It doesn’t always have to cost you nothing. Studies have shown that 91% ecommerce customers will rethink buying from an online store if they find out that shipping was not priced right or that it wasn’t speedy enough. Moreover, 43% of these consumers will go to marketplaces for alternatives. This is because customers have been taught to recognize that Amazon and Walmart offer reliable and affordable shipping methods. What does this mean for small- and medium-sized ecommerce shops? Without reducing your profits, we’ll show how to calculate shipping costs so that you are transparent and competitive.
Remember that marketplaces like Amazon have set the standard. Customers will go to these sites expecting fast delivery and free shipping.
However, marketplaces have also set a standard of lower quality
This is a situation that has existed since the dawn of industrialism. Henry Ford invented a way to produce cars using the assembly line in a highly efficient manner. This allowed the average person to purchase a reliable, affordable car without having to wait for a custom order.
Some argue that it was a breakthrough in efficiency but also sparked a decline in American automobile quality. Japanese and German cars are known for being more durable and better in engineering. Audis and BMWs are also more luxurious and stylish than Audis, even if you ask American consumers.
It is possible to still start an online business and make a lot of money with the help of Amazon, Alibaba and Newegg. Although consumers are often eager to get free shipping, they know that they can also receive something cheaper and more effective than they would receive from Amazon, such as a cable for their television.
But, if they find a unique invention or purchase custom-made leather shoes or even an art project on Etsy then paying shipping costs isn’t so strange. They’re not paying for the quality and uniqueness of their product.
It is possible to offer shipping at a discount. However, a smaller online shop will be able to offer free shipping if customers spend $50 or $100. You can upsell, but still offer free shipping to those who pay.
How can you calculate shipping costs to make it easy for your customers to see what they’ll have to pay?
Shipping rates are a subject that raises many questions.
- Is your ecommerce platform able to generate shipping rates?
- Is it necessary to pay extra for another plugin in order to get a shipping fee?
- How do you sync your shipping rates with your shipping partners such as UPS and FedEx
We will answer any questions you may have about shipping rates to make sure that you and your customers are satisfied.
How to Calculate Shipping Prices – Based on Many Factors
How does a post office calculate the cost of a letter you want to send? It often seems like an odd, random number like $14.23 or $5.02.
Shipping rates are not given in round numbers because many factors are considered before calculating shipping costs for each item.
Each shipping carrier uses a unique equation to calculate a shipping cost. They often tie-in any or all of the following variables:
- What speed do you want the package to arrive at the destination?
- The value of the package.
- What the package is about.
- How heavy the package is.
- Dimensions of the physical package.
- Unexpected issues or fees may result in additional costs.
Shipping Cost Calculators
UPS, FedEx and USPS all offer shipping calculators that can help companies figure out how much they can expect to be paid for their shipments. These online calculators are not meant to be used for finding rates and calculating sales. However, integrations can often be added to your website.
The online shipping cost calculators can be used to compare and check average shipping rates for your shipment. You can then get a general idea about which shipping company is the most cost-effective for your business.
Shipping Cost Calculator by USPS
The USPS offers a simple page that includes three price calculator options.
- Calculator for Domestic Shipping Cost
- International shipping calculator.
- Shipping calculator for business prices
To understand how rates will look when managing large quantities of shipments, online stores should use the business calculator. You can enter details such as the type of packaging and dimensional weight.
For ecommerce in the United States, the domestic calculator is important as well. If you are shipping internationally from the United States, it is important to verify the international rates. If you are shipping to other countries from the US, you cannot use the USPS.
If your business is located outside the US, you can use one of these shipping rate calculators to get started.
For US-based businesses, USPS offers the lowest shipping rates for small items.
UPS Shipping Cost Calculator
This page allows for you to enter information about freight and package shipping. This page will return results for many services, including UPS Ground and next-day air.
UPS offers ecommerce fulfillment services and shipping services that will make it easy to send your packages.
If you sign up for the UPS Small Business program, you will receive discounted shipping rates. Shipping discounts are also available with Shopify or other ecommerce platforms.
