Inside Newegg: They give us a Tour and you a Prize
by Anand Lal Shimpi on February 14, 2006 3:31 PM EST- Posted in
- IT Computing
Shipping and the UPS/FedEx Debate
With the box taped your order is now on the last leg of its trip through Newegg's warehouse as it heads down the final set of rolling conveyers.
The metal crates and employees that you see below are all for Army Post Office and Fleet Post Office (APO/FPO) shipments to the US Military. "Shipping to the US Military is requires extensive paperwork in comparison to our normal shipping operations," says Howard Tong, Vice President of Newegg.com. "Not many companies provide this service but we feel it's worth the extra effort to support our troops and our nation."
With your box packed, labeled and taped up it's off to shipping and it's in Newegg's shipping that most of the recent controversy has been about. Newegg's default shipping is through UPS, although you can pay extra for FedEx. Newegg used to be a FedEx shop by default, however recently FedEx significantly raised their rates, which Newegg passes directly onto their customers. Newegg claims that the rate hike was an attempt by FedEx to discourage customers from shipping via 3-day air, which loses money for FedEx, and instead choose FedEx ground which is profitable.
However FedEx Ground isn't as good as UPS ground, so the end result is frustrated FedEx 3-day air customers that have to pay more, or customers forced out of pricing to go with UPS, which hasn't always had the best track record. In response to complaints about UPS VP Tong says, "We're serious about providing our customers with the best service. We've taken the criticisms about UPS constructively and have greatly improved the situation. However we're always striving for perfection and always welcome further feedback."
With the truck loaded, it's off to your delivery address. As we mentioned at the start of this article, Newegg's goal is to be able to have your shipment to you within 2 days of ordering it regardless of shipping method. It's not a guarantee, but rather an internal goal that they've been striving for ever since their inception.
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OAKside24 - Wednesday, February 15, 2006 - link
Great Story, y'know we all wanted to know these things and you delivered on getting us Anands behind the scenes at a HUGE distributer and great company, NewEgg.com! Thanks for the awesome article, and OR COURSE the giveaways rock!samduhman - Wednesday, February 15, 2006 - link
Am I the only one that looks at that setup and sees a couple handfuls of employees, because of all the automation, running a co that did 1.3 BILLION in sales last year! Sure its great that my orders are done speedily and accurately but I can't help think that some poor slobs working at Walmart, Foodlion, Best Buy could have had a decent paying warehouse job and Newegg still make a bundle. Maybe Im looking at it wrong...?
Phiro - Wednesday, February 15, 2006 - link
If you think menial jobs should be protected, then by all means make sure your kids make a career out of them.Until then, labor protectionism = bad evil evil.
eastvillager - Wednesday, February 15, 2006 - link
You're looking at it the wrong way. Instead of thinking about the low income, low skilled jobs lost in the warehouse, consider the high income, high skilled jobs gained in the sector that designs, sells, installs, and supports the automation.Smart jobs for smart people is better for the economy than keeping people down at minimum wage in brain-deadening jobs. At least it is in my limited opinion.
Phiro - Wednesday, February 15, 2006 - link
So you *know that to be true? FedEx significantly raised their rates, and you know that Newegg passed it directly onto their customers?
That whole section should be bracketed with a "Newegg alleges that [...]" instead of throwing a "Newegg claims" in the middle of a paragraph.
