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What do I charge wholesale customers for shipping?

JeannieJeannie Posts: 8subscriber
edited July 2007 in Sales
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
 

Comments

  • GetAGripGetAGrip Posts: 14subscriber
    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!
  • JeannieJeannie Posts: 8subscriber
    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
     
  • JeannieJeannie Posts: 8subscriber
    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
     
  • NetmomNetmom Posts: 5subscriber
    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.  
  • GetAGripGetAGrip Posts: 14subscriber
    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.
  • JeannieJeannie Posts: 8subscriber
    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
     
     
  • JeannieJeannie Posts: 8subscriber
    So for the whole order, you just charge a total of  $2.00 additional for a whole case of your product?  Just want to re-confirm your advice.
    For example:
    In my case, the shipping cost is $16.00. So, using your advice, I would just charge $2.00 additional for the handling fee to make the total cost for shipping and handling to $18.00 for the wholesale customer, right?
    Jeannie
  • GrillCharmerGrillCharmer Posts: 7subscriber
    Jeannie, I know this is an old post, but I`m at this point EXACTLY!  Now that you have some experience under your belt, any advice?  Any of ya have anything else to add?  I`m all ears
  • JeannieJeannie Posts: 8subscriber
    Hi Leslie,
     
    Congrats to you on getting all the way up to this point! That`s so wonderful to hear!
     
    As for me, I actually received my first purchase order from the big graphics tablet company called Wacom recently.  And for them, I just charged the shipping plus insurance - at cost.  I didn`t charge a handling fee at all.  But for retailers, I usually just have them pay via FOB NJ. 
     
    But that`s just me.  As Mary Kay suggested, you could also charge them a minimal handling charge too.  Hope that helps!
     
    Good Luck with everything!
     
    Jeannie
  • GrillCharmerGrillCharmer Posts: 7subscriber
    Thanks guys!!!!  How do you ship your orders to your retailers?  Do you use UPS or are your orders big enough to use LTL trucking companies?
  • GrillCharmerGrillCharmer Posts: 7subscriber
    THANKS! That`s GREAT info!  Tomorrow I am pretty darn sure I`ll be in Store #2!!! YIPEE!!!
  • chris407xchris407x Posts: 0subscriber
    I would like to echo what Bert said here - beware of posting your shipping rates because they change.  I had that happen in an unrelated eBay action where I had posted a flat shipping price but the shipping rates went up before the auction ended!
    I am getting my wholesale pricing ready now and having shipping be the responsibility of the customer.
    ChrisAdams
    Laptop Lifts
    laptoplifts.com
  • bertbert Posts: 12subscriber
    Good points Chris.  Remember that you should not hide your shipping charges either.  Ever changing shipping costs is another good reason to have flat rate charges instead of actual charges.  Some web designers deal with shipping charges by not posting them until the last page of checkout.  This is a bad short cut!  I have seen so many web sites kill sales or localize their business by hiding how they handle shipping costs until the end and using actual rates.  These are major show stoppers.  Those that do it right closed many more sales this rough holiday season.  I have been getting calls and emails for the last three weeks telling me this method works.
  • AllenlavoieeAllenlavoiee Posts: 0subscriber
    I am a wholesale dealer and I am happy that you share this information. It gives me the idea of wholesale shipping cost.
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