Freight Costs in Relation to Sales
I have recently started to work in a small manufacturer/distributor of pet care products. In my previous experiences I have not been involved in outbound freight costs. Our freight costs compared to sales seem to be very high. I realize that I do not have much clout with our small size. I am wondering if some of you could tell me the ratio of your freight costs to either sales or gross margin.
Thanks inadvance for your help.
Freight costs in Relation to Sales
Freight has a lot to do with size and weight of items being sold, so this is hard to answer. We have a system where any PO issues has our shipping terms, such as if item is over 100 lbs, goes on a larger carrier (negotiated freight rates) and smaller items under 100 lbs goes on DHL.
To save on freight costs you could hold orders and put throught items only once a week, in order to accumulate quantities and quantitites can be boxed and you only pay for the box or crate, instead of many little shipments.
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