Offering "Free" Tax & Shipping

I'm brand new to the world of art shows and curious if anyone has offered a deal involving free shipping and tax on orders placed at art shows. Around my area (metro Chicago) some retailers have begun offering "we pay the tax" sales. Now obviously we all know that the tax and shipping would have to be calculated into the price. Our sales tax around here is about 11% roughly and I estimate most of my shipping charges would be between $7.50 - $50. My questions is if anyone has done this and if so what luck they had with possibly boosting sales. Is this likely to push possible shoppers over the edge into making that purchase? Are buyers going to get confused and just take a pass based on sticker shock? Let me know what you think and thanks in advance for any all input you guys can provide.

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  • My husband and I used to direct people to our website when we didn't have the item in stock (this is for our silkscreened line of clothing) but now we have an order form and close the sale by offering free shipping "as though they purchased it here at the show." If they ordered it from the website they would have to pay shipping. It's definitely helped our sales to do it this way as the customer knows they are getting a deal by ordering right then.

    I personally prefer "buy two get $X off" rather than percentage discounts (and in many places you can't "not" charge sales tax, it depends on the local BOE) as it encourages multiple purchases, though it's not often that I run them. For me it has worked for smaller gift-type items where the total is under $40. Hope this helps!

    • Katie,

      Offering free shipping at a show is great if your product is lightweight and can be shipped relatively inexpensively.  Tile though is heavy to ship, even just 3-4 tiles that are 4"x4" can easily cost $7-10 to ship using Priority at the PO.  I like Priority because it usually has sufficient postage included to cover most orders and it has package tracking as well.  Boxes are included in the price of shipping so I have no additional cost for boxes.

      I do not use any kind of envelopes or any other soft-sided shipping materials because I get concerned about breakage.  Even with the car coasters I do, which are only about 2.5" in diameter and about 3/8" thick, I send them in a box.

      A friend of mine sews beautiful children's clothing and she is able to use the envelopes.  I love the idea but it does not work for me, unfortunately.

  • When first starting out, I had similar ideas... include tax or not?

    When I first started I included tax in the price because it was "easy"... but that's less painful until you write your first check for sales tax and you realize you're literally giving away 6-10% of your PROFIT. Plenty of businesses run on margins smaller than that!

    What I've come to learn is that my customers want quality before price. Price is important, but it's not the most important thing purchasers of my art want. I don't think anyone who buys art actually considers price the most important. Otherwise, they would probably just draw their own mountaintop vista or wear jewelry from Dollar General.\

    But I do want to add an exception... if the majority of your work sells for $5, 10 or 20 dollars then I could see the benefit of including tax because these are typically cash carrying folks and it's easier to handle a line of customers if you don't have to count out nickles and dimes. At that point, the dynamics are a little different, although one would still have to make sure you know your numbers and don't run yourself out of business.

    • My products are lower priced (but still high quality) so I just up my price enough to include tax.  My prices run $10.00 to the $40's.  We do have sales tax in Louisiana at the state level and in most parishes (counties) and towns.  We just had a sales tax increase at the state level bringing it to 4.5%.  Local tax rates start at around 3.5% and up, depending on what town or parish you're in.  So if I figure a price and go up about 10% I usually end up covering the sales tax.

      For example, my coaster sets are priced $28 for a set of 4.  I end up with $25.45 based on allowing 10% tax.  That is about what I want for them before tax so it all works for me.

      I can see how it would be harder for those who sell high end pieces of art, furniture, etc.

    • Thanks for your thoughts on this issue. I believe my lowest price item will likely be $45 or so. With that I have opted not to include tax in my pricing. I figure this will be the easiest way to handle the issue in the long run.
  • When you do a show the customers expect to pay the sales taxes. Only at really low end shows where a majority of exhibitors are hobbyists they don't collect the tax.

    When I had my website, I would make a sale at a show and since I packaged everything with a header with all the information and the website, I would point out to the customer that if they wanted to reorder, "my website is right here and as always, there's no charge for shipping."

    But if I had a web order from someone here in VT I had to add the sales tax.


    Because I  have a "physical presence" here. And when I do shows in other states I have that same "physical presence" because of my booth, so I have to collect the sales tax (If any) in that state.

    • Thanks Chris for the input. I always intended to pay the sales tax to the appropriate taxing body. What I was considering doing was including it in the price listed for the item. I could then tell the client that I was covering the tax on their purchase.
      One thing I don't want to do is to run afoul of any taxing bodies. I've work too hard to build the backside of my business to have the whole thing seized for unpaid taxes.
      • Just be careful. Some states do not allow you to include the tax unless you break down the price on the ticket.

        Let's say you sell an item for $50. In some states you will have to put on the ticket: $47.17+ 6% ($2.83) = $50. To get the original price you divide the $50 by 1.06.

        • Yeah, in those states I'll probably just charge the additional tax and be done with it. Thanks for this info though.
  • We are required to collect tax at the shows we have done.  We have even had the dreaded (state) tax revenuer there at the end of the day to pay up.  At one show some people from the local tax authority were there.  It was voluntary to pay up then, it was more as a convenience so we didn't have to do it later, or worry about forgetting.  This was helpful for me when it was a show in another parish (county).

    I don't add tax to my sales but include it in the price of my items.  At the end of the day I just back out the tax.  It means less hassle having to have coins and so on at shows.  On Etsy almost all of my sales are out of state so I pay no tax on those sales.  I do claim the ones that are in state.  It is too easy to get caught if one doesn't pay up.

    Most shoppers at the shows I go to want something to carry home with them.  Very rarely has anyone asked about shipping.  Most purchases at shows are for things people do not need, it's usually a spur of the moment impulse purchase.  Having to wait for shipment takes some of that impulsivity out of the moment.  I let people know I can do something in customized colors or a truly custom order for them but almost always if they truly want to buy something, they'll find something there in my booth to walk away with.

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