FedEx Shipping Cost Calculator
This page contains several calculators, including options for freight and packages, as well as rate tools, weight calculations and ground service maps.
FedEx is a useful tool for online shops located around the globe, especially when shipping products overseas.
We recommend that you check out the FedEx Ecommerce Center. It can integrate with your online shop and automate the fulfillment of orders. You can get packaging and pickup assistance, as well as rates and transit times for your customers.
Calculator for DHL Shipping Charges
This tool will provide you with a quick estimate to help you determine the cost of DHL shipping your future shipments. DHL is known for its ability to handle international shipments at affordable postage rates. They aren’t cheap, but they do the job. DHL is not the most practical and expensive option for local shipping.
To get a quote on your entire operation, and to learn how integrations work with online stores, we recommend visiting the DHL Ecommerce Logistics Page
How to calculate shipping costs with Ecommerce Platform Integrations
Working with an ecommerce platform allows you to obtain the discounts you desire, which is a key factor in getting the lowest shipping rates for ecommerce.
Shipping costs should not be paid by online stores that ship on a regular basis.
You have two choices.
- You can check to see if any shipping apps offer discounts or other services that you can link to your ecommerce platform.
- Ask your fulfillment company about shipping deals.
This is the second reason, as third-party fulfillment companies often offer shipping discounts. Shipping rates are not always an issue, as it is all included in your monthly fee.
You might also consider apps that offer better shipping practices or discounts for major carriers.
ShipBob – This is a great way to streamline your order fulfillment. It offers same-day delivery in some cities, and two-day shipping across the US. ShipBob, an official Shopify partner offers free software and integrations to manage your orders and track inventory.
ShipStation – Available on multiple ecommerce platforms. This app allows you to receive deeply discounted rates from major carriers. Integrate with your website to offer real-time shipping rates.
EzySlips connects your store to FedEx and Aramex. You can automate fulfillment, display shipping rates and expedite returns.
Advanced Shipping Rules – An app that displays shipping rates for different products. This app is great if you require advanced rates and want direct links to UPS and FedEx.
AfterShip – A solid app to establish shipping rates for your site, send out tracking codes and find deals for popular carriers such as USPS and DHL.
ShipBob – ShipBob is a popular order fulfillment option on major ecommerce platforms. Bigcommerce is similar to Shopify, and offers integration between both systems. It also provides great software to manage your orders and offer fast and affordable shipping to customers.
Ordoro – This app allows you to track inventory and ship, as well as saving money and delivering the correct shipping costs to your customers.
ShipHero – This is your one-stop shop for receiving, shipping, returns and inventory management. Find the best carriers, find the lowest shipping rates, reduce overselling and returns, and connect with them.
WooCommerce Shipping – A free extension that allows you to print labels directly from your WordPress dashboard. It also offers pre-negotiated USPS rates.
Shippo – Get amazing discounts from top carriers and shipping cost calculators right on your site.
Table Rate Shipping – Create dynamic and advanced shipping tables based upon elements such as cost and order size. This tool is also useful for calculating shipping costs on your website.
How to Reduce Your Ecommerce Shipping Fees
There are many ways to reduce shipping costs:
- Use the calculators to compare shipping rates for products and locations from major shipping companies.
- Register for ecommerce or small business programs when you find the right carriers. These programs offer significant discounts and expedited shipping.
- Use a shipping app within your eCommerce platform. These app companies usually have pre-negotiated rates from major shipping providers.
- Third-party logistics providers can help you save money on storage, shipping, or packaging. Your workers can focus on other aspects of your business while this also allows you to save money.
Third-party fulfillment has lower shipping fees
You might not be able to ship enough product to qualify for a FedEx or UPS rate. Third-party fulfillment companies can ship many items and have agreements with the carriers. The savings are passed on to you and your customers.
Shipping times are faster with third-party fulfillment
Fulfillment partners are connected to a network of storage facilities. This allows you to save money on storage and ensures that your customers get their products quicker. Because the items can be shipped from the nearest facility, this is possible.
Third-party Fulfillment can save you time
Shipping, inventory management and packaging are time-consuming and costly. Third-party shipping companies can take care of all the details for you. This allows you to focus on other aspects of your business.
