How to Determine Shipping & Handling Charges

Delivery

Running a business that ships out goods to customers means that you must determine shipping and handling costs. If you don't calculate these costs effectively, you could lose money by shipping goods. There are multiple factors that you need to consider in order to ensure that you don't lose money, as well as if you plan to make a profit from shipping.

Things You'll Need

• Calculator

Instructions

1. Figure your costs for packaging an item. This includes materials and labor.

2. Consider the weight of the item. You may want to charge a standard fee per pound (such as 50 cents per pound).

3. Compare your estimates from step two with websites, such as the ones in the Resources section, to see what major delivery agencies actually charge for various mailing options.

4. Consider time and potential mileage involved in transporting the item to the post office or delivery pick-up site.

5. Add on a standard handling charge if you are considering making a small profit on shipping the item. After all, you are providing a service by giving the customer the convenience of receiving the item at his home.

6. Check other businesses in order to compare your charges with theirs. If a company like Amazon offers much cheaper shipping than you do, you may not sell as many products.

References

• Power Home Biz: How To Calculate Your Shipping and Handling Charges
• Practical Ecommerce: The Free Shipping Equation

Resources

• UPS: Calculate Time and Cost
• US Postal Service: Prices