What is a basing point pricing system?

A basing point pricing system is a geographic pricing strategy whereby companies determine a fee for a good sold, plus an additional freight charge that is calculated based upon the customer's distance from a starting, or “ basing point .” Buyers located nearer to the basing point pay less for shipping than those based further away.

What is a base point pricing system?

Firms that use the system set the prices of their goods within a given market based on a base price plus a set rate for transportation charges, regardless of how far buyers are from their location. Basing point pricing is a system in which a buyer must pay the price for a product inclusive of freight costs, irrespective of the seller’s location.

What is a basing point?

Typically, the basing point is the same location as the manufacturing point, meaning the shipping charge is determined based upon the customer or delivery location's distance from that point. However, this can become controversial when the basing point is different from the actual location from where the item is shipped.