A closer look at catalog S&H charges

By Ray Bohman -- Logistics Management, 11/1/1999

As longtime editor of a monthly newsletter called The Furniture Transporter, which focuses on all aspects of packaging, shipping, and delivering new furniture, I recently began running a series of articles analyzing what catalog retailers charge their customers for shipping and handling (S&H), particularly where furniture is involved.

In reviewing various mail-order catalogs, most of which include not only furniture but also such products as women's clothing, home accessories, and jewelry, our staff found that most have a sliding scale of charges for shipping and handling that varies according to the dollar amount of the customer's total purchase. Although many variations exist, one that is somewhat typical is reproduced below:

Total Merchandise Cost Add:

Up to $25.00 $4.95

$25.01 to $50.00 $6.95

$50.01 to $75.00 $9.95

$75.01 to $100.00 $11.95

$100.01 to $150.00 $12.95

$150.01 to $200.00 $14.95

$200.01 to $300.00 $16.95

$300.01 and above 7%

We found a few companies that levied no charge for S&H if the total amount of merchandise purchased exceeded a stated dollar amount, which ranged from $150 at one catalog house to $500 at another.

The lowest minimum dollar purchase amount we found in scales such as the one shown above was on purchases of up to $10.00, where a $3.98 S&H charge was assessed. The highest was on purchases of up to $35.00, to which $3.95 was added for shipping and handling.

If the customer wants delivery faster than that provided via normal small-package surface delivery service, most catalog companies offer express delivery at an extra charge over and above their standard shipping and handling charge. One company collects an additional $7.98 for two-day express air delivery. Another assesses $14.00 more for next-day deliveries.

And if the product being purchased is heavy or oversized, such as furniture, rugs, or lamps, the buyer may well be required to pay a shipping surcharge over and above the company's standard S&H charge. In our furniture study, we found that surcharges ranged from a low of $20.00 extra per piece on an article such as a tray table, to as high as $200 more for an article such as a decorated chest.

When we looked at total freight charges (S&H plus surcharge) as a percentage of the invoice price of the furniture, our study found a range from 9.0% on a secretary desk to 52.6% on an upholstered rocking chair. Of all the furniture pieces included in our continuing study, here are the percentages found in each percentage-of-freight-to-invoice-price grouping:

% of Total Delivery Charges

to Invoice Price % in the Group

Less than 10% 6.1%

10.00% to 19.99% 51.5%

20.00% to 29.99% 27.3%

30.00% to 39.99% 10.6%

40.00% or greater 4.5%

As you can see, the customer is sometimes charged more for delivery of certain types of furniture or heavy or oversized merchandise. Bear in mind, however, that this usually includes delivery to the customer's home, unpacking, assembly if necessary, and removal of packing materials, as well as transportation from the factory. These are costs--except for transportation costs--that would most likely be lower than the charges a brick-and-mortar furniture retailer would normally incur and either build into its prices or recover through a separate delivery charge.

Ray Bohman is a well-known consultant and author. Mr. Bohman is editor of several highly successful newsletters on transportation and is a consultant to a number of national trade associations. He is president of The Bohman Group, consultants and publishers in the freight-transportation field. His offices are located at 27 Bay Lane, Chatham, MA 02633. Phone: (508) 945-2272.