How much does "Free Delivety"really cost?

IFIFFERING free delivery can be Vvery expensive for the average lumber and building products dealer. Unfortunately, many retailers think they have no choice.

Story at a Glance

The costs of free delivery dealers devise ways to offset expenses, charge for extras.

"We lose money on deliveries," admitted one owner. "The market does not bear delivery costs and chain-type home improvement centers force us to stay competitive by not charging for delivery."

Criticized another retailer: "Far too many lumber dealers do not have the financial sense to charge a 'fair rate' for delivery. In these days of increasing taxes and other costs, dealers must do all they can to reduce costs. Just about every other retail segment charges a 'fair' delivery charge."

Yet many dealers see speedy, nocharge delivery as one of the few services that can truly separate them depreciation, replacement cost.

Still, there uue ways to incorporate "free" into your delivery program without losing a bundle.

Typically, qualifying for free delivery depends on the total value of the order, the distance to travel and the required date of delivery.

According to the Mid-America Lumbermens Association 1994 Delivery Cost Survey of 256 members, over half have a minimum purchase required for free delivery. The amount ranged from $50 to $1000, with $253 the average.

Many have a lower minimum delivery charge for contractor orders (especially from bigger customers) than consumer orders. Customers miles, with 48 miles the average. The longest one-way delivery averaged 45 miles, ranging from 15 to 350 miles.

Other ways to offset the costs of from the competition. Others have tried to switch to charging but "have never been able to make it stick."

And even those who do charge often lose money on the service. It can be difficult to pass on to the customer all the expenses of delivery: driver wage, maintenance, mileage, vehicle insurance, fuel cost, down time for repairs, liability insurance, purchasing below the required amount might pay a flat charge or a percentage of the material, depending on the distance involved, perhaps with a preset minimum and maximum.

Other dealers charge for deliveries on a sliding scale. The lower the amount purchased and the farther the distance traveled, the greater the rate. At various minimum purchase amounts. deliveries are free for the first specified number of miles. For example, for a purchase of at least $150, delivery is free for the first 10 miles, 75p per mile thereafter. For a purchase of at least $250, delivery is free for the first 25 miles, 75Q per mile thereafter.

Those charging for delivery typically offered either a flat rate ($14 was the average) or billed by mileage (an average $1.13 per mile). The normal delivery radius for MLA survey respondents ranged from five to 200 free delivery include: o Making free deliveries on a "going-that-way" basis. o Negotiating charges for delivery outside of the normal service area. o Offering certain items at a pickup price and a delivery price. o Allowing a percentage discount on cash and carry. o Not offering free delivery on "sale items" or hard-to-handle items, such as shingles, sheet rock, railroad ties, cement, concrete slabs and blocks. o Including the condition that a single driver will be able to do all necessary unloading, stipulating no shipment can be placed in a house or on a roof unless the customer supplies additional help at the site, or charging for an extra man on the truck. o Waiving the delivery charge to contractors to encourage a smaller number of full-load orders instead of several partial-load orders.

A free delivery policy with few conditions can be more of a disadvantage as it eats away at potential profits. As one dealer concluded, "Good customer service does not mean free."

THE HUGE storage racking sysI- tems of home centers and lumberyards may hide some serious threats to person and property. A selfinspection program can prevent potential accidents through an organized system of checking for danger signs. The Rack Manufacturers Institute has identified I I of the most common rack hazards and corrections that can be made to eliminate them.

l. Mir.tigrr-ent of Racks

Racks can be rnisaligned by being out of plumb vertically or horizontally, or not corrected for the slope of floors. Sometimes various size racks are improperly butted up against one another with protrusions in the aisle. Racks improperly connected together can cause whole groups of misalignments.

Misalignment is particularly a predominant hazard in drive-in struc-