Shipping and Handling
Shipping and Handling is the process of packaging and sending something to a customer. When a mail order is placed, a shipping and handling charge is often assessed to cover the packing and postage or shipping charges for getting the item to you. There is frequently a minimum charge that is the least you will pay for shipping and handling on small orders. If the order is more than the minimum, a shipping and handling charge is calculated as a percent of the total purchase price.
Shipping and handling fees are a combination of the charges required to pay for shipping something and the labor involved in preparing those items for shipping. The handling portion has the most variance in price, while shipping items tend to be about the same price for similar size weight items. Consumers will pay the same price for shipping whether something is sent from the post office or from another company. Ideally, a handling charge is charged on a per item basis to specifically pay for those expenses required to handle and/or pack and ship the item. This can include shipping materials (boxes, labels, tape, bubble wrap, packing peanuts) as well as any additional services required such as delivery and/or signature confirmation.
Shipping and handling costs can seem like a real mystery when you first start selling long-distance. It’s tempting to just charge an amount for everything and call it a day.
To determine the true shipping and handling costs for an item, you need to add up three things:
If the order is below the minimum, the minimum charge will apply. If the order is larger, the shipping and handling charge is a certain percent of the purchase price. For example, if there is a minimum charge of $2.00 on orders less than $20.00 or 10% of the total order price, and your order is $35.00, the shipping and handling would be $35.00*10/100=$3.50. You would not pay the minimum charge because your order was more than $20.00. Your total cost would be $35.00+$3.50=$38.50.
When a person orders something, especially from television or the Internet, he is often assessed shipping and handling fees. It may be hard to tell exactly how much a shopper is being charged by a company to “handle” a package. Occasionally, these charges will be itemized on the invoice or the shipping label may state the shipping cost. In some cases, the handling cost is quite a bit more than shipping.