Why Ronald McRobot Will Soon Serve Us
July 26, 2015
How Much Your Sleep Costs You
July 28, 2015
Sadly, many of us will never be able to pop Bubble Wrap again.
Where are we going? To the cost of free shipping.
Bubble Wrap History
Bubble wrap was not always in a mailing box. First it was textured wallpaper but the idea did not not quite catch on. Then its inventors sold it as insulation but, no success. The third try worked. In 1960, Bubble Wrap’s manufacturer, Sealed Air, convinced IBM that it was ideal packaging material for the computers they were starting to ship. The rest is history.
The Bubble Wrap Demise
A $20 billion business in 2013, for almost 50 years, Bubble Wrap was the ideal protective packaging. But then with the advent of free shipping, Bubble Wrap’s volume, always a positive, suddenly became a problem. Because it occupies too much space in delivery trucks and retailers’ warehouses, Bubble Wrap needed a more cost effective compact alternative. Sealed Air’s solution was iBubble Wrap. Shipped in flat rolls to retailers, unlike Bubble Wrap, it can be inflated in the warehouse. Meanwhile, research continues with mushroom roots and other agricultural byproducts that can conform to the shape of a package.
The following image from WSJ.com says it all. That 47 to 1 ratio will mean a lot of extra space that other items can occupy.
Out Bottom Line: Externalities
Like a free lunch, there is no such thing as free shipping. For some of us, the cost is the POP we will sacrifice when Bubble Wrap disappears. As economists we could say free shipping’s impact on Bubble Wrap is an externality–a cost experienced by third parties who neither manufacture nor purchase Bubble Wrap.
