Postal Arbitrage

Original Article ↗ Hacker News Discussion ↗

Prime Cost, Marginal Cost, and “Free” Shipping

  • Some argue Prime’s annual fee is a sunk cost for existing subscribers, so using it for “postal arbitrage” has zero marginal cost.
  • Others push back: the $139/year still exists and must be considered if Prime isn’t already justified by normal use.
  • Several note that shipping isn’t actually free: Amazon’s efficiency and bundling hide real per-parcel labor, fuel, and overhead costs that are well above “fractions of a cent.”

Is This Really Arbitrage?

  • Multiple commenters argue this isn’t true arbitrage, just exploiting bundled item+shipping pricing to get a cheaper, lower-quality messaging service than USPS postcards.
  • Some suggest a theoretical business: undercut USPS on letter pricing by relaying messages through ultra-cheap Amazon items, but most think Amazon would quickly shut down systematic abuse.

Practical Limitations and Outdated Examples

  • Many report that the showcased items now:
    • Require minimum basket sizes ($25–$100) for free shipping,
    • Are Amazon Fresh/local delivery only (with service fees),
    • Or are unavailable or repriced after the HN traffic.
  • Several note that the lime example actually carries a $2.99 shipping fee, breaking the premise in their region.

USPS vs. Amazon and Junk Mail

  • Some praise USPS as an extraordinarily cheap national service (e.g., $0.61 postcards across thousands of miles) and prefer to support it over Amazon.
  • Others criticize USPS as a “government spam delivery service” reliant on bulk mail and Amazon last‑mile work, lamenting the lack of robust opt‑out options in the US compared to some European countries.

Environmental and Ethical Concerns

  • A substantial subthread worries about waste: oil for manufacturing and shipping trivial items just to carry a joke or message.
  • Counterpoints: last‑mile car trips to stores can be more carbon‑intensive than consolidated delivery runs; online delivery can reduce emissions in some scenarios.
  • Some see the prank as “funny but sad,” objecting both to plastic trash and to further entrenching Amazon’s dominance and treatment of workers and drivers.

Related Arbitrage and Pricing Oddities

  • Commenters recall historical and modern parallels:
    • Ponzi’s failed postal coupon scheme.
    • DoorDash underpricing pizza deliveries so low that restaurant owners could profit by ordering from themselves.
    • eBay and OLX/Vinted situations where ultra‑cheap, subsidized or mispriced shipping lets people move goods or messages below normal postal rates.
  • Several mention cross‑border postal quirks (e.g., international mail from Korea or China being cheaper than domestic mail elsewhere), suggesting broader systemic pricing distortions.