How to Figure Freight Percentage

Many businesses lose money by paying too much for shipping.

When purchasing supplies for your business, one of the most costly items can be shipping charges. If you calculate your freight percentages, you can see what percent of each purchase you has goes to shipping. This is a cost you can control by negotiating better shipping rates with different companies. Places like UPS and FedEx will provide better shipping rates for you if you have many shipments to and from your place of business.

Instructions

1. Determine the total cost of the purchase or sale. For example, assume your purchase or sale costs $500.

2. Determine the cost for shipping. In the example, assume the cost of shipping was $25 of the $500.

3. Divide the cost of shipping by the total cost of the purchase or sale. In the example, $25 divided by $500 equals 0.05 or 5% freight percentage.

References

• Math Is Fun: Introduction to Percentages