A consumer is charged a shipping and handling fee in addition to the purchase subtotal to cover shipping and handling charges. This fee covers the costs of fulfilling a specific customer's order, such as storage, packaging, and shipping.
[Hourly rate x [Average number of minutes worked to package an item / 60] For example, 15 minutes divided by 60 equals 0.25; 0.25 multiplied by $10 per hour equals $2.50. Those are your transaction fees.
Handling fees cover the costs of gathering inventory for an order, packing products into boxes with the proper packaging materials, creating a shipping label, loading the package onto a truck, and any additional warehouse movement.
DIM weight is calculated by multiplying the package or box size's length, width, and height, then dividing by a typical DIM divisor. Shipping companies including USPS, FedEx, and UPS determine shipping charges based on the larger of the package's actual weight or DIM weight.
If a consumer spends $50 before fees and taxes, shipping is $9, and your per-order operational or handling expenditure is $5, the total shipping and handling cost for the purchase is $14, or 28% of the order value.
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