@femmefan1946 wrote:
I know with the volume contract we had with my previous employer, UPS ground rates were still a good 10% less on average, although the claim rates for shipping damage were much, much higher.
That's interesting-- and a little scary.
UPS is unfortunately pretty rough on packages, particularly with oversized items which get tossed around. You quickly learn which categories of items are no bueno to ship via UPS ground. The problem with a low rate structure is that the costs that can be driven down are those that effect the line level employees and unhappy staff = worse handling for your items. FedEx and Purolator were much safer bets for that reason, at least at the time.
The small guy simply can't leverage credit or inventory to do the same.
Those of us in the collectibles field perhaps have less of a concern about this.
It's more of a problem for those who must compete directly with WalMart, BestBuy or The Bay.
But we still have to pay attention to our procurement costs. As they say, you make money when you buy, not when you sell.
Collectibles are still one of those niches that mainstream retailers (or distributors for that matter) can't do very well. Product management/buyers don't have the knowledge or the retailers lack the engagement with that community. Amazon is a good example of this, where they do carry some collectibles but you routinely see complaints of damaged items as their cookie cutter shipping methods (ECT 20'ish boxes plus 1 air pillow) don't really jive with that market.
The inequity in procurement costs really hurts the average small business. In the categories I was previously involved with a 5%+ invoice price difference wasn't unusual, even more so if you purchased inventory in USD for the product lines where distributors purchased their inventory in USD, thereby eliminating their FX hedge. 5% was the average net margin from a front end perspective, so essentially a small retailer would have to sell at cost or below 24/7 to just be competitive.
Those categories were very lax from a MAP pricing perspective, and now the vendors/suppliers are wondering why their business has dropped off considerably. All the small guys went out of business, or in worse cases, many of them did a runner leaving suppliers stuck with six figure unpaid debts. Targeted free shipping campaigns, self-funded or partially funded via vendor sell through rebates (for a given product you might receive a $5-$20 back end rebate for a set period) on key products were used to kill competition. In that sort of scenario the small guy has zero chance.
I think the advantages to 'free' shipping do increase for those of us with TRS discounts which lower the FVF we pay on the shipping portion of our selling prices, as well as for sellers in categories (like clothing and books).
And then we can add in the PP discount or the reduced cost of using discounted postage stamps.
There is that, but sellers with a good attach rate have to be mindful of overcharging on shipping this way. In my niche I can routinely outprice sellers in China on multi-item purchases as they rely on this method and have stolen a fair bit of share with regular buyers in the category who have cottoned on to this.
It's obvious to small sellers that they are at a disadvantage when it comes to shipping costs, but the 
