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What is the Price?

Price is the amount payable in exchange for a good or service. In the e-commerce and shipping ecosystem, prices encompass sub-categories such as net price, discounted price, shipping charge, delivery charge, taxes, etc. Usually, the price for a product in e-commerce comprises the product price, taxes, discounts and delivery fees. On the other hand, the price for shipping goods constitutes first-mile, middle-mile, and last-mile charges, storage and processing fees.

Significance of Price in an E-commerce Shipping and Delivery

Price is inherent in the e-commerce and shipping ecosystem by highlighting the value of a product or a service in payable terms. Here are some added benefits of price in e-commerce:

  • Standardization of the time and effort required to create and deliver a product or service while considering global factors is eased with the help of pricing. 
  • It also ensures that the seller is paid with the right amount of compensation. 

Prerequisites of Price and How It Works

The listed steps below highlight how fees are calculated: 

Price for placing an order with an e-commerce brand: (Listed product price + applicable taxes + delivery charge) – applicable discounts. 

Price for booking a delivery service from a shipping company: (First-mile cost + middle-mile cost+, last-mile cost + processing and storage fees + applicable taxes) – discounts, if any. 

Use Case with Price

A buyer in Davao city added a pair of jeans worth ₱950 to their cart. During checkout, the applicable tax was determined to be 12.5% of the product price, ₱118.75. Furthermore, as the product was to be shipped from Manila city, the delivery charge was quoted to be ₱80.25. Therefore, the price for the pair of jeans was calculated at ₱1,149.

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