How Do You Figure Shipping and Handling?


Quick Answer

To figure shipping and handling costs, divide the total monthly warehousing costs for inventory by the number of items shipped, and then add the actual shipping price payable to the shipper used. Look up actual shipping costs using the shipping rate cost sheets released by the various shippers. The cost of shipping is largely dependent on distance shipped and weight of package.

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How Do You Figure Shipping and Handling?
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Full Answer

According to Practical Ecommerce, shipping rates are usually set by zones, with each zone representing a specific region. To determine rates using a shipping price guide, the shipper must first weigh the package and then choose a shipping method, such as ground shipping or air freight. The shipper can then look up the shipping zone, the package weight and the shipping method to get the exact price. Each shipping method is likely to have a separate price guide.

Several additional factors other than package weight, distance shipped and shipping method can affect the overall shipping price that a business incurs. Practical Ecommerce lists factors such as added fees for shipping to residential units, fees for picking up a package rather than having it mailed from an authorized location and costs involved with confirming a delivery. Shipping insurance is usually an additional expense.

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