Shipping and Fees
The simplified business model provides potentially lower costs or higher profit margins for remote vendors. The 'up front pricing' model attracts customers with low up-front prices reflecting the lower cost of goods to the vendor with less overhead. The vendor would then add the cost of shipping, and any other applicable fees to the order before processing. Since the vendor typically makes the shipping arrangements, it is entirely possible that the cost of shipping passed on to the consumer will not be the same as the cost of shipping borne by the vendor. Some online vendors use this as a source of revenue, further increasing profits or allowing the vendor to advertise even lower up-front prices. (The classic joke here is the "free car" worth $20,000 that has a $30,000 shipping and handling fee)
Read more about this topic: Free Shipping
Famous quotes containing the word shipping:
“I need not tell you of the inadequacy of the American shipping marine on the Pacific Coast.... For this reason it seems to me that there is no subject to which Congress can better devote its attention in the coming session than the passage of a bill which shall encourage our merchant marine in such a way as to establish American lines directly between New York and the eastern ports and South American ports, and both our Pacific Coast ports and the Orient and the Philippines.”
—William Howard Taft (1857–1930)