Have you ever been to a fine-dining
restaurant where you don’t see the prices on the menu? Let’s say you
go to a boutique jewellery shop. All items in the display cases are
attractive and gorgeous. But unless you are rich, wouldn’t you prefer
prices to be displayed on the items so that it will help you make a
decision, without having to ask the store salesperson for each and
every item? It is not only embarrassing, but also inconvenient.
The display of pricing on the product
and service is important for us to make a decision on whether or not
we can go ahead with it.
If is beneficial to the consumer, the
consumer feels it is perfectly priced. If it isn’t, it is
“unreasonably priced” or “overpriced”.
If the products are priced too high, it
gives the assumption that the quality must be superior and evokes a
sense of exclusivity. If it is cheaper than the usual, it is to
convey that the product might be of a slum one.
The buyer or the person who pays thinks
he has the right to determine the price for a product as he is
paying. The seller, the offeror, or the creator of the product thinks
that it is his prerogative to determine a price for something, as it
is something he has created.
But in the end, who’s winning?
Majority of the demographics is usually
budget-minded. The right pricing makes all the difference between a
successful company and the one that is trying to be.
Big companies that have a goal to
please most demographics always have multiple offerings for different
requirements. This way, we all get to pick the type that suits us
best.
FedEx and UPS, the carrier giants had
long announced their new pricing formulas. Namely, to highlight their
controversial dimensional weight pricing.
Is it really all set to do damage as
some shippers are venting?
“I don’t think they should be
concerned if they’re truly being honest with measurements and
classifications.” said Joe Bartone, President of Shift Freight LLC.
Bartrone feels that the whole
institution of dimensional weight pricing should not affect shippers
much. Not really.
Just as all is fair in love and war,
the dimensional weight pricing comes around as fair in the shipping
world. After all, the carriers should be rightfully paid for the
space used in their trucks.
This is mostly seen as a hostile system
for shippers. All along, if they were to ship an expensive hair
trimmer set, they would wrap several drapes of bubble wrap compounded
by at least two layers of styrofoam bricks. All this, taking up at
least 2 and half times the actual size of the trimmer. The shipper’s
intent is actually quite honest. He wants the product to reach the
customer’s hands intact without any breakage in its long and enduring
transit hoops.
But what about the carrier? If each
shipper is using up two and half times the space extra from the
actual size of the products multiplied by the number of packages, the
carrier company’s trucks are bringing in less money per load.
Dimensional weight pricing asks the
shipper to reconsider his packaging design and it allows for
excellent transparency between shippers and carriers, as all that is
required is a tape and weighing machine to determine the actual
pricing of the package.
This system has encouraged shippers to
consider USPS who offer significantly lower prices for ground
shipping under its Commercial Base and Commercial Plus categories,
saving shippers 25% over FedEx and UPS.
It is too soon to place a verdict on
dimension weight pricing system. On one side, the carriers’ space
usage is justified. On the other, shippers are trying better
packaging designs, as this pricing model is something they will have
to live with.
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