Summary
This article is about shipping rates increasing in the United States. FedEx and United Parcel Services (UPS), two popular shipping companies, have announced that they will be increasing their shipping rates due to the raise in gas prices. The U.S Postal Service has also made a request to increase their rates but the request was denied. However, because of their current financial trouble they may still get their request approved later on. Small businesses will have to find ways to save money on shipping but still manage to get their packages shipped. Although companies want to save money there are still other questions to consider such as, which company has reliable services? How detailed is the tracking information? And which company can get the job done the quickest? The cheapest service may not always be the best choice. Several ways businesses can save money on shipping are: asking other owners which service companies are good and which are bad, finding shortcuts such as putting documents into smaller packages, use services that take longer time to ship if it is not urgent, and negotiate with other companies.
Reflection
Reflection
This article is related to Chapter 11 because it is related to the Freight-in account. Since the cost of shipping is increasing the Freight-in account will increase as well. This account also affects several other areas as well. It is used to help determine the Cost of Goods Sold which is related to the gross profit and net income on the income statement. The result of an increase in the Freight-In account is that there will be a decrease in the income statement. Therefore, companies might make smaller purchases to save money on shipping which will then also affect the Cost of Goods Sold.
Connection
Connection
Bigger businesses may be able to take in the increase of shipping and still manage to make a big profit. Smaller businesses on the other hand might not be able to afford this increase and will have to look elsewhere or make changes in the company such as hiring fewer workers to unload products. Or they might add the increase in shipping to their product and have the consumers pay for it. However, consumers may not want to buy the products if the prices are raised which will hurt the business even more.In the end, either the consumer or the business will suffer from the increased shipping rate.
From this article I learned that even simply changes such as shipping costs can directly affect the profit of businsses and the costs of goods for the consumer. I think your suggestions for businsses on how to save money can be quite useful. I hope that by reducing expenses, businesses will be able to absorb the increased cost in shipping and be able to provide the same products to consumers at no extra cost. Thanks for the tips on how to save money on shipping as a consumer, I'm sure they will come in handy one day.
ReplyDeleteanider said...
ReplyDeleteBeing an ultimate consumer myself, I would definitely not want to pay even more for shipping fees when shopping online or sending packages internationally. I can agree on smaller businesses increasing their shipping fees and have us pay for it. Larger businesses sometimes might not mind to pay the extra fees for us consumers but not all businesses would because everyone would love to make a little extra money. Your article was a pleasure to read because it had valuable information for me to use when it comes to shipping. Great work, keep it up.