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Test that is the answer!
Or is that removing too much of the psychological effect that you're offering them something positive.
I've given up on being able to automate my shipping. For the kind of orders we have, it's just too complicated. It's big long stuff mixed with little tiny stuff. So it's one of those things where only a human can figure it out and be truly efficient. Otherwise in most cases... I'll lose out, or the customer will.
Strictly from a business perspective, including shipping cost into product price makes it become a profit that you must pay tax on. Whereas a separate shipping charge is a business expense that can be claimed to reduce taxes paid. In most jurisdictions anyway.
For non-defective and defective returns, I only refund the item price minus any shipping costs. However, the issue I see with offering "free shipping" is if I include the shipping cost into the item price I would end up refunding my customer the shipping cost along with the item price.
I could see if somebody wants to take a shot at programing a formula... But for instance... We could have something that goes in a 6x6x70 box. Or have that with something the size of a penny added to it. Or a cable added to it that we could fit, or one that's too long and has to go separate. Or have a 6x6x64 with one item. Or have five of those, but now be in a 10x10x64 that goes over the dimensional weight, recalculating the whole thing. Or add the some small cables to those, or long cables with those that have to go separate. Or 6 of the 70" items that have to be broken into two boxes, two charges. On top of that, we have custom stuff where the dimensions aren't even known until it's made.
You get the idea. Obviously it can be done automatically... But I would bet that no matter what you do, either the customer would end up paying too much, or we would. It might come out in the wash, but how many people are you ticking off in the process. But thinking about it... I don't think the free thing would really work either.
Woah woah woah woah! Woah woah woah woah! This is one of the most incorrect statements I've ever read on these forums.
For me it's not a matter of being a Dudley Do-Right. I'm basing my opinion on the way you worded your statement of..."The prices would have to be raised to cover it"...I understand that as meaning the shipping expense will be integrated [hidden] in the manufacturing expense and added to the retail price. When it comes time to produce the invoice for your book-keeper he/she will see only 1 item on the invoice -- a revenue of some dollars -- he/she will enter it into the ledger as revenue, you pay tax on the hidden shipping plus you've lost the tax credit that you would have otherwise had if it was a separate item on the invoice.
If the customer is paying you for shipping, then you deduct that from your sales total, and claim the rest as your actual income (before deductions). What he's saying is... If the shipping is 'hidden' in the price under the guise of "free shipping", then if you were going to be a Dudley Do-Right about it you should not deduct shipping expenses on your taxes, because technically you were paid for shipping within the price of the items.
[edited by: votrechien at 5:29 pm (utc) on Jul 2, 2011]