Forums: Discussions for entrepreneurs and small business.

Hi SuN Members...

I need your advice on how to charge for shipping costs to wholesale customers.

I know I charge a shipping and handling charge for my own customers. But for the wholesale customers, do we only charge the actual shipping costs? OR can we also charge a handling fee along with the shipping costs?

So, to give you an example, I will ship the order via Global Priority. The actual cost is $16.00.  So do I just charge the wholesaler $16.00?  If I were to include handling, what would be a reasonable handling charge be? 

Since this is my very first wholesale order, I don`t know the rules.  I tried searching for the answer from the forums, but couldn`t find the answer.  So, any help on this matter would be greatly appreciated.

Sincerely,

Jeannie

 

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Jeannie,

On your price sheet that goes to wholesalers, you can include terms.  In these terms you can have freight conditions, I do freight prepaid on orders of $2000.00 or maybe $1000.00 for certain companies depending on our relationships.  You can make that condition any amount you are comfortable with.  If these customers do not meet your minimum freight requirements, you are free to charge them what you want, but you don`t want to get out of hand or you will lose that customer for following orders. 

Hope this helps!

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Trent Rousey
President - 3R Products, Inc.

Hi Trent,

I understand that I can include freight conditions on the price sheet.  Since one of your conditions is freight prepaid on orders of $2000 or $1000, what other freight conditions are there?

A list of examples would be very helpful. That way, I can get an idea of what to charge wholesalers. 

But for the majority, is it a rule of thumb just to charge the actual cost for shipping to wholesalers?

Thanks for your help in advance!

Jeannie

 

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Hi Jeannie,

I`m going through the shipping charge calculations right now for my game.  I`m using a warehouse/fulfillment center to move the games to retailers.  If you`re doing your own fulfillment, I would definitely charge for storage & handling. 

To give you an example, and maybe a starting point for your product, here`s what I`m paying.  For each game (measures 6"x6"x6"), I`m paying $.07 for storage and $.20 for fulfillment (putting the game in the shipping box, taping it up & slapping a shipping label on it).  So I just add $.27/per unit to my final shipping costs to the retailer. 

I don`t have any plans to pad that number, but I`m new at this too ... so I would also like to hear from any seasoned SUN members out there who could offer up some words of wisdom!

Mary Kay 

 

Dear Mary Kay and Nevadascul,

Thank you both for you kind input. I really appreciate knowing what others are doing. Thanks for teaching me!

Sincerely,

Jeannie

 

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My thoughts are that you should look at everything as a revenue center if possible. But you have to be proportionate and reasonable. So if your wholesale cost is a percentage of your retail cost to customers you should look at handling the same way. I would pass through the shipping costs plus a small flat handling charge for your time and any special shipping packaging to ship the product. That handling charge is only for your time and effort to send it. The cost of packaging etc not related to shipping should be built in on your wholesale pricing, i.e. the cost of the bulk mail box etc should be a packaging cost not a shipping cost because regardless of where it goes or if it is picked up or delivered that package would be the same but if shipping requires a second outer box then that should be part of that shipping cost. To me the shipping and handling should be only related costs to getting the product to the customer that is non standard to your regular production packaging for wholesale.

Another thought...when your customer sells the item they are going to calculate their price point and margin based on their total acquisition cost so you may want to keep that in mind and work backwards from that number to make sure you end up giving them a palatable cost per unit to move your stuff. That is just my .02 cents.  

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Chit Chat and Chew is reconnecting families and changing lives. Visit us online at www.chitchatandchew.com

Jeannie,  I am sorry it took me so long to get back to this.  I am in agreement with Netmom, where everything that you do to get your product out is a source of revenue.  I charge a very minimul handling charge on top of actual freight, by very minimul I mean an extra $1.50 - $2.00, this is where you can make up what you have lost selling to a WD, rather than your regular Jobber.  The distributor will expect this in most cases.

Sorry again that I did not check this sooner.

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Trent Rousey
President - 3R Products, Inc.

Dear Netmom and Trent,

Thank you very much for your great advice. It`s shed some light on my problem for sure!

And Trent, no need to apologize. I`m very thankful for your replies.

Jeannie

 

 

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I myself have opted to include S & H in the price of $2.00 as merchandise is being drop shipped from India for all items, even wholesale. and it can be a bit high.  Since the products are 95% Vegan and 100% Organic by my specifications it is worth it.  I decided it was less of a headache that way.