Low shipping with the big companies

[Holly]

How are the bigger companies able to offer shipping, let's say for $5.95, on orders under $75.00. I understand how they could do this if it was an order at a home party through the consultant because everyone who buys has to pay a certain flat amount for the shipping and handling and most of the time all the products are sent together to the hostess or the consultant. But, I have seen a low flat shipping of $5.95 on some of the big company consultant websites where the shipping would be $5.95 for anyone who places an order online. This is what stumps me. By the time the company pays the consultant the 25% cut + other possible commissions and the cost of overhead and making the products, how do they still make anything? Shipping on an order of $75.00 worth of candles would be way more than $5.95 to a lot of different locations. I have noticed some of these companies' products are either priced about the same as mine or a bit higher on some but not that much for the quality and type of product. What is the secret? I hope my question makes sense.

[Stella1952]

Volume shippers get better rates from UPS & FedEx than mere mortals.

[TxSioux]

Stella's right, volume shippers get WAY better rates that allow them pass on the discount. My husband used to work for DHL & now works for Fed Ex. To give you a prime example: Dell is currently renegotiating their shipping contract. They've been using DHL, but DHL is shifting away from home delivery -- they've actually been losing money w/ the Dell account. So, FedEx won't match the current DHL price & Dell's trying to get UPS to work a deal. It just amazes me why anyone would value a customer that costs them money? I wonder if Dell has a whole division working overtime trying to figure out how to outsource this problem! LOL

Susan.

[CareBear]

yup, they contract for rates. we don't have that much pull...

[MissMary]

I don't know - some of these "home" candle sales places, you could get to $75.00 with two or three candles!

[Holly]

Thanks for the input. I figured it would have to do something with contracts and the fact they mail larger amounts consistently. I guess the secret is.....you gotta be a big guy with tons of business and do lots of shipping.

MissMary, you are right, some of the candle companies could sell about 3 candles which would end up close to $75.00. :undecided But, some of the ones that I have seen with these great shipping rates all the time have decent pricing.

[sudsnwicks]

In addition to enjoying volume shipping rates, I also wonder if these companies have built in some padding to their prices to help offset a bit of the shipping. Being big companies, their ingredient costs would be lower than ours as they are able to buy in bigger bulk.

[Holly]

In addition to enjoying volume shipping rates, I also wonder if these companies have built in some padding to their prices to help offset a bit of the shipping. Being big companies, their ingredient costs would be lower than ours as they are able to buy in bigger bulk.

Yes, that definitely is another benefit for them.....their ingredients would cost less because of the bulk they can buy. I am not real familiar with how much is cut with big bulk but from the amounts I have seen it is not a whole lot, but maybe there are even bigger cuts when you get that big that we are not seeing. It is just hard to be a little guy......tryng to offer a great program for reps, consultants and good product and shipping prices for customers.