Do You Charge For Your Customers For Shipping Supplies?

You think all the hard work is over once you price your product, then you realize you have to pay for the boxes and the  padding that you ship all your fabulous product in.

How do you allow for that in your pricing?

There are a few ways you can do the figuring and any of them are perfectly acceptable.

BOX SIZES:
First of all, how are you shipping? Carrying multiple sizes of boxes can be tedious and space hogging. My recommendation would be to take a look at your product minimum, the average items and quantities ordered.

For example: An average order may be 36 bottles (lotions/washes), 24 body butters, 12 body polishes, 12 Travel Packs and 4 Testers.

Get these items together and start mocking up your packing and measuring different scenarios.

You have to think about weight of the box for easy handling, which items pack best together and what size boxes will work best in almost every instance ( due to order/product variance).

You’ll have the odd packed box every now and then, but for the most part, you want to have 2 inches of space around the edge of the box and from the top. You also want to have the least amount of padding/peanuts, etc. that is acceptable in order for the items to fit and ship snugly and safely.

If you have an odd size item that is 9 inches tall when all your other items are 6 inches tall, you don’t want to have to order all 11 inch tall boxes for that one item. That’s a lot of peanuts on top of the shorter items. Also, every retailer may not order the tall item. So the best thing is to allow for a box that will be best suited for tall item by itself. This would also apply to more fragile items that would be best shipped by themselves.

Once you have mocked up your shipment you can start fooling around with inner and outer box sizes.

You’ll need the outer boxes to be 1 inch taller and wider than the total measurement of the inner boxes in order for them to fit inside each other. Your outer box may have to be a bit larger than this- but not smaller.

This exercise takes a bit of time and patience. I would recommend getting a catalog from one of the shipping suppliers. I use Uline. You can then have all the dimensions of the available boxes in front of you while you are working all this out.

Sometimes you’ll be tempted to get a certain size box because it’s cheap and you could make it fit if you added a lot of padding. Well, padding, like peanuts, cost money too, so I usually opt for the box that will seem like it’s been as custom fit as possible for my products.

At this point, I use 1 size inner, 1 size outer and 2 specialty boxes. The outer boxes and the specialty boxes are similar in dimension, so it makes packing out and stacking easy.

I also have 2 smaller sizes for online orders.

Now, how to charge for these boxes.

PER PRODUCT:
The first thought you  have is probably to add a charge to be included in the wholesale cost per product. But that’s kind of hard because your products are all shapes and sizes. Here are 2 ways to look at that cost.

Pre-Packs:
Do you have pre-packed boxes for each of your products?
For instance, your minimums on lotions are 12 bottles and you have a box that holds 12 bottles. The cost of the box is $1.00 plus about 3 cents for the shipping you paid to get it. So,  $1.03 /12 = 8¢ per bottle.

Do you use inner and outer boxes? If you pack 2 or 4 inner boxes to an outer box, then you also have to figure in the outer box.

Let’s say 2 inner boxes to 1 outer box. The outer box is $1.58 / 2 (inner boxes) = 79¢ cents.
79¢ / 12 = 6 ¢.

So now you have 6 more cents to add to each product. That’s 15¢ a bottle.

Loose Pack:
This makes things more difficult because you never really know what or how many will go into each box. After shipping and packing for a awhile, you have a pretty good idea of what and where items will fit.

Your box will fit 12 bottles , 6 soaps and 24 lip balms. That is 42 items. Box is $1.23. That is 3 cents added to each item. Do the math again if you do inner and outer boxes.

The 3 cents may sound cheaper per item, but remember, depending on your order size and items ordered, you are never really sure how many boxes each order will take. You may have 12 more bottles that you need to pack and only have the  one box size, so the price per item for that box it 10¢.

This will get very confusing and erratic in figuring out the charges.

*You may decide to have just single boxes- no inner and outer boxes. This usually adds up to more individual boxes which cost more to ship. I’ve ship more confidently and efficiently with inner and outer boxes. I can ensure they have adequate padding and taping to get to their destination safely.

AVERAGE ORDER SIZE:
Your average order is $500.00. It takes about 8 inner boxes at 89¢ per box and 4 outer boxes at $1.21.

Again- the average order may be 36 bottles (lotions/washes), 24 body butters, 12 body polishes, 12 Travel Packs and 4 Testers.

That’s about $12.00 in boxes. $12. / 88 = .13 per product.

ACTUAL BOX COST:
This is easy and seemingly the most straight forward.
The order is $660.,
13 boxes for a total of 13.25 on boxes
$48, Actual Shipping

Invoice says:
$660 for product
$61.25 Shipping ( maybe have it read “Shipping & Handling”)

Now, with this said, sometimes you get a retailer that directs you to use their UPS or Fed-Ex account number. In that case, they’ll be charged the actual shipping charges. You can still add “Handling” charges or elect not to worry about it, as it doesn’t really happen that often.

FLAT FEE:
You may also decide to have a flat fee you charge for each order to help with the shipping charges.
Let’s say $5.00 – $10.00 per order.

The object is not to have this be a profit center, although many companies do try and make a profit here. I don’t think that’s a good idea.

I’m willing to write some of shipping costs off in my profit margin, but not all of it.
Being a small Biz makes it difficult to allow for per product shipping charges due to variance in product and order size and recover the % of cost you want.

Whatever you decide, I hope this information helps you  out a bit.

Do you have a different thought? Let me know. I’d love to hear it!