Rising Shipping Prices Change How Small Businesses Do Business
COLUMBIA - ArmyGear.net is a military surplus store that's been in operation for more than 25 years. During the 1990s the store put its merchandise on the Internet to further expand its profit. Due to rising shipping prices from their shipping company of choice, UPS, the store has had to slash prices for products sold on the website to keep far-away customers interested.
Despite the drop in online prices, UPS Assistant Manager Bob Hayes said that the store is doing more than alright for itself.
"The store's doing very well, especially in the last couple of years. I mean, people have been more concerned about their personal safety and the safety of their families... They buy more gear to take care of emergency needs, such as bug-out bags, and, at the same time, people are still buying good-quality emergency gear, such as for camping purposes," Hayes said.
Hayes said the rising shipping costs can't be ignored, either. In early July, FedEx Freight, a subsidiary of FedEx Corporation increased its shipping rates by 6.9 percent. Effective January 7, 2013 FedEx Express will increase its shipping rates by 3.9 percent.
Hayes said that if the shipping costs cut into website profits enough, something will have to be done.
"Well, generally we have to take a look at what our profit margin is on things that we have on the website, and I can't speak for the warehouse management or the owner, but I would say that if we were to lose too much money on something that's on the website because of shipping costs, then we would just have to decide whether or not to carry it on the website anymore," Hayes said.
Despite this possibility, ArmyGear.net Inventory Manager Chris Pinnell said the business would survive.
"Shipping will not cause us to go out of business anytime. We're dependent on the shipping but the charges should never get so high that it would put us out of business," Pinnell said.
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