What Is A Handling Fee?
A handling fee is charged on top of a customer's subtotal and shipping costs. It costs money to fulfill orders, from warehouse storage to packaging costs and the cost of shipping. Handling fees are charged by the order, not based on the individual products within the order.
You may also charge for shipping within a handling fee. Though this will increase the cost and may make shopping with you seem more expensive than shopping with your competitors. Some businesses choose to factor packaging materials in with the ship and handle fees.
Read more: What is a Handling Fee?
How To Calculate The Handling Fee
How do you calculate shipping and handling fees? You can choose to use a shipping and handling costs calculator or calculate it manually with our formula below:
To calculate handling charges, using the formula. First, calculate the average number of minutes to pack an order. Divide this by 60 and multiply it by your team's hourly rate.
For example, 15 minutes / 60 = 0.25; 0.25 x 20 per hour = 5.00
A handling fee of 5 covers the cost of what it takes to package an item.
Or you can use the above handling fee calculator to determine your shipping and handling costs. It will calculate shipping and handling fee for you, saving you time, energy, and headaches. Your shipping fees depend on which service you use, but also on dimensions, weight, speed, and delivery distance.
How To Use The Handling Fee Calculator
You don't need to struggle with a formula to calculate shipping and handling. That's time you could have spent on aspects of your business that are important to you. Instead, you can use our handy calculator to do the math for you.
To use the calculator, you need to first determine how long it takes to prepare a package. Once you have this figure you can input it into the calculator along with the hourly rate you pay your employees. The calculator will provide you with your opportunity cost, which is what you charge as a handling fee.
How QuickBooks can help
Managing your inventory is crucial to running a successful business, and you can make that easier with QuickBooks inventory management software. It removes the guesswork and manual calculations from the process and can be used to save you time and improve your bottom line. Visit our pricing page to get started with a 30-day free trial on inventory management software.
Visit our free tools and templates hub to find more free assets that can help you run and grow your business.
