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<blockquote data-quote="Ricochet1a" data-source="post: 986483" data-attributes="member: 22880"><p>It is getting into definition of words... specifically: What constitutes "selling", what is a "real" discount and what is merely expected industry standard. </p><p></p><p>Finally, the issue of whether FedEx sales is giving discounts below industry standards for Ground product while not doing so for Express product. </p><p></p><p>I define selling as not only making a single offer of final price (here's my offer, take it or leave it), but attempting to BEAT the price offered by the competition. If I stick signs on a lot of cars I may want to sell stating one price, and someone across the street places signs on their exact same cars with a lower price - I'm NOT selling cars. I may end up picking up the occasional sucker sale, but I'm not selling cars - the guy across the street is. About all I'm doing is wasting my time making signs.</p><p></p><p>This is what FedEx is doing with Express right now. They are offering "take it or leave it" pricing - but UPS is offering a lower price whenever they really want to "poach" a potential customer. </p><p></p><p>The converse is true with Ground. Because the margins for Ground product are so damn high right now, FedEx sales can and DOES offer cut rate pricing. They will ask customers what rate they are receiving from UPS, then they will come back with a lower price quote to grab that volume. Put simply, FedEx is able to grab increased share of the "routine" package market due to the extremely low wages they compensate their "employees". </p><p></p><p>This is classic economics, FedEx sales has the ability to undercut UPS due to the structure of Ground. They can't do this with Express, since Express is barely making a profit right now - there is no room (under current structure) to offer discounts above industry standard. FedEx sales KNOWS this.</p><p></p><p>This is why FedEx ISN'T "selling" Express right now (they make a take it or leave it offer), BUT they are "selling" Ground every opportunity they can (they actively try to undercut UPS pricing levels). </p><p></p><p>All these leads that Express Couriers are to supposedly turn in AREN'T going to boost Express volume (they may get the occasional "sucker sale"), these leads are going to try to boost Ground volume.</p></blockquote><p></p>
[QUOTE="Ricochet1a, post: 986483, member: 22880"] It is getting into definition of words... specifically: What constitutes "selling", what is a "real" discount and what is merely expected industry standard. Finally, the issue of whether FedEx sales is giving discounts below industry standards for Ground product while not doing so for Express product. I define selling as not only making a single offer of final price (here's my offer, take it or leave it), but attempting to BEAT the price offered by the competition. If I stick signs on a lot of cars I may want to sell stating one price, and someone across the street places signs on their exact same cars with a lower price - I'm NOT selling cars. I may end up picking up the occasional sucker sale, but I'm not selling cars - the guy across the street is. About all I'm doing is wasting my time making signs. This is what FedEx is doing with Express right now. They are offering "take it or leave it" pricing - but UPS is offering a lower price whenever they really want to "poach" a potential customer. The converse is true with Ground. Because the margins for Ground product are so damn high right now, FedEx sales can and DOES offer cut rate pricing. They will ask customers what rate they are receiving from UPS, then they will come back with a lower price quote to grab that volume. Put simply, FedEx is able to grab increased share of the "routine" package market due to the extremely low wages they compensate their "employees". This is classic economics, FedEx sales has the ability to undercut UPS due to the structure of Ground. They can't do this with Express, since Express is barely making a profit right now - there is no room (under current structure) to offer discounts above industry standard. FedEx sales KNOWS this. This is why FedEx ISN'T "selling" Express right now (they make a take it or leave it offer), BUT they are "selling" Ground every opportunity they can (they actively try to undercut UPS pricing levels). All these leads that Express Couriers are to supposedly turn in AREN'T going to boost Express volume (they may get the occasional "sucker sale"), these leads are going to try to boost Ground volume. [/QUOTE]
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