Results 1 to 6 of 6

Thread: Delivery Charges

  1. #1
    Join Date
    Jul 2008
    Location
    Alexandria VA
    Posts
    15,890

    Default Delivery Charges

    A customer who lives 90 miles from my store wanted free delivery on her purchase and thought I should 'throw it in' as part of the deal. I explained to her that I charge $ 115 per hour outbound on the truck and she thought that was too high ($ 172). Delivery is done as service and is not a profit center - so I try to do it at cost:

    2 men on the truck @ $ 16 per hour each. 4 hour round trip = $ 128 in labor costs (higher once I add in matching SSN and Medicare contributions)
    180 miles in 12 mpg truck: 15 gallons of fuel @ $ 4 per gallon = $ 60

    Total cost without adding maintenance/insurance/wear and tear is $ 188 to me. So actually I am doing it below cost and need to raise my rates! I think a lot of folks don't realize how much it costs a store to do a delivery - even my local customers often say "But I"m right around the corner, just three miles away" and balk at the $ 65 minimum charge. By the time we load the furniture, strap it in, program the GPS, go on-site for delivery and return, that $ 65 is all used up.

    Commercial insurance is brutal on a truck. While my delivery truck is only worth about $ 6,000 (its twelve years old), the annual liability insurance on it is $ 2,700, I don't carry comp and collision on it.

    Delivery is a service and we are always glad to do it, but there is a very real cost to running a truck and two men on it and I try to do it at as reasonable a cost as possible
    Last edited by drcollie; 03-21-2012 at 11:23 AM.
    Duane Collie
    Straight answers from thirty-six years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum.

  2. #2
    hglaber Guest

    Default Re: Delivery Charges

    I know it's not the consensus view, but whenever I hear of something "thrown in for free" I lose a bit of trust for the vendor. I know very well that in business free doesn't mean the cost is zero. Free means the cost is hidden.

    It might be the case where I have to subsidize part of some other customer's higher costs because if I don't, that customer won't buy (like free delivery).

    It might be because the real price is my personal information (like free grocery store discount card programs).

    It might cost me a little of my freedom to shop elsewhere (like free something after 10 punches on the card).

    It might be true cost of the item is so low it would reveal a quality problem so they throw in other stuff to show value through sheer quantity (You get ALL THIS for $XX! Including your FREE tchotchke and FREE whiz bang!!!).

    The point is, I don't actually know which reason it is when something is included for !!**FREE**!!. So, whenever I hear "free" I think "sneaky" and it turns me off. I know it works. I understand why businesses do it. I even know sometimes it probably works in my favor. But I'd rather it be out in the open so I can make an informed decision. I like itemized quotes and receipts.

  3. #3
    Join Date
    Jul 2008
    Location
    Alexandria VA
    Posts
    15,890

    Default Re: Delivery Charges

    Quote Originally Posted by hglaber View Post
    I know it's not the consensus view, but whenever I hear of something "thrown in for free" I lose a bit of trust for the vendor. I know very well that in business free doesn't mean the cost is zero. Free means the cost is hidden.
    You're a smart man! I have a lot of customers pickup with their own trucks, so my feeling has always been 'why should they have to pay for a 'packed in' delivery fee (packed into the retail selling price) when they are doing the work?

    I am seeing big hikes in what it costs me to land furniture at my store. Last summer a sofa coming up from North Carolina in bulk was $ 48 to land, now its $ 75 and will likely go up if diesel fuel prices continue to rise.
    Duane Collie
    Straight answers from thirty-six years in the business.
    My Private Messages are Disabled - Please ask questions here in the forum.

  4. #4
    Sofadoo Guest

    Default Re: Delivery Charges

    Excellent post, hglaber!

  5. #5
    Join Date
    Oct 2008
    Location
    High Point, NC
    Posts
    259

    Default Re: Delivery Charges

    Hi Duane,

    The solution to the "free delivery" dilemma is easier to recognize in lower priced furniture.
    My customers taught me long ago that they would rather buy a $1200 sofa with free delivery than a $1000 sofa with a $200 delivery charge. (That's about what it actually costs me to ship a single sofa from North Carolina to California.)

    Jeff Frank
    Simplicity Sofas

  6. #6
    hglaber Guest

    Default Re: Delivery Charges

    I can see where it would definitely be a smart move for many businesses. For online businesses it has become almost mandatory. Amazon has provided ample proof of how much people like (and how much they will actually pay for) free shipping. Mail-order plant sellers are just sorting that out now. If you read reviews online, those that charge the actual shipping cost get hammered for high shipping, even when the rest of the review is a rave when it comes to the product. Yet if they want to compete with the prices of the free shipping places, they can't possibly continue to provide the same quality. Some seem to have just baked the shipping into the price, even though its higher than the competition, hoping the quality speaks for itself as Jeff suggests.

    Sometimes I'm glad I'm cubicle serf that doesn't have to try and figure this stuff out. I'll keep the photons flowing and pick up my check at the end of the week thanks.

Similar Threads

  1. Sun Delivery Excellent Once Again 9/2/11 !!!!!
    By levitt11 in forum Customer Reviews & Shipping Information
    Replies: 7
    Last Post: 09-05-2011, 11:12 PM
  2. Special Delivery
    By drcollie in forum The Lobby
    Replies: 0
    Last Post: 01-05-2011, 04:50 PM
  3. Question Regarding Delivery (Sun Delivery)
    By SemperFiMom in forum Customer Reviews & Shipping Information
    Replies: 10
    Last Post: 05-21-2010, 11:26 AM
  4. Delivery of the Year
    By drcollie in forum Mattresses and Bedding
    Replies: 2
    Last Post: 09-16-2009, 10:20 PM
  5. My Delivery Secret
    By drcollie in forum The Lobby
    Replies: 1
    Last Post: 12-17-2008, 01:10 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •