To Pick Up or Get Delivered?

When buying goods online or over the phone, how do we decide to either get the items delivered or go to the store directly to pick them up? Everybody will have their own way of managing their time and organising the purchases for their business, but how many of us think about whether it’s the most time and cost effective?

Understanding this concept is a fundamental principle in economics known as opportunity costs, ‘the alternative given up when a decision is made’. In other words, choosing to pick up your items from the store means you’ve foregone the alternative to get them delivered and saved yourself some money on freight. Obviously this isn’t anything new but is interesting and a very popular option. UPS conducted a survey of over 3,000 people in 2013 and when asked how they would choose to shop with a retailer if given the option, 44% of respondents answered ‘order online and pick up in-store’.

So why does this matter and why am I writing about it?

Opportunity costs do not just relate to the amount of money you can save on freight, but the entire time it would take to pick up the goods and everything else you could do instead. For instance, say you need to drive 15kms to get to the store, go inside and collect the goods and then drive the 15kms back to the business.  Depending on the time of the day this could take anywhere from 60 minutes to an hour and a half. So you ask the question “what else could I have been doing?”. Or, what might you be forgoing in order to get those items. Maybe it would be more efficient to:

  • Work on more customer orders?
  • Call debtors that are late with their payments?
  • Make some business development calls/emails?
  • Work on social media posts to increase your brands awareness?
  • Finish any laborious chores that have been neglected?

Anyone of these may be far more valuable than the $10-$15 delivery fee. You may happen to remind that debtor to pay his bill, you may get a new sale worth more than $10 or you could have uploaded a social media post and been seen by thousands of people. Maybe this might be something that crosses your mind upon your next purchase….

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