Incorporate shipping in product price, or not?

January 28, 2008 11:14 AM

I am soon opening a store selling backyard items, and wonder what would be best to do for shipping charges. Should I incorporate the shipping into the item price, or not?

What are the pros and cons of each of the two methods? If you know where I can find data about the efficiency of either one of the methods, that would also be very helpful.

The shipping charges will be from $10 to hundreds, depending on the item.

posted by adriana to shopping (7 comments total)

The main advantage of including the shipping cost is that people know what it's going to cost them in total. There's nothing more frustrating than not finding out until you've already entered your address and credit card that it will cost way more than you thought.

But including shipping in the price is not the only way to do this. You can, for example, include a shipping calculator or allow the user to enter their postal code so that the shopping cart will show the correct shipping cost as they shop and as they add more things to their cart (before they enter any other identifying information).

Especially for large or heavy items, including shipping in the price can be tricky. For example, in North America, shipping from the coast-to-coast can cost several times what it costs to ship locally. For items like assembled furniture, shipping coast-to-coast might cost far more than the price of the item.

I'd say that as long as you make it easy to find out what it will actually cost in total, you don't need to include the shipping in the cost of the item. And there have been studies done (can't find a citation right now) that shows that not including shipping will improve your sales (e.g. people are more likely to buy if the price is $80 plus $20 shipping than if the price is $100 including shipping).
posted by winston at 11:33 AM on January 28, 2008 [1 favorite]

Which state/country are you in? In the US, some states exempt shipping charges from sales tax, which would otherwise add up to quite a bit of money on a shipping charge that goes into the hundreds.

Also, if you have an item+shipping listed as one total, than you would have to calculate the total based on the furthest distance the item is likely to ship, which would likely bump your total up.

Both of the above might make your prices higher than your competitors. Anecdotally, a significant part of my decisions on which online vendor to choose are based upon price; I suspect I'm not alone.
posted by jamaro at 11:36 AM on January 28, 2008

what is a "backyard item"
posted by Salvatorparadise at 12:09 PM on January 28, 2008

i would not include shipping in the price. i'd do as winston suggests above. in fact those are the types of vendors i like to buy from: ones that specify, in an easy-to-find place both their cost for and method of shipping.

also, if shipping is rolled in, i assume you are screwing me and pocketing the difference between actual and charged amounts.

i believe backyard items means grills and lawn furniture and stuff.
posted by misanthropicsarah at 1:22 PM on January 28, 2008

I keep shipping costs out of my product prices.

Since most retailers don't incorporate shipping into the item price, your average consumer will see a price and immediately assume it's the base price. Adding shipping onto that will not only be a needless deviation from the norm but will likely confuse customers into thinking that something's more expensive than it actually is.

From another perspective, a price should represent only the value of that item, and any additional costs are just that -- additional. Convince the customer that Widget X is worth Y dollars and (hopefully) they'll convince themselves to pay for the shipping afterward.

Obviously, you shouldn't surprise your customers either. Your best bet is to either put the shipping price on the product page, or at the very least a link to where shipping rates can be calculated.
posted by Smallpox at 1:40 PM on January 28, 2008

Thanks everyone, it looks almost unanimous that I should keep the shipping price separate, so I'll do that.

Salvatoreparadise, a backyard item is what misanthropicsarah said: gardening tools, lawn furniture, etc.
posted by adriana at 1:58 PM on January 28, 2008

HousingWorks handles it this way, "Shipping via Moving Company Only" and then saying "SuperFast Shipping - NYC ONLY!!!

This item is available for shipping via our preferred moving company SuperFast. If you win the item you will have the option of having it shipped directly to you without having to go into the store. After your item is paid for SuperFast will contact you to schedule delivery. All shipping costs on this item must be negotiated with SuperFast.

If you're interested in getting a quote please call 212-693-0770, and tell them you're interested in item number 19688
Outside of NYC??

We are willing to work with any mover you want to use, our only requirement is that the item be removed from the store within 48 hours. All arrangements and costs are up to you, faliure to remove item from store within 48 hours will result in the item being resold without a refund.

Many of our previous customers have recommended, Vanlines.com
posted by nickyskye at 9:26 PM on January 28, 2008