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On Wed, 1 Nov 2000 01:07:13, "Frank Filz" <ffilz@mindspring.com>
wrote:
> One potential problem I see with more and more on-line ordering is whether the
> distribution network can handle it. The distribution network for traditional
> stores very much depends on a lot of the same stuff going to the same place.
But it also depends on having people unload the cartons, unpack the
cartons, put the unit packages (which are higher-priced because they
have to have "eye appeal") on shelves that mostly have to be located
in high-rent districts so they're convenient for shoppers to get to,
tidy up those shelves after each wave of shoppers passes through, and
ring up and bag each unit.
Much of mail order's ability to compete comes from
reducing/eliminating those costs. And it's in a much better position
to take advantage of improvements in automation to cut them even more.
> It's interesting to note that Airborne has eliminated
> delivery to residences, transferring the goods to the Post Office (I forget, is
> the Post Office self supporting?
Yes. For many years now: I think the last subsidy was paid in the
early 80s.
It's also in a good position to ramp up to meet increased demand:
they have lots of practice, since they have to do it every year for
Christmas. And they have a big advantage over Airborne, and even
UPS: they already have someone going past your house every day, so
the incremental cost of adding one more package is very small. Otoh,
Airborne might have to send a driver several miles off her usual route
to make a home delivery. Even UPS might have to add several blocks of
driving if you're on a street where they're not already delivering
every day.
If fully exploited, the net effect of doing much of its business by
mail order should be a significant benefit to both TLC and its
customers.
Ran
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