The concept of retail has at its basis the presentation of goods or services to a consumer base in the effort to entice the customers to make a purchase. In all the time that capitalism has been in effect, despite its many forms and regulations this basic tenet has not changed. What has made a significant change is the cost related to this shipping of products to retail facilities.
Adjusting the costs for inflation, a gallon of gasoline in 1970 would cost approximately $1.60 compared to its current price of over twice that. But more important than the outright cost of fuel is the inconsistency and inability to control that cost. Unlike most products that adhere to a supply and demand interaction with regard to price, fuel is unique in the introduction of international politics to the equation. In the early 1970s the so called oil crisis was not the result of inadequate supply, but a conscious decision by members of OPEC to reduce production and delivery to the US as punishment for American support to Israel.
But it is not just the cost of petroleum that has made it more expensive to move product from place to place. The cost of packaging, much of it made from petroleum has also increased. We can seen the increase in our supermarkets, the cost of paper bags had always been more than for plastic bags, but that is no longer the case.
We have always had a need to communicate with one another, and in the early going the United States had an expanse that was larger than the young nation could easily handle in terms of staying in touch. The going was rough on a number of terms. The distances were unparalleled, and the exposure to the elements, animals and unfriendly indigenous peoples made cross country delivery a sporting proposition at best.
Cities began receiving free mail delivery in 1828, but those living in rural areas had to either make the long trip into town or pay to have their mail delivered by a private carrier. The oldest agricultural organization in the nation pushed to introduce free delivery to farmers. It took 33 years to come to fruition, but it was established as an official service under President Grover Cleveland in 1891.
The idea of free postal service throughout the United States was egalitarian but in its practical execution it was expensive. There was considerable resistance to the notion for that expense and because the companies that made their living delivering mail to the farmlands believed it would destroy their business, stores in town feared it would reduce the number of visits by rural residents and would therefore decrease their market.
The fairness of the practice belied the cost of delivering the service. Eventually the idea of prepaying for postal service was made compulsory to deal with the expense of making the deliveries. This cost would be amplified as the effort to extend service to the west all the way to California was attacked in earnest. The pony express was probably one of the nations more notable and romantic efforts in the continued work to assure total international package delivery.
In the modern world, anyone thinking about starting up as an entrepreneur had better do their research and cost analysis before they begin. Those that underestimate the expense related to getting whatever their product or service is to the consuming public does so at their peril. Shipping will remain an integral and significant cost to business until we find an alternative to fossil fuels.
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