Configuring Logistics Costs

How to configure your variable and fixed Logistic Costs per region

Valentine Strunz-Happe avatar
Written by Valentine Strunz-Happe
Updated over a week ago

Update August 2023

Logistics costs configuration is now updated to have even more flexibility to ensure your costs are calculated with precision on every product.


โ€‹What's new about the logistics cost configuration?

  • Weight-based configuration of outbound shipping and return costs per order by defining your individual weight buckets and their respective costs

  • Separate cost definition for different shipping types and specific products

  • Exclude products that do not incur any logistics costs (e.g. digital products)

With these new settings, you can fine-tune your logistics expenses and achieve maximum accuracy. More on this in the video below:
โ€‹

tl;dr

Klar gives you an interface that allows you configure your logistic costs structure for different shipping types. The following type of costs can be set:

  • Fixed Costs

  • Variable Costs per Order (weight-based or fixed)

  • Variable Costs per Item

  • Variable Cost per Return (weight-based or fixed)

  • Variable Costs per New Customer

  • Variable Costs per SKU

  • SKUs excluded from logistics costs

Important: Since recording the above video the logistics costs setup has moved. You can now configure your logistics costs inside the specific Shop Datasource you want the logistics costs to be associated with.


How to configure your Logistics Costs

Setting up a new Cost Structure

  1. Go to Settings > Store Configurator in the sidebar

  2. Click on the Shop Datasource you want the logistics costs to be associated with

  3. In the Shop Datasource open the Costs menu

  4. Click the ADD COST + Button

  5. Select Logistics Cost

Select/Configure a Region

In the first step you can select the region this cost structure should apply for. The region is selected on the Shipping Country Adress for each order.

  1. Select a previously configured region or

  2. Go to Settings > Account Settings in the sidebar

  3. Select Regions in the top menu

  4. Select ADD NEW REGION to create a new region. A region can contain one or multiple countries.

  5. Press SAVE REGION

Configure your costs structure

We highly recommend to watch the video for this part.

The following costs can be configured.

Fixed Costs:

These are fixed costs per day (such as warehouse rent or for a 3PL) that will be equally distributed across all orders on each day. So if you have fixed costs of 50 Euro and you have 200 orders on a single day, then that would be 0.25โ‚ฌ per order.

Variable Costs per Order:

General Costs:

If you want to keep things simple, just use the General Costs to configure what you the fulfilment of an order, regardless of the number of items costs. If you want to go more detailed, use the following options instead.

Outbound Shipping:

This is the Outbound Shipping Costs per Order you pay to your fulfilment partner like DHL to deliver the order to your customers.

Packaging Costs:

This is the cost for the box your customers' orders is being shipped in.

Other Costs:

Anything missing for costs related to an order, add it here.

Variable Costs per Item:

Picking Costs First Item

These are the costs associated with picking the first item within an order.

Picking Costs Following Item

These are the costs associated with picking all items following the first one. If you pay the same Picking Costs for every item, just put the same value as for the previous field in here.

Storage Costs:

Instead of including it as a fixed costs, you could also make your Storage Costs variable and enter here, how much you are on average paying to store you products per item you ship.

Inbound Shipping Costs:

Usually you include the inbound Shipping costs (meaning getting the product delivered to your warehouse) in the COGS. Should you want to include it as a Logistic Cost you can add it value per item in this field.

Other Costs:

Anything missing for costs related to an item, add it here.

Cost per Return:

Return Costs per Order:

If you are paying for the return of orders, you can configure the associated costs here. The costs will only be applied if an order is (partially) returned.

Return Costs per Item:

There are likely also going to be costs associated not just if the order is returned, but also the number of items that are being returned. This could be costs to check quality and/or restock the item in the warehouse shelves.

Cost per New Customer:

In order to make a good first impression, you might include some Goodies or Info Material in deliveries made to First Time Customers. If so, you can enter the cost of those items her and they will only be applied if an order is in fact a new order.

Variable Costs per SKU:

There might be some costs that are just unique to certain SKUs. These costs will be applied for each count of a SKU within an order. Couple of examples might be:

  • One of your items is very bulky, so Shipping Costs are higher.

  • One of your SKUs is actually a bundle SKUs the 3PL needs to pick separately and charges you for that.

Gross Merchandise Value is the sum of the RRP (Recommended Retail Price) of all items sold in a given period. Thus, it is before any deductions such as discounts, returns and taxes are made.

Due to that, it is not really a great measure of success as it can be easily inflated. It is still useful as a starting point in your P&L from which everything gets deducted.

Define Date Range

For all of the above costs, different Date Ranges can be defined.

For example, if you get a new deal with your warehouse service or logistics provider, you can define a new data range and enter the adjusted costs in there.

That way, your margin calculation stay accurate over time and improvements can be accurately represented in Klar.

Save & Finish

  1. After all costs are added, scroll to the top and enter a name for the specific logistics costs setup.

  2. Scroll to the bottom of the setup and press SAVE LOGISTICS COSTS.

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