How to Calculate Your Shipping Costs Easily?
Which merchant likes to spend hours and hours calculating shipping costs and analyze them to choose the most convenient option? No one, right?
Customers always need to get the cheapest and quickest shipping options. Undercharging for shipping will be a huge loss for your eCommerce business as well as it will negatively affect your sustainability in the competitive industry. But, what if you overcharge?
Customers will definitely leave you to find another merchant who is ready to ship at a lesser cost or sometimes even free of cost!
So, it is all about keeping a balance. How?
It is important to check the shipping options which are reasonable for customers. At the same time, it should be a convenient service, which delivers the packages in the right time frame.
This write-up intends to help you outline the key factors that determine how to calculate shipping costs, the additional charges you may encounter, and to check if there is any tool to calculate the shipping cost quickly to save your money and time.
What are the key factors that determine shipping rates?
There is a list of factors that determine the cost to ship products from one destination to another. Multiple points will be considered while calculating shipping rate like the distance between the origin and destination, weight of the package, delivery time, etc.
There are 6 factors that are usually taken into consideration while calculating the shipping rates.
1. Distance between the origin and destination addresses
The farther the packages need to be traveled, the shipping cost will be increased accordingly. As you know, it will cost a high rate when you need to ship internationally. The rates will be comparatively less for domestic services.
Usually shipping carriers like DHL, FedEx, UPS, and USPS consider ‘shipping zones’ to calculate shipping costs.
Based on the source and destination addresses, you can calculate the shipping rates of required services.
2. Weight and dimensions of the package
The heavier your package, the higher the cost will be. The shipping carriers will consider the height, weight and length of the packing boxes to calculate the shipment. These dimensions are considered to check how much space it would take in the shipping vehicle. Based on that, they will charge the rate. The cost will increase according to the volume it would take in the vehicle. Hence, try maximum to optimize the box sizes.
For shipping items that have unique shapes require special boxes, the charges will be different from the default options available with carriers.
3. Speed of delivery
These days, customers can determine when they need the delivery of products.
They can send a last minute anniversary gift overnight, or purchase a favorite shirt in their wishlist after 2 weeks. That is up to the convenience of the customers.
There are quite a long list of services available with each shipping carrier from which you can choose one based on the number of days it would take to deliver. For faster delivery options, the shipping cost will be pretty high compared to late deliveries.
4. Shipping multiple packages
When a customer purchases multiple products, packing them together in a single package will save your money. But sometimes, it may go wrong if you pack some products together. For instance, packing perishable and non-perishable products in a single box is not a good idea. In such scenarios you need to ship them as different packages.
5. Shipping products in specific countries
There are some restrictions in specific countries to ship certain products. Also, you are required to pay special duty or tax for shipping certain products to specific countries. The additional costs will vary from one country to another.
6. Special locations
It is quite easy to ship products to cities, and the locations in which the shipping carriers provide their services.
But, if the source and/or destination location is in a remote place and the carriers hardly provide their service in that location, there are chances of charging additional costs like ‘remote area surcharge’ or ‘extended area surcharge’.
What are the surprise charges which can hit your shipping rates?
There will be expected and unexpected charges, duties and taxes when you ship products inside your country or internationally.
Some charges need to be strictly paid by following the rules and regulations in specific countries. Some charges will be unexpected and you may need to pay additional charges than expected.
Let us check 4 charges that affect your shipping cost.
1. Insurance and tracking
Sometimes, the products may get broken or damaged while shipping. Replacing the products will be a huge loss for you. Hence, the best solution is to get your shipping insured!
Many carriers offer insurance coverage at minimum rates. But, you can also go for third-party party vendors to purchase shipping insurance at an affordable price.
Some carriers provide tracking options as a complimentary service. But for some services, it is considered as an additional cost since the option is a deal of security for you and the customers to check the status of the shipment as and when required.
2. Customs and duties
The biggest challenge of selling across international borders is the unpredictable customs charges. It is hard to know how much they will charge when the packages arrive in the destination country. And, it varies from country to country.
There are ‘DDU shipments (Delivered Duty Unpaid)’ and ‘DDP shipments (Delivered Duty Paid)’.
Delivered Duty Unpaid: In this, the shipping cost needs to be paid by the seller which will include all other charges except the import duties and taxes of the destination country. Once the products are delivered to the destination, the buyer will be responsible to pay the import duty and taxes.
Delivered Duty Paid: In this, the seller needs to pay all the expenses to ship the products to the buyer’s doorstep including the import duty and taxes. Also, they need to pay the customs clearance, handling charge, and all other charges to deliver the products to the destination address.
If the custom clearance agency finds the imported product value to be less than the market value, there are chances that they ask for a new invoice. And, you may be required to pay additional fees. If they did not receive the new invoice within the time frame, you may need to pay additional warehouse fees for holding your packages.
3. Handling costs
There will be additional charges needed to pay for handling the products safely based on the nature of products, their weight, and volume.
Some products are dangerous to carry and handle like chemicals, weapons, guns, etc. So based on the effort it needs to ship those products, there will additional handling costs to be paid.
4. Other shipping charges
Sometimes, you may need to pay additional shipping charges based on the delivery location, fuel rate in a country, etc.
As we have discussed before, there are chances of ‘remote area surcharge’ or ‘extended area surcharge’ if the carrier does not provide services in the pickup and destination locations.
There is a ‘fuel surcharge’ in express deliveries, which will be added as a percentage to the shipping price. This charge is flexible as the fuel charges will fluctuate over time and will vary from country to country.
If you did not write the addresses properly or made a mistake from your side, there can be some charges that will surprise you like ‘address correction fee’, ‘return fee’, or ‘reattempt fee’.
Okay, is there any quick solution to calculate the shipping cost by considering all the above points we analyzed?
Yes!
Calculate Your Shipping Costs Easily
The easiest and quickest way to calculate the shipping cost is to use a ‘shipping calculator’. Shipping companies like DHL, UPS, USPS, and FedEx offer their dedicated shipping calculators.
But, if you need to analyze and compare all available shipping costs for multiple shipping carriers together (DHL, UPS, USPS, Australia Post MyPost Business, and FedEx), you can definitely have a look at the ReachShip shipping calculator tool!
All you need go through is 4 simple steps:
- Add the ‘from’ and ‘to’ addresses.
- Choose the shipping carriers.
- Enter the weight and dimensions of your packages.
- Get all available shipping rates of selected shipping carriers for the entered locations.
That’s it! Also, view expanded details of each service, sort them to pick the best price quickly, and check the prices in other currencies as per your convenience.
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