How inclusive pricing works

Retain control over your inclusive prices while Zonos takes care of the calculations and the risk. Use our calculated inclusive price or modify it; either way, our calculations will be transparent and guaranteed. With Zonos, you have the flexibility to choose the countries you offer inclusive pricing to and adjust pricing as needed.

When deciding on the prices for your products, it is crucial to find the right balance between making them attractive to buyers and ensuring profitability for your business. To achieve this balance, it is essential to have a clear understanding of where your costs are allocated. With Zonos, you have full visibility into how each inclusive product price is calculated and reconciled.

Inclusive pricing calculations 

Since inclusive product prices are calculated and displayed on your website before any items are added to the cart, the exact order total remains unknown. As a result, we assume each order will exceed the de minimis threshold for both duty and tax. However, if your order history shows that most of your orders fall below this threshold, we adjust our calculations accordingly.

Zonos utilizes historical averages to predict import costs at the item level before an order is created. This method enables us to estimate costs such as taxes and carrier fees, even when exact details are not yet available.

For example, while taxes are often due on shipping costs, the exact amount is typically unknown until checkout. By analyzing historical data, we can estimate expected shipping costs and calculate taxes accordingly. For instance, if your average order consists of two items and $10 in shipping costs, we would allocate $5 per item for shipping and calculate VAT based on that amount, which would then be included in the product price.

Similarly, we estimate carrier fees at the item level using historical data. Although carrier fees are generally applied once at the order level, we distribute these fees proportionately across items based on the average number of items per order.

If you don’t have an order history, we assume an average of one item per order. Some costs, like the $2 landed cost guarantee fee, are applied per order. Without historical data, these costs might be duplicated across multiple items in a single order. Having an order history allows us to more accurately estimate the typical number of items per order, helping allocate costs more precisely and saving your shoppers money.

Including duties, taxes, and fees 

When setting up inclusive pricing, you have the flexibility to choose which components (duties, taxes, and/or fees) to include in the product price. Different countries have varying expectations for what should be included in the inclusive price. For instance, some countries may only expect taxes in their prices, while others may have different de minimis thresholds for duties and taxes, influencing what you might want to include or exclude in your pricing.

Setup flexibility: Currently, you can select these components during the initial setup process, and the same selection will apply to all countries. While this provides a consistent approach, we understand that needs may vary by country. In future updates, you will have the ability to include or exclude components at the country-specific level.

Post-setup changes: If you need to modify these settings after the initial setup, reach out to support, and we can assist in making the necessary adjustments to your inclusive pricing setup.

Discounted product prices 

Inclusive pricing allows discounts to be applied at the time of checkout. We apply discounts to the item, duty, and tax portions of the inclusive price. However, fees, which are typically fixed amounts, cannot be discounted like other components. You will be billed for the full amount of any fees.

When a discount is applied, it is proportionally allocated across the item price, duties, and taxes. The inclusive price will be adjusted accordingly, ensuring transparency and accuracy in your final billing.

Shopify plan limitations: Full discount functionality is only supported on Shopify Plus. On Shopify Basic and Advanced, third-party apps like Zonos cannot control the checkout process, limiting our ability to apply discounts to duties and taxes unless both are included in the inclusive price.

For instance, if you include only taxes in your inclusive price, we can apply the discount to the item price and pre-calculated taxes, but not to duties, as they are calculated at checkout. However, if both duties and taxes are included in the inclusive price, we can apply discounts accurately to all components. Any components not included in the inclusive price will be billed in full.

Example: Consider an order to the UK with a value of €150 and a 3% duty rate, resulting in €4.50 in duties. With a 20% discount, the reduction on duties would be just €0.90—a minimal amount that is unlikely to significantly impact the overall discount for either the shopper or the merchant.

Recommended rounding 

By default, inclusive prices are rounded after calculation to create prices that are more appealing to shoppers. Inclusive pricing calculations typically result in inconsistent price endings that don't align with shopper preferences. To address this, country-based recommended roundings are integrated into inclusive pricing. You can choose to apply these predefined country-specific roundings based on your display currency. These country-specific rounding rules are predefined and automatically applied based on the selected currency and destination.

Note that the merchant retains all the rounded cents resulting from this process.

Cancellations and refunds 

Before an order has shipped: If you choose to cancel an order and refund it, we will refund the landed costs that were included in the product price. If you remove an item from an order, we will refund you the landed cost attributed for that item.

After an order has shipped: Duties and taxes are due once the package reaches Customs. At this point, the carrier will pay the landed costs and invoice Zonos for them. Because of this, Zonos will not refund the associated landed costs for items removed after an order ships, or for orders canceled after an order ships.