on Jun 20th, 2011 in Pricing & Rates | 7 comments
 
Offering volume incentives is a common business practice in the U.S. and around the world. Although the U.S. Postal Service offers incentives to businesses that presort their mail, the agency does not offer incentives based strictly on the volume of packages shipped. One reason might be that offering volume incentives would lower the profit margin on each package shipped; yet, the potential volume increase of items shipped would make up for the smaller profit margins. E-retail is a multibillion-dollar industry through which millions of transactions are made via clearinghouses, such as Amazon.com and eBay. The e-retail industry continues to grow and includes on-line sales in virtually every industry. In the U.S., online retail spending for the Q4 2010 reached a record $43.4 billion, up from $39.0 billion in Q4 2009. This accelerated growth rate represented the fifth consecutive quarter of positive year-over-year growth and second quarter of double-digit growth rates in the past year. This trend will likely continue as more online people turn to the internet for their shopping needs, and younger, digital-savvy generations increasingly flex their spending power. Companies like eBay, Amazon.com, and traditional retailers with strong web operations should continue to benefit from this growth. Increases in e-shopping means an increase in the quantity of goods shipped is also increasing. Most vendors have their preferences, which are frequently based on cost. Should the Postal Service take advantage of the increased amount of shipping generated by e-retailers by offering incentives? Yes or no, and why? This blog is hosted by the Office of Audit’s Financial Reporting Directorate.

7 Comments


HELLO,
Above mention:Increases in e-shopping means an increase in the quantity of goods shipped is also increasing. Most vendors have their preferences, which are frequently based on cost. Should the Postal Service take advantage of the increased amount of shipping generated by e-retailers by offering incentives?

I think the result is a positive.

USPS has been doing volume-driven discounts with the Summer Sale, Winter Sale, etc. As long as the discount covers the expense and overhead and still yields some margin for profit and as long as it isn't viewed as unfair competition to other shippers, indeed we should be offering such discounts on packages.

Would be great if you offered discounts to e-retailers or even bloggers that ship many things. Another thing you should explore is direct mail campaigns for very small businesses or bloggers that would like to advertise either their online business or website.

You could make those one page flyers with say 4, 6 or 8 ads on each page and deliver to every address and or give the company an option to market say to a certain population (hispanics, businesses, etc). But this should be done not only locally but also nationwide.

Another thing would be to offer the direct mail or advertising option of mailing say 200, 300, 400, 500 pieces so that it would be affordable to people working from home. This would help home businesses but would also get more business for you.

You can save the USPS but you need to think about helping your customer base and this way they will help you in return. More people will care about saving the USPS.

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The modern world is growing at a rapid pace. 30 years ago, no one even knew what the Internet was, and few people had access to a computer. In todays world the internet technology has revolutionised the way that we spend our time, from internet TV to internet shopping and on-line games. A lot of the shopping we do can be completed online and paid for from the comfort of our own home, and the choice of products and suppliers is endless, we can now place an order with a supplier on the internet, pay for it and have it delivered the next day, Next day parcel delivery from internet shopping has now become a way of life, and is taking over from the traditional high street, with no parking problems and no walking around in the rain,
With the internet has also come the demise of the "Yellow Pages" no longer do we look in the "Yellow Pages" for services or products, we just go to a search engine like "Google" enter the product or service we require and we get a list of may be 1,000,000 suppliers from all over the world, with each supplier providing us with prices, descriptions and images of the products and giving us a much wider range of choice than we would have had 30 years ago.

your comment is very interested.

Your comments are really interesting. Adding incentives will certainly help e-retailers. More companies should do this as it increases the Economy

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