Subject:
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Re: Lego Direct (was Re: Georgia LEGO Outlet is Cool!)
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Newsgroups:
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lugnet.dear-lego
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Date:
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Mon, 27 Mar 2000 14:07:01 GMT
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richard marchetti wrote:
> > Rant all you want, but TLC makes more money selling to me than to you. So it's
> > in their interest to do so. If you don't like it, tough.
>
> I think these statements are false.
>
> Why and how do they make more money selling to you than to me and everyone
> else? I thought S@H was 24/7 -- that they are there regardless of whether
> anyone is calling or not. Isn't it the same weight to ship, and even if it
> weren't, couldn't they set the price to cover for that expense? Again, you
> are spouting empty nonsense like it is some sort of "fact" that you magically
> pulled out of your behind.
Richard, you still don't get it. This is in fact what S@H does, and in
fact because of their pricing scheme, they make more of the person who
orders 10 of set X than 10 people who order 1 each of set X. Why? Well
first, the shipping cost isn't perfectly linear. Second, The labor to
package the 10 orders for 1 set is close to 10x the labor to package the
single order for 10 sets. Third, since they have enough buisiness to
require more than one sales person (at least during the day - and I'm
not sure how the night system works, I get the impression that it is run
by a fulfillment service which may even have a pool of sales people
serving more than one supplier), there is a labor cost of the telephone
ordering for the 10 calls versus the single call (you can only wash that
cost away if there is not enough volume to keep even a single sales
person busy, you can wash some of it away if your sales force is so
small that your volume really requires 1.5 people, but to keep the call
response time reasonable, you bite the bullet and hire two people). Then
there's the accounting cost of the 10 transactions versus the one.
Now it is true that some mail order places set up their shipping and
handling charges to be non-linear so the large order gets a smaller
charge. I would almost guarantee that this is actually done more to
encourage larger orders because they're cheaper than to save the
customer money (though it does grant some goodwill which probably does
reflect in more repeat buisiness, look at how Warner Bros. lost a lot of
potential future buisiness because their ordering system was so painful
[and didn't get ANY product to almost all of the customers - for some
reason the powers that be blessed me and I actually got the bulk of my
order, must be because I go to church almost every Sunday... - actually
it was because I ordered a bunch of sets that other people weren't
ordering]).
--
Frank Filz
-----------------------------
Work: mailto:ffilz@us.ibm.com (business only please)
Home: mailto:ffilz@mindspring.com
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Message is in Reply To:
 | | Re: Lego Direct (was Re: Georgia LEGO Outlet is Cool!)
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| (...) This is getting to be exactly what I think of much of what you post, Larry -- or did you think you had a corner on this market too? The difference is that I am not quite as self-serving or puffed up as yourself, apparently. My ideas are a (...) (25 years ago, 27-Mar-00, to lugnet.dear-lego) !
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