit center.
b) and everybody carried their own weight
--
TANSTAAFL
John
Summary
Reason we don't fret about the actual individual postage numbers (and you shouldn't either), is the numbers aren't individually perfect, but they 'are' balanced out over the total orders for the year within the shipping engine. So in keeping with Yogi and baseball, no harm, no foul at small variations because they even out. Bottom line? We focus on . . .
- making the best servos money can buy
- offering them to you for a very fair price
- delivery using what it really is costing us
Let me close with this: the title of this post is, '$14 for postage is a rip off!' and as it turns out, who is sometimes going in the hole for an individuals order is us!
Respectfully, I'm baring the soul of a business' inner workings (part of what's meant by trade secrets). This, to prove what I began with, shipping is not a profit center for the business.
Fortunately, for you, you're still getting the best servos in the world, doing so for a very fair price, and we're not even screwing you over with the shipping to make up for it! Win-win.
Better parts. Better prices. The formula is simple. Extends to all your dealings with ProModeler
- 10-bolt porcupine case
The superb 10-bolt porcupine center case is precision machined by CNC-mill of 6061-T6 aircraft aluminum alloy. It's the very heart, the foundation of the servo - qty 0 shortcuts!
You get ten machine-thread screws instead of 4 (the only place you get well screwed by ProModeler), which means you get not just better cooling but more rigidity, too.
Real value with ProModeler!