Shipping and handling involve picking, packing, and transporting purchased items to the end customer. It’s the amount charged for the labor, storage, and delivery costs incurred to complete customer orders.
Although many consumers might consider shipping and handling to be the same thing, as a business owner, it’s important to distinguish between the two.
Shipping refers to the cost of delivering ordered items to customers. These charges include the fees and surcharges for transporting the packages such as postage, fuel, delivery method, and delivery timeline. For example, same-day delivery might cost more than two-day delivery and delivering to a higher shipping zone would cost more than a lower one – more on this later.
Handling, on the other hand, includes expenses linked to receiving ordered goods, packing them in shipping boxes, labeling them correctly, and loading them on a delivery truck. In other words, this involves the various touch points the ordered goods go through while they’re still in the warehouse. Handling is an essential part of the order fulfillment process. Some other costs associated with handling fees may include value-added services such as customizations, kitting, and gift wrapping.
We can’t overemphasize the importance of shipping and handling. Most importantly, it directly impacts customer satisfaction and can mean the difference between keeping a customer or losing them forever. Optimizing your shipping and handling processes allows you to compete head-on with other businesses while also helping you build a strong reputation and establishing a brand name.