How to Figure Freight Percentage

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When purchasing supplies for your business, one of the most costly items can be shipping charges. If you calculate your freight percentages, you can see what percent of each purchase you has goes to shipping. This is a cost you can control by negotiating better shipping rates with different companies. Places like UPS and FedEx will provide better shipping rates for you if you have many shipments to and from your place of business.

Determine the total cost of the purchase or sale. For example, assume your purchase or sale costs $500.

Determine the cost for shipping. In the example, assume the cost of shipping was $25 of the $500.

 

Divide the cost of shipping by the total cost of the purchase or sale. In the example, $25 divided by $500 equals 0.05 or 5% freight percentage.

 

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About the Author

Carter McBride started writing in 2007 with CMBA's IP section. He has written for Bureau of National Affairs, Inc and various websites. He received a CALI Award for The Actual Impact of MasterCard's Initial Public Offering in 2008. McBride is an attorney with a Juris Doctor from Case Western Reserve University and a Master of Science in accounting from the University of Connecticut.

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