A Shipping Rate Strategy
It is essential to learn how to display and calculate shipping rates in order for customers and your company to be more efficient.
After that, figure out how you will charge shipping.
It is nice to offer your customers multiple shipping options, and be transparent about shipping times. These are just six options that you can charge shipping fees.
- All orders eligible for free shipping
- Some items qualify for free shipping
- Customers who reach a minimum order amount are eligible for free shipping
- For your most loyal customers, you get free shipping
- Flat rate shipping to all customers and products
- Shipping is calculated by order based on factors like shipping distance and cart cost.
Which should you choose?
Let’s discuss your ideal shipping plan.
All Orders Ship Free
It is tempting to offer free shipping in order to compete with Amazon, Walmart, and other large companies. But, Amazon does not offer free shipping to all customers. Prime Members include shipping costs. Amazon even finds a way for customers to pay shipping costs.
It is difficult to get free shipping on everything, overall. Before you make this decision, consider the following:
- Is your third-party fulfillment company offering free or low shipping?
- Are your competitors offering free shipping? You may be able completely to rule out competitors who offer free shipping
- Are you able to spend the time and money necessary to promote this product?
- Is your company able to pay for a free shipping trial?
Some items qualify for free shipping
Consider the following questions and considerations when you think about this strategy:
- If you have many products, this may be possible.
- Advertise free shipping on many products and you won’t lose any money.
- This option could confuse customers. Be clear about which products qualify for free shipping. Consult a lawyer.
Customers who reach a minimum order amount are eligible for free shipping
This is quite common. These are some of the things you should consider:
- This system encourages bigger purchases.
- It can still be advertised as a benefit.
- This is what customers are used to seeing.
- To see if this strategy is working, you must test it.
Your most loyal customers get free shipping
Even though it isn’t as well-known, loyalty shipping free of charge has its perks.
- To ensure transparency, the offer is made upfront.
- You don’t have to risk breaking the bank.
- Loyal customers receive the benefit which means that they spend more money.
- It is important to test the loyalty program on your site.
Flat rate shipping to all customers and products
Flat rate shipping can be terrible for certain companies, but it is great for others.
- This is the easiest strategy to establish.
- Most carriers provide flat rate shipping.
- Customers are often confused.
- This is a great way to save money.
- Flat rate shipping is a bad option for many customers because it doesn’t reward anyone.
- Your marketing doesn’t have to be alluring.
Shipping is calculated per order
This is a common practice among online retailers:
- This ensures that all orders are fully covered by shipping costs.
- Many carriers offer real-time API systems that allow you to calculate shipping costs for customers.
- Customers don’t like it as much because shipping costs are higher.
- This is one of the most difficult systems to set up and explain. This should not be marketed as a shipping perk.
Consider Other Questions for Shipping Costs
Shipping was not always so easy. It’s not easy to determine the best shipping method for your company. However, there are many options available to help you reduce shipping costs and ensure your customers receive their products on time.
Shipping can bring up many other questions. These FAQs will help you to answer them.
Is it possible to set up a flat rate shipping structure?
Absolutely. Most carriers, especially USPS, have pre-measured boxes. Flat rate shipping costs can be arranged if all your products fit in those boxes.
Which Carrier Is the Most Affordable?
It all depends on what your circumstances are. The USPS is the best shipping option in the United States. UPS is known for offering cheaper shipping rates for larger packages. International shipping is often handled by FedEx or DHL.
This being said, it’s important to do your research because there is no one carrier that is cheaper than another.
What is the Cost of Third-party Fulfillment Businesses?
To find out the exact price, you will need to call the company. Some companies have pricing information on their websites.
We have reached out to some of the most well-known fulfillment companies so you can view pricing . We found that the cheapest option starts at $1 per monthly. You can get more value for your money with options like ShipBob or Station starting at $25 per month
Have any other questions about shipping costs?
We’d love to hear from you about shipping costs and delivery times. Please leave a comment below. We love to hear about shipping experiences from ecommerce professionals.