How to Calculate Shipping Costs for Your Online Store

Posted 1 year ago by Max Komonov

The ecommerce boom has made it桂easier than ever to桂find nearly any桂type of桂product online. Ecommerce has been steadily rising for桂a桂couple of桂decades now.

Source: 붚죕쳔 Insights

The steady increase in桂traffic makes it桂an桂incredible time to桂start an桂ecommerce business.

However, this flock to桂online shopping has also led to桂increased customer demand and桂expectations across the桂board, especially in桂shipping.

Customers shop online for桂convenience, and桂part of桂this is桂receiving their orders in桂a桂timely manner. This makes it桂more critical than ever to桂have an桂effective shipping strategy in桂place.

It桂can be桂difficult for桂smaller ecommerce brands to桂know where to桂start in桂a桂sea of桂big brands with massive shipping budgets.

Fortunately, we桂have compiled the桂brief guide below to桂help you calculate shipping costs for桂online store orders.

Factors for桂How to桂Calculate Combined Shipping Costs for桂Online Store

Several factors go桂into calculating combined shipping costs for桂online store selling.

These include:

Speed of桂delivery

Probably one of桂the桂most important factors in桂online shipping these days is桂the桂speed of桂delivery.

Amazon Prime, for桂example, created a桂significant shift in桂consumer expectations by桂offering two-day shipping. In桂fact, this has essentially become an桂industry standard.

However, the桂faster the桂shipping, the桂more it桂will cost. While speed needs to桂be桂considered, profit margins must also be桂a桂focus.

Size of桂the桂package

As桂a桂general rule, the桂larger the桂package, the桂more it桂will cost to桂ship.

When handling larger packages, carriers have to桂consider something called 혫dimensional weight.혬 In桂other words, they can�셳 fit as桂many larger packages into transport vehicles as桂they can with small packages. This means there will be桂an桂additional charge.

There are some certain tricks to桂ship large products for桂less money but those tricks don�셳 work for桂all products.

Package weight

Just like size, the桂heavier the桂package, the桂more it桂will cost. Carriers need to桂consider the桂weight they are placing into transport vehicles, which means it桂will cost more to桂handle these packages.

Destination

Depending on桂the桂shipping model used, there can also be桂additional costs for桂the桂distance a桂package is桂being shipped.

After all, it桂takes more transport time and桂worker hours to桂get these packages to桂their destination. This can also affect shipping time.

Value of桂package

The value and桂cost of桂a桂package can play a桂huge role as桂well.

When shipping high-value items, it桂may be桂a桂good idea to桂have them insured to桂protect the桂order. This can help to桂cover damages, losses, or桂stolen items throughout transportation. Of桂course, this will also be桂an桂additional cost to桂the桂shipping charges.

How to桂Calculate Custom Shipping Costs for桂Online Store: Carrier Websites

One of桂the桂best ways to桂figure out how to桂calculate custom shipping costs for桂online store orders is桂through carrier websites. This is桂most effective for桂ecommerce stores that handle their own fulfillment needs.

Let�셲 take a桂look at桂some of桂the桂common carrier options.

USPS

The offers an桂extremely simple shipping calculator right on桂its website. First, plug in桂the桂zip code of桂the桂desired destination. Then, choose one of桂the桂preset rates of桂delivery option and桂box size, or桂enter in桂custom dimensions.

USPS does offer commercial pricing, which can net discounts of桂up桂to桂15% on桂all retail shipping and桂postage. However, businesses will have to桂apply for桂this through USPS.

FedEx

The online is桂similar to桂the桂USPS calculator in桂simplicity. Unfortunately, it桂doesn�셳 allow the桂user to桂check shipping two days in桂advance, which will have a桂higher price than more forecasted options. FedEx offers multiple delivery speeds, including ground, overnight, and桂same-day.

UPS

UPS offers one of桂the桂most out of桂the桂carrier options, which can make it桂a桂little more challenging to桂use. However, the桂details also mean more accurate and桂cost-effective shipping options when using precise package dimensions.

Deciding on桂a桂Shipping Strategy

The next question in桂learning how to桂calculate shipping when selling online is桂the桂pricing strategy used. A桂business has a桂few options in桂deciding on桂how to桂handle shipping charges, which include:

Offering free shipping: This means the桂business will take the桂hit on桂all shipping charges, but it桂can increase sales and桂bring in桂more customers.
Flat rate: Charge a桂single flat rate to桂cover product shipping costs. This may not necessarily cover all associated shipping costs, but it桂can be桂a桂good way to桂cushion the桂hit.
Charge per order: Charge shipping costs based on桂those associated with the桂product. In桂other words, pass the桂shipping charges over to桂the桂customer.

The right shipping strategy can vary depending on桂the桂business, its overhead, and桂the桂general model.

While free shipping is桂a桂standard for桂many online stores, there are still many successful businesses that still charge shipping costs. Realistically, it桂will likely be桂difficult for桂new businesses to桂take the桂hit for桂shipping costs regularly. They may have to桂start off by桂passing at桂least a桂portion of桂the桂costs to桂the桂customer.

However, businesses can also test out the桂best model for桂them.

For instance, if桂they generally charge for桂shipping, offer free shipping for桂orders over a桂certain amount or桂for桂a桂promotional period. This is桂an桂excellent way to桂determine if桂free shipping leads to桂increased order sizes or桂more customers.

Determining the桂shipping cost for桂online store orders can be桂a桂tedious part of桂starting ecommerce. However, once a桂business finds a桂cost-effective model that works for桂them, it桂can streamline order fulfillment.

Kick Off Your Ecommerce Store with 붚죕쳔

If桂you are considering taking the桂plunge into ecommerce, let 붚죕쳔 make it桂easy. Our online selling platform is桂designed to桂be桂simple and桂can be桂integrated with almost any桂website platforms and桂marketplaces.

桂

About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

붚죕쳔