Last week, I blogged about Shipping Charges – Flat Rate or Calculated Fees. If you use flat rate or a real time shipping calculator, how do you know if you’re charging enough? If you’re using a drop shipper, how do you know if you’re covering the shipping costs they’re charging you? (Drop shippers often pad shipping charges to help make up for their drop shipping expenses).
You could micro-manage it and look at each and every transaction to see how much you charged the customer versus how much you actually spent. But of course, micro-managing takes up time and in this case would probably be a never ending time eater.
Look to your accounting software. We use QuickBooks for our accounting software and we set up 2 accounts for shipping. One is for the amounts we charge to customers and the second is for what we actually pay for shipping to our drop ship vendors and for our eBay shipments. At the end of each quarter, we can compare the two to make sure they’re reasonably aligned. And we can tweak our shipping charges to make up for any major variances.
What about you? Do you have tips for managing your shipping charges?