When you shop online, nowadays it’s rare to pay for shipping. What used to be a standard fee is now repulsed by shoppers.

People expect “free” shipping when they shop online. Merchants tailor their offerings around this expectation. Amazon Prime charges an annual subscription for free, expedited shipping. Most merchants will include free shipping when you hit a price threshold. Even the most basic Cyber Monday promotion includes free shipping.

But it’s “free”, not free. You pay for it one way or another. Merchants factor that cost into their products. What you actually pay for is a single, blended price that includes the item and shipping combined. Once you get to the final checkout, the only change in price is from the sales tax.

From a buyer’s point of view, this is a huge plus. This blended price makes the final cost more predictable during the shopping process. There are no gotchas.

What’s interesting is how the travel industry often does the opposite of this. They offer an attractive, low rate when you see inventory in a search listings page. Then through various fees, the price is slowly raised as you advance through the buying experience. There could be a “hospitality fee” or a “hotel services fee”, maybe even a “cleaning fee”. People hate this. Just search for Airbnb pricing on Twitter. Some examples:

If retail merchants did this strategy, they could offer a lower price and charge for shipping - per each item too. People would hate that! The buying experience would be so much worse.

If your goal is to create the best customer experience, it’s best to show the final price as early as possible. Kayak actually does this - and this is a reason I use it.

This strategy doesn’t work if you have to hide an inconvenient truth. In the Airbnb example, their product is actually not that cheap compared to hotels anymore - but they need people to keep thinking that. They’ve made that choice for their platform, and feel that it’s worth living with.