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When You Should Charge Separately

Experts tackle the question of when distributors should unbundle pricing

July 10, 2011

Many distributors are wary of charging separately for items such as delivery, small orders or fuel, but experts say that if it’s done correctly, what’s known as price partitioning can be a successful (and even accepted) part of a distributor pricing strategy.

Consumers have long been used to the idea of price partitioning – what the authors of a recent article in the MIT Sloan Management Review called the practice of charging separately for such things as shipping, installation, checked baggage or tire disposal.

The concept is gaining traction among distributors ...

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