Rodinhooders,
Namaskaaar !!!!
Would anyone know, what is an ideal expense ratio for “Freight/Shipment Charges” Vs “Sales” for an E-Commerce Company, for both Domestic Sales, and International Sales ?
Has anybody ever calculated that ?
I have done calculations for Nirogam.com, and have arrived at my 2 averages for Domestic and International. Wanted to know if we are doing good, or bad.
Can somebody help me here ?
Regards,
Puneet Aggarwal
www.nirogam.com
+91 99161 81405
Alok Rodinhood Kejriwal
No reply yet?
Wouldn’t this vary from consignment to consignment?
I mean, if you can make it profitable and people pay, whats stops you from getting caught in better ratios (initially)?
Puneet Nirogam Aggarwal
Yes, it varies from consignment to consignment. However, overall, when I take an average of my Domestic freight, it averages to 7% of my total sale value. And similarly in International transactions, my International freight averages to 12% of my total sale value.
I do understand that it is not in my hand, and I can’t do anything about it. Courier companies are increasing their charge every 2-3 months.
While we are profitable, and we are passing on some bit of this charge to the customer as well, I wanted to understand if we are doing OK in terms of the Ratio. Why ? Because if we are way off the mark, compared to other e-commerce companies like Jabong, Myntra, or the smaller ones, then atleast I would come to know that we are wrong somewhere.
I just want to find out at what stage do we start levying more freight charges to our customer.
For example – in Domestic, we charge Rs. 50 to our customer, while on an average, we pay Rs. 122 to the courier company, so we absorb about Rs. 72 from our own margins. So to rephrase the question, I wanted to know if that was :
a) right b) wrong c) best practice d) don’t worry too much about it.
Regards, Puneet