Also, since Newegg claims they love Anandtech readers and follow what we say? Well, fix your damn web servers! You cleared $1.3B last year and you are still using the same 286 to run your website? You need to fire your web services dudes and bring in trained monkeys; they wouldn't do any better of a job (or worse) but the at-work hijinks would probably be hilarious.
stupid - Wednesday, February 15, 2006 - link
I can't say how I stumbled onto Newegg's site back in 2001, they had really good prices back then, and they still do right now on many of their items. The reviews are pretty helpful too and I read them as well as "professional" reviews for anything that I buy. Professional reviews are great because they give all the technical information and comparisions. User reviews are great because they may give different persective, long term use, and a general understanding if a product is good or not if there are plenty of reviews. However, Newegg does reserve the right to screen reviews and exclude those that mention other competitors, prices, overclocking, etc. Kinda reminds me of China's Firewall policy on "offensive information", but that's a different topic...I have to say though that I was disappointed when they made the switch from FedEx to UPS. Since I live in NYC, both of their pickup points are relatively near where I live. But I feel that FedEx just does a better job at handling packages. People have mentioned that they love UPS because they would leave their package on their doorstep/porch. That actually makes me feel uncomfortable because anyone can just walk by and take it. I live in an apartment build and I've seen quite a few UPS packages just sitting in front of the apartment door. What's gonna stop me from simply taking these packages except my conscious (Damn my conscious)? I don't want hundreds of dollars of merchandise just sitting in front of my door waiting to be taken away. Thankfully though in all the times UPS have tried to deliver packages to me, they never once left it in front of my door.
I can understand why FedEx do not simply leave packages out in the open. It's a matter of liability. Yeah, UPS may 'convienently' leave packages by the door/porch, but what happens if it gets stolen? Newegg's? No, I don't think so. UPS? Yes, 'cause they were dumb enough to leave out in the open. Now you gotta file a claims report, and you'll probably fight the charge on your credit card. The credit card company may successfully force Newegg to give you credit, but if this happens enough times Newegg may increase prices to cover such losses.
FedEx is great, but I hate FedEx Home delivery. I placed an order at Buy.com that offered free ground shipping using FedEx Home. Sounds great, but in the end it was a definite headache. FedEx Home do not deliver to a corporate business addresses (maybe the local mom & pop store) in NYC. After 3 missed deliveries between 9am and 5pm (hey, I gotta earn a living you know) I had to drag my ass from Manahattan, all the way into some obscure customer pickup depot in Brooklyn on a Saturday afternoon to get my package. Fortunately, it was small since I don't own a car.
I hope Newegg can renegotiate a contract with FedEx (and not use FedEx Home), but so far I personally can't complain their use of UPS at this point.
Hopefully I'll win that Athlon X2 contest since I'm about to build a new PC, but knowing my luck I might as well just order it from Newegg of course.
SpaceRanger - Wednesday, February 15, 2006 - link
[quote]Hopefully I'll win that Athlon X2 contest since I'm about to build a new PC, but knowing my luck I might as well just order it from Newegg of course.[/quote]Knowing our luck, one of the noobs that couldn't get the promo link to work in the first place is gonna win it. They'll get their shiny new X2 4600+, and wonder where it will fit inside their Dell XPS 400... /sigh
Junkkyy - Wednesday, February 15, 2006 - link
So how much did Newegg pay you for this advertisment? I sure hope it was a lot.Anand Lal Shimpi - Wednesday, February 15, 2006 - link
AnandTech does not accept any payment for any articles, period. The Newegg article is no exception. I just thought it'd be a cool look at the behind the scenes of one of the most popular and longest running tech etailers. I've toured Newegg in the past, but this time I got them to agree to letting us publish photos for everyone to see. I'm sure Newegg sees it as a PR opportunity, but for us it's simply something neat for the readership, that's all.Take care,
Anand
Junkkyy - Thursday, February 16, 2006 - link
So you were not compensated at all for either an advertisement passed off as an article. Nor were you compensated for them using your celebrity status as a spokesperson in their new banner ads plastered all over your site.I have trouble believing this, but if it is true it just means you were foolish not to negotiate for a suitable spokesperson fee.
Regardless, it's as blatant a conflict of interest as any, and you've lost any shred of credibility because of it. Things were already pretty iffy with paid forum stickies and random embedded article ad-linking, but this takes the cake. I've been reading since the 90s, but you've just lost all credibility in my eyes, and I'll be looking elsewhere for hardware news/discussion now.