>adding a bunch of additional fees [...] just makes me feel like I'm being nickel-and-dimed.
On the other hand, when I know the shipping costs are included in the price, it makes me feel like I'm being gouged on larger orders where the shipping cost per item should be lower.
That's what Jet.com tries to solve. Initially the prices you see have built in shipping (although $35 minimum), but as you spend more they give you discounts inline with their savings.
Jet.com isn't perfect but they're trying some interesting stuff with pricing (e.g. pay more for included returns, or pay less but have to pay shipping if you return, buy items in bulk and get a discount, etc).
The idea and the promise of Jet was great, the initial implementation from both the vendor and consumer points of view were a complete train wreck that turned me away from the site. Not sure that there's going to be much left after the Walmart acquisition?
A lot of the site has changed since launch, I'd encourage you to give it another look. And don't worry, Jet's dynamic pricing isn't going anywhere. In fact, you should expect Walmart.com to adopt it at some point in the future.
Full disclosure: I work at Jet on the pricing team.
A company I worked for actually sort of made up their shipping prices whole cloth. They had contracts with the shipping companies to get a good deal on shipping, and rarely passed those savings on. So most cases, they charged more than they were paying to ship your product, and in a few cases they charged less. So, the majority were subsidizing shipping costs for a few, with a hefty profit bump for the company. But I don't think they had any real competition, so I guess they could just charge whatever they thought people would pay. They even operated multiple brands for the same exact products/services, just to offer different prices and advertise from a different angle.
So, back to the point, regardless of whether the price is broken out or bundled, there's really no way to tell how badly you're being gouged. Unless you can find it cheaper someplace else, the only question is whether it is worth it to you at that price.
If I recall this is largely why eBay started charging the seller fees on the shipping cost (boy was that a loophole) and then heavily pushed sellers to move to free shipping.
On the flip side, as an eBay seller it's kind of painful to know that if I sell something for $X, shipping is eating $3+ of that - on top of the 10% cut for eBay and the 2% for PayPal. It makes it not worthwhile to me to list anything below $10.
In Australia it is pretty easy to get a feel for what low volume retailers are paying, eBay sellers will usually charge about $7 for an auspost parcel under 500g. A little above the rate for sending to the same capital city or other major cities, below the rate of seinding the most other places.
So a retailer with a bulk discount can probably get away with that rate, much higher than around $8 though and people would know it isn't a real rate.
> They had contracts with the shipping companies to get a good deal on shipping, and rarely passed those savings on. So most cases, they charged more than they were paying to ship your product, and in a few cases they charged less.
I'd wager this is true of 85% of companies when it comes to cost savings.
Yeah and you are subsidizing places that cost more to ship to, and depending on the average basket size of the shop you are likely paying for shipping for each item individually. Often shipping rates include a flat per package fee with a smaller weight component, so a real rate for multiple items would be much cheaper than the combined built in.
Still as a psychological thing I think customers just prefer to see free and don't think too much about how it could be costing them more. Most of our shipping is free because it seems to give better results, even if the customer ends up paying more in some cases.
On the other hand, when I know the shipping costs are included in the price, it makes me feel like I'm being gouged on larger orders where the shipping cost per item should be lower.