Key Ratios of a Successful Catalog Company

Shipping & Handling Income and Expense

New guidelines from The Direct Marketing Association note that direct marketers should not charge customers more than a “reasonable amount” for shipping and handling (S&H). That is, S&H should not be thought of as a profit center.

That said, it’s important that you know if you’re making or losing money on S&H. Thus it’s common to show S&H on a catalog income statement. Moreover, S&H expenses should be handled on your income statement, too. Most often, shipping income is posted to the revenue line (e.g., sales). This is a legitimate revenue line item that’s part of gross sales.