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See " What Does It Cost to Sell on eBay?" and " What Does It Cost to Sell on Amazon?" for detailed explorations of the full cost of selling on those marketplaces. I now know that shipping and handling will cost me $11.50, and can decide how much to charge my customers from that number.
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The item fits in a small box, so my packaging costs should only be about $1.00 each time.Īfter testing a few different ZIP codes on the eBay shipping calculator, I determined that I can usually ship this item to most customers in the US for about $8.00. It takes my employees an average of 15 minutes to review an order, pick and pack the item, address the package, and send it out. This is your total shipping and handling cost before fees, taxes, etc. What is the shipping and handling total?Īdd up lines 1 through 3. You can use this number as a guideline when setting a fixed shipping price or simply as an estimate of calculated shipping costs.Ĥ. This will simulate eBay’s calculated shipping and similar systems. Enter the weight and dimensions of your package, then run a few tests using different destinations. Use the appropriate shipping calculator to determine the average cost of shipping to your customers. You can create an accurate estimate with the resources in our eBay and Amazon Packaging Costs article, or just enter $1.00 as a rough estimate if you’re only sending small packages. Remember, if you don’t have employees, use whatever you see as your minimum acceptable hourly income as the hourly rate.ĭetermine how much you’ll spend on packaging (boxes, cushioning, tape, etc.) and enter that amount here. Use the formula from earlier to determine your handling cost per item: Then answer the following questions to determine the cost of S&H for any item in your inventory:
Usps pricing estimate how to#
Now that you have all the knowledge you need, here’s how to calculate shipping and handling.įirst, open a spreadsheet or grab a sheet of paper and number lines 1 through 4. Use it as your handling cost when calculating S&H. The result is your “opportunity cost”-the time you could have spent doing other things that would make money. Finally, complete the same formula from above: Then set the minimum amount you’re willing to earn per hour while preparing and shipping items-that’s your hourly rate. But if you have to spend 20 minutes preparing it for shipping, you’re making just $7.50 per hour-minus the value of the time you spent identifying the item, buying it, and creating the listing!įind out how long it takes you to prepare an order for delivery. When you first start selling online, you may see that you can sell an item for a $2.50 profit and think hey, that’s worth doing. If you work alone, you might think you have no handling costs. If you have employees, then you have to multiply how long it takes them to prepare each item for shipping by how much you’re paying per hour.
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To find out how to create an accurate estimate of your packaging costs, see " eBay and Amazon Packaging Costs: What to Budget." Also check out our article on the USPS free boxes program to see if it can save you money on packaging. If you’re sending something in a box, it could cost you anywhere from $0.75 to well over $5.00. If you’re sending something small in a padded envelope, you shouldn’t have to pay more than $0.50. It’s generally safe to budget $1.00 for packaging if you’re using small boxes. To determine the true shipping and handling costs for an item, you need to add up three things: Otherwise you’ll charge too much or too little, and your sales or profits will tank accordingly. If you want to be competitive, particularly on online marketplaces like Amazon and eBay, you need a firm understanding of how to calculate shipping and handling. It’s tempting to just charge $4.99 on everything and call it a day. Shipping and handling costs can seem like a real mystery when you first start selling long-distance.
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