Figuring out the cost of shipping your goods is one of the most important tasks when starting an online business. You don’t want to charge too little eating into your profit or charge too high and lose customers to competitors.
With customers flung in different parts of the country and even worldwide, estimating and managing your shipping cost properly will significantly impact your sales and brand value.
In this article, you’ll learn how to get quotes, extra services, and crucial factors that may affect the price of your shipment.
How Much Does It Cost To Ship a Package?
It is impossible to get the ultimate cost for shipping every item. You can, however, check out our estimates on the Cost of Shipping specific items. Meanwhile, there are a lot of factors that come into play when figuring out the cost of shipping any package.
Information Needed for Accurate Estimate
Shipping prices can be complex to calculate since several factors might influence the total cost. When estimating shipping expenses for a shipment, there are four essential pieces of information that are always essential.
You should be able to receive an accurate price if you have this information. Here are the four things to consider at all times:
1. Origin and Destination of Shipment
The distance your shipment travels from its point of origin to its delivery destination is a significant factor in determining the shipping cost. Typically, the further your package travels, the higher the fees.
Shipping zones are used by couriers to calculate the distance a shipment travels from its origin to its final destination. There are now eight shipping zones divided by zip code in the US.
USPS, FedEx, UPS, and DHL all base their pricing on shipping zones that may be seen on their own websites.
As basic as it may seem, you must first determine where you are shipping from and where the goods will be delivered before you can begin calculating prices.
2. The Actual Weight of the Package
The weight of a shipment is a crucial determinant of a shipping carrier’s standard rate. Put the package on a scale and find out how much it weighs. The heavier the box weighs, the more it costs to deliver.
There is also a dimensional weight to consider. This becomes more intricate and is determined by the dimensions of the box in which you are shipping the products.
3. Dimensions of Package
The height, length, and width of the box used to ship the goods determine the dimensions of your shipment. Because packages come in a variety of sizes, it’s critical for online businesses to understand the impact of dimension on shipping.
Particularly since couriers charge by dimensional weight as well. Basically, this is how much space a parcel takes up in the transport vehicle.
To calculate the DIM weight, shipping companies multiply the height, length, and width of your package, then divide the result by a cubic denominator of their choice.
A good understanding of dimensional weight and how to optimize box sizes will reduce shipping costs significantly. Such little details can help you save money on shipping and get a good estimate, which will profit your online store’s bottom line.
4. Speed of Delivery
The delivery speed refers to the time it takes for a shipment o to arrive at its destination. This can range from overnight to over a month, with pricing varying in between, depending on how fast you want the package to get to its destination,
It will cost you more to get a parcel sent overnight than if you choose a typical 3-7 day ground service. You will almost likely need to know how quickly you want your shipments delivered before estimating shipping prices.
What Are the Factors that Affect the Cost of Shipping?
We’ve seen how shipping rates are affected by location, weight, size, and delivery speed, but what else impacts shipping rates?
To provide the best experience for your customers and to minimize the risk of cart abandonment, you must include these services when estimating shipping costs.
1. Insurance for shipments
If you’re delivering valuable, personal, or delicate items, shipping insurance is a must. Having shipping insurance helps protect you and your company against things being damaged, lost, or stolen throughout the shipment and handling procedure.
Despite the high delivery fees, losing a valuable package that isn’t insured might have a negative effect on your profitability, especially if your margins are low. The price of shipping insurance is likely to be little compared to the cost of the item.
As little as 3% of the total shipping value is required. To find the best bargain, compare shipping insurance charges from couriers and third parties.
2. Charges for shipping
Given the nature of shipping and handling, shipping-related expenses are unavoidable at times. This may happen both domestically and overseas while shipping.
Fuel surcharges, Pickup location, and costs for unforeseen mistakes are the three shipping-related expenses to watch out for. Charges for pick-up are varied and differ per courier. They might apply to deliveries conducted outside of normal service regions as well as pickups up from home.
When using express services such as overnight or same-day, fuel fees are typical. These expenditures fluctuate with the price of gasoline, making forecasting difficult. Fees that might be considered “mistakes” include:
- Returning a package to its sender
- Refusal of parcels
- The gift that required repeated delivery attempts
- Addresses that need to be changed while in transit.
