LP – Freight & Shipping

Freight & Shipping Guide

As an ecommerce seller, inventory is everything. Without it, there is no business. Product in; product out. The “product in” is all about determining what your product is, where to source it, when to replenish it, and how to account for the costs of getting the product to your warehouse or distribution center. The flipside of “product in” is of course the “product out” part of your operations. This includes getting your product shipped to your consumer and again, accounting for the costs in the proper way. It’s another side of the operations process that must be calculated and managed in order for you to stay profitable.

That’s ecommerce 101, right?

Many of the clients I work with have a handle on the big pieces of the process— identifying and sourcing the product, storing and replenishing the inventory, and finding economical ways to ship their products to their buyers. The thing that confuses a lot of my clients is how to account for the freight and shipping costs associated with their products. Oftentimes this confusion comes from not fully understanding the costs and how they relate to the production or sourcing and delivery of the sold products. From an accounting perspective, these costs are handled quite differently.

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