I'm not sure why "Lew" responded like he did. I think you are correct. In 
App billing is for digital goods.

As for your question: "What alternatives are available for apps that sell 
physical goods"?

This 
thread<http://stackoverflow.com/questions/9228869/use-in-app-purchase-for-real-goods>
 (it 
was for iPhone, but same question) notes: "PayPal, Amazon Payments, Card.IO 
and ZooZ" have solutions.

You could load a webview to use a web based payment solution instead of 
implementing it in the app as well.

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