3. Handling Fees
Parcel handling fees often come up when shipping hazardous packages. Anything from needles to batteries, to firearms, is considered dangerous. If you’re mailing things like these, you’ll probably need to utilize specific packing stickers.
When a shipment requires two individuals to deliver it, you also have to pay extra handling fees. Refrigerators and couches are two examples of bulky and heavy objects. Similarly, boxes constructed of metal or wood, as well as odd-shaped and sized packages, may be subject to similar charges.
4. Taxes and Duties
When shipping overseas, duties and taxes are the most likely extra costs you may encounter. These are determined by the item being shipped and its value. They are sometimes covered by the seller, the buyer, and occasionally both.
The two kinds of charges you may incur when shipping internationally include Delivery Duty Paid (DDP) and Delivered Duty Unpaid (DDU). Failure to acknowledge them might result in hidden charges.
- DDU Shipments – All fees must be covered by the seller, with the exception of duty or taxes that are required when the product reaches the importing nation. Simply put, the sale price of the items must include all costs associated with getting the product to the customer’s doorstep. Everything is handled by the vendor, including shipment, customs, and handling fees.
- DDP Shipments — When it comes to Deliver Duty Paid shipments, the seller is responsible for all shipping expenses, including duty and import taxes. When your delivery arrives in the importing country, carriers may bill you extra fees to pay taxes and customs on your behalf.
Another charge that you might face is if you under-declare the value of a package. Customers may request a fresh invoice before the package is issued, which can have a significant impact on delivery timeframes. Additional delivery costs and warehouse fees are usually typical.
How To Add Shipping Cost To Your Products
There are three ways you can factor in shipping costs into the price of your Each offers benefits and drawbacks, and you must choose which is best for the success of your business and customers. There is no “one-size-fits-all” solution, which is why shipping costs must be calculated.
1. Calculated Shipping Options
Calculated shipping is the simplest method of estimating shipping rates. You need to measure the dimensions and weight of the item to get a quote. The cost of shipping is calculated based on these measurements and shipping distance.
The main disadvantage of this method over the others is that you must compute the pricing for each product manually whether you have a 1,000 range of products. However, devoting time to this will benefit your customers because they will receive a shipping fee based on the product they order.
2. Flat-rate delivery
Flat-rate shipping is when you charge the same amount regardless of the size, weight, or shape of the package. The price will only differ when shipping to various countries.
Customers can purchase as much as they wish with this technique and simply pay a single fee, which is established by you. It is a popular choice among small businesses due to its convenience and dependability. It is not the best solution for huge firms with more serious logical issues.
To provide a flat-rate delivery option, you must first calculate your company’s average shipping cost. Then, when your costs increase, you can boost shipping prices, and as they fall, your customers’ shipping expenses will reduce.
3. Free Shipping
Many online businesses tend to offer free shipping, and for a good purpose. Free shipping is popular with customers, and that can be a wonderful way to boost sales.
However, this can be a different situation for your company. Businesses have two possibilities for providing free shipping:
- Include shipping costs in the product list price, which could make the product costlier than competitors.
- Reduce margins by absorbing shipping costs.
Customers will not hesitate to spend more if you advertise “Free shipping on all orders!” across your website. It also makes the payment procedure more straightforward.
Comparison of Shipping Prices
We’ll calculate shipping rates for a 4lb item with box dimensions of 8 11/16″ x 5 7/16″ x 1 3/4″ to give you an understanding of the range of shipping prices.
- UPS Ground 4 days $9.25
- UPS 2nd Day Air 2 days $21.25
- FedEx Ground 4 days $18.19
- FedEx 2 day 2 days $52.62
- USPS Ground 3-5 days $20.85
- USPS Priority Mail 2 days $23.15
You can check accurate estimates by using tools like USPS Retail Postage Price Calculator or other calculator tools on the website of your preferred courier.
If you’re shipping perishables you can check our guide on How To Ship Perishable Food Items.