What is Shipping / weight-handling fee?

What it is

When a marketplace's own logistics delivers your order, it charges a shipping fee, called a weight-handling fee on some marketplaces. It applies whether the stock is in the marketplace's fulfilment centre or picked up from your warehouse, though the rate cards for the two are often different.

The fee is usually set by:

• Chargeable weight: the higher of the actual weight and the volumetric weight, rounded up to the next slab.
• Distance band: local (within a city), regional (within a zone) or national.
• The fulfilment programme, and sometimes the product's size class.

Where the weight comes from

The fee is usually charged on the dimensions and weight recorded for the product, from your listing or from the marketplace's own measurement. If the recorded figures are wrong, every order is charged in the wrong slab. Check the dimensions the marketplace holds for each SKU, and ask for a re-measurement if they are higher than the packed product.

Return shipping

When an order comes back as an RTO or customer return, the marketplace may charge for the return trip too, at its own rate. These charges appear in the settlement in which the return is processed, often weeks after the original order.

GST and accounting

• GST is charged on the shipping fee, on the marketplace's monthly fee invoice, and can be claimed as input tax credit if the usual conditions are met.
• If you charge the customer a shipping fee, it is part of your sale value and GST is charged on it at the rate for the goods when it is part of one supply with them.
• The shipping fee is a selling cost in CM2. Book it by SKU where you can, because bulky SKUs pay much more.

Keeping it down

1. Right-size packaging to bring down the volumetric weight.
2. Keep the listed dimensions accurate.
3. Keep stock in fulfilment centres near your main customers, so more orders fall in the local or regional bands.
4. Check the fees in every settlement against the current rate card.