What Is a Delivered Price?

Malcolm Tatum

Sometimes known as the final price, a delivered price is the total cost to the customer in terms of the purchase price of a product, plus any ancillary costs such as shipping and handling charges, taxes, and any other fees or charges that may be assessed at the time of purchase. Identifying this type of price is often very important, since it involves all the expense associated with making a particular purchase. By knowing the delivered price, it is easier for the buyer to compare pricing from several different sellers and determine which one provides the greatest value in relation to the money spent.

Businessman giving a thumbs-up
Businessman giving a thumbs-up

One of the more common scenarios in which someone obtains a delivered price in advance is with imported goods. Here, the goal is to not only identify the purchase price for the items that will be shipped to the buyer, but also allow for all the related expenses that occur from the time the goods leave the seller’s possession until they are delivered to the buyer. This will often include the purchase price, any carrying charges, transportation costs to the port of origin, the cost of transport using water, rail, road, or air transportation, duties assessed at the port of destination, and any transportation costs from that port to the buyer’s facility.

Determining the delivered price before making a commitment to purchase any product is extremely important. Doing so makes it much easier for a buyer to determine if the total cost of the purchase is actually a good deal, or if it would be more cost-effective to purchase the products from a different seller. This means that if two sellers are offering the same good at the same price, but one is offering free shipping while the other charges a significant amount for the shipping, it may be in the best interests of the buyer to work with the former rather the latter.

It is not unusual for a delivered price to be documented in some sort of contractual arrangement. The terms of the contract will include a breakdown of all the costs associated with the purchase, providing a guarantee that the delivered price will be honored, as long as any exceptions that are noted in the terms of the contract do not occur. This is somewhat different from other types of contracts that may set minimums but allow for the possibility of additional costs due to changes in the shipping process or shifts in the duties charged at the ports of call.

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