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Freight Absorption Pricing Definition and Explanation PDF Download

Learn Freight Absorption Pricing definition in marketing with explanation to study “What is Freight-Absorption Pricing”. Study freight absorption pricing explanation with marketing terms to review marketing course for online MBA programs.

Freight Absorption Pricing Definition:

  • A geographical pricing strategy in which the seller absorbs all or part of the freight charges to get the desired business.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong



Freight Absorption Pricing Explanation:

This is an evaluating strategy wherein the maker bears a few or a large portion of the of the cargo or transportation costs associated with shipping the products to the client. Here a maker cites a far off client the plant cost in addition to the cargo cost. Since cargo assimilation helps spread fixed expenses by producing extra clients, this is a decent model for a firm with high fixed cost(s) and low factor costs. It in this manner causes the firm to grow its market a long ways past its typical reach and obtain more clients.

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