WHAT IS THE COST OF NOT KNOWING YOUR COSTS?

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"The Ultimate Guide to Fees & Costs"

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4. Why tracking inbound shipment costs is so important for accurate product costs?

Inbound shipping & logistics charges – the fees related to the delivery of goods into a business – are often overlooked.

Why? Unfortunately, when product is shipped, the inbound transportation cost can be buried in a supplier invoice, combined with the cost of goods purchased or one combined bill for all the contents of the container.

Combining costs may be simpler to manage expenses from an administrative perspective, but be catastrophic to your product's profitability.

The bigger your inbound shipping expense grows the more this oversight is costing you. Because of this, online sellers need to become a lot more meticulous when it comes to understanding these costs.

So, what can a growing business do to improve how they manage their inbound shipping costs?

When you track and manage your inbound shipment costs, you have the ability to reduce your shipping expenses and increase your profit. In fact, sellers on Amazon and other platforms who implement SellerVue's cost tracking software in some cases increased their profit margin by 4.25% in just the first 90 days of use.

If you are absorbing higher inbound shipping costs, this eventually gets passed on to your customers in the form of higher selling prices or worse to remain competitive you sell the product for a minimal return, break even or a loss.

One of the reasons you might be reading this guide is because you have encountered one or more of the challenges associated with inbound shipments. Addressing these challenging and focusing on the specific nuances related to inbound expenses builds efficiency and saves money.

Let's take a closer look at Cost of Goods Sold:

To truly understand and to calculate this number, you’ll also need to determine your per unit price (Factory Cost + Inbound Costs)

**Cost of goods sold (official definition):**

The direct costs attributable to the production of the goods sold in a company. This amount includes the cost of the materials used in creating the goods along with the inbound costs used to deliver the goods.

In other words, it’s the the accumulated total of all costs relating to a product or service which has been sold. From the factory to the warehouse floor.

An accurate Product Unit Cost (PUC) is how your Cost of Goods Sold is calculated.

Let's say your PUC is $1.60 and you sell 10,000 units in a given month. Your Cost of Goods Sold is $1.60 multiplied by 10,000 which equals $16,000

When you look at the sum total of all these aspects of the Product Costs and related Inbound Costs, it is clear that tracking them with clarity directly impacts your expenses and profits across all products you sell. All of these costs influence the individual SKU and your overall bottom line.

Clarity on the final landed cost of your products gives much more than a competitive advantage over your competitors - having absolute certainty on your landed costs gives your company a compass towards increased probability.

SellerVue is a working app—that is, the app is constantly updating and tracking your costs, so at any given time when you log in, you’re seeing your TRUE landed cost per product.

You’ll also be able to export this data wherever you need to, tell the app which charges to include or exclude from an invoice, and so. much. more.

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"The Ultimate Guide to Accurate Product Costs"

Download the free cheatsheet for our resource guide that shows you exactly how you can run your business like a cost-keeping pro.

Frequently Asked Questions

What is a dry container?

Dry containers (DC) are the most used type of container in the world: 90% of goods shipped by sea are loaded in dry containers. The 20-foot and 40-foot cargo containers are made of aluminum or steel and are suitable for all types of cargo. Aluminium containers have a slightly larger payload than steel, and steel dry containers have a slightly larger internal cube.

Dry container size and capacity

The specific dimensions and capacities of dry containers may vary depending on the container manufacturer, the age of the container and the container owner. The specifications listed below are representative of the majority of containers available.

Tare weight /ˈtɛər/, sometimes called unladen weight, is the weight of an empty vehicle or container. By subtracting it from the gross weight (laden weight), the weight of the goods carried (the net weight) may be determined. ... Tare weight is also used in body composition assessment when doing underwater weighing.

What does FCL mean in Shipping

Two of these include Full Container Load (FCL) and Less Than Container Load (LCL) shipping. FCL refers to shipments for which all goods in a container are owned by one party, while LCL involves multiple shippers' goods packed together.

What does LCL mean in shipping?

LCL (Less than Container Load) refers to a shipment that doesn't fill one 20 or 40ft standard container. The container is therefore loaded with cargo from multiple consignees. On arrival at the destination port, the goods are separated at a container freight station.

How is CBM calculated in China?

CBM – cubic meter is calculated by multiplying length, width and height of packages of goods. For example, if the length, height and width of a cargo is 2.3 meters, 1.4meters and 2 meters respectively, the volume of cargo is 2.3 X 1.4 X 2.00 = 6.44 CBM.

How do you calculate volumetric weight for shipping?

Volumetric weight can be calculated by multiplying the length, width and height of a parcel (in cm) and dividing that figure by 5000 (some carriers use a divisor of 4000). You may often find that the price of your shipment is dictated by the volumetric weight of your parcel(s) rather than the physical weight.