Trying to calculate shipping costs can make any eCommerce merchant delirious and feel like giving up. But it doesn't need to be that way. If you need to know how much it'll cost to ship a package internationally, or need to learn how to estimate shipping costs to send products to thousands of customers worldwide, then we've got good news.
It's 2020, and that means there are multiple tools available for you to calculate your shipping costs in minutes.
In this post, we'll share the basic information you'll need to get a quote, additional services and requirements that may impact the price of your shipment, and provide a few useful tools that'll help you learn how to calculate shipping costs in a just few clicks.
What Information Do You Need to Calculate Shipping Costs?
Calculating shipping costs can get complicated, with numerous factors potentially impacting the final cost. However, there are four primary pieces of information that you will need every time when trying to estimate shipping costs for a package. If you have this information, you’ll generally be able to get an accurate quote. Here are the four variables that you should always consider:
Shipping Point of Origin and Destination
How far a delivery travels from the point of origin to the shipping destination is a key factor in calculating the cost. In general, the further away, the higher the price. Couriers using shipping zones as a way to measure the distance a package travels from the point of origin to the final destination. In the United States there are currently eight shipping zones that are broken up by zip code.
Couriers like USPS, UPS, FedEx and DHL base their rates on the shipping zones which can be found on their respective websites.
As obvious as it might sound, you need to accurately understand where you are shipping from and the destination of the package before you can start to calculate the costs.
The Weight of the Package
The dead weight of a package is how heavy it is. Put it on a scale, get the weight. The heavier the package, the more it will cost to ship. However, there’s also dimensional weight. This gets more complicated, and will be based on the dimensions of the package that you are using to ship the goods.
The dimensions are the length, width, and height of the package used to ship the goods. Packages come in sorts of dimensions, so it’s important for eCommerce merchants to understand how this can impact the cost. Especially since couriers also charge by dimensional (or volumetric) weight. Basically, this is the amount of space that a package takes up on the delivery vehicle.
To determine the dimensional weight, couriers multiply the length, width, and height of your package, then divide this number by a cubic divisor of their choice.
It's a good idea to learn more about dimensional weight and how to optimize your packaging to reduce shipping costs. These small steps can go a long way in reducing your shipping costs and get a better estimate, which will benefit the bottom line for your eCommerce business.
Delivery Times for Shipping
The delivery time is how fast a package or shipment will arrive at the destination. This can vary from overnight to over a month, with price points everywhere in between, depending on the distance the package is traveling.
If you want a package delivered overnight, it’s going to cost much more than using a standard 3-7 day ground service. Before you decide to estimate shipping costs, you will most certainly need to know how fast you want your packages to be delivered.
Shipping Cost Comparison
To give you an idea of the the variety of shipping prices, we’ll calculate shipping costs for a 4lb package with box dimensions of 8 11/16" x 5 7/16" x 1 3/4"
|Courier||Service||Delivery Time||Shipping Cost|
|UPS||2nd Day Air||2 days||$21.25|
|FedEx||2 day||2 days||$52.62|
|USPS||Priority Mail 2nd Day||2 days||$23.15|
What Can Affect My Shipping Costs?
International shipping can get complex because of the variety of added fees based on the destination country, the size and weight of the package, and the delivery timeframe.
It's important to conduct diligent research and calculate shipping costs accordingly so your customers are not caught off guard with surprise fees, which are one of the primary reasons for cart abandonment in eCommerce.
Here are the four primary services or requirements that will affect the price of your shipment:
1. Shipping insurance
If you're shipping expensive merchandise, you'll want to consider purchasing shipping insurance to protect against lost, stolen or damaged goods during shipment. Most shipments arrive safely, but mistakes happen, and if you're shipping high value products, replacement inventory can eat into your profits, so it's best to be insured.
Couriers usually offer this at a very small fee - on average, 3% of the declared value of your shipment. Another option is purchase shipping insurance through third party vendors, which tend be more affordable. Easyship customers can easily add insurance to shipments through the Insurance Settings on their dashboard.
2. Shipping-related charges
There are sometimes additional charges related to the logistics of shipping and delivery. Due to the wide variety of variables, including delivery location, type of goods shipped and timing of delivery, there are times when couriers will add additional charges. Here are a few common shipping related charges to understand:
- Pickup location: Sometimes referred to as a “remote area surcharge” or “extended area surcharge,” these fees will be added if the delivery or pick up are in locations not regularly serviced by the courier. Additionally, some couriers will include charges for pickups at residential buildings.
- Fuel surcharge: Express couriers will add a fuel surcharge which is calculated as a percentage of the shipping costs. This can vary from country to country, week to week and month to month, as fuel costs are constantly in flux. This is one to pay particularly close attention to as the charges can add up quickly.
- Fees for mistakes: We're human, sometimes we make mistakes, but when it comes to shipping, it can cost us with an “address correction fee”, “delivery reattempt fee” and even “return fees.”
3. Parcel handling-related charges
There are time when you'll incur additional fees due to the contents of the parcel, the packaging, weight and dimensions.
- Dangerous Goods are anything that a courier deems dangerous to handle like chemicals, needles, guns and most importantly for eCommerce merchants, lithium ion batters. Dangerous goods are defined internationally by IATA, so that's the best resource to find an official list.
- An additional fee can be applied if the parcel exceeds the standard dimension or weight, or if the package is made of material such as wood, metal or if it’s cylindrical. It's best to check on these fees before purchasing any boxes or containers.
4. Duties and taxes:
When you ship something to another country, you or the recipient of your shipment may be asked to pay additional duties and taxes before the shipment is delivered. Duties and taxes may apply based on what you are shipping and its value. These can get complex and vary by country. There are two types of duties you want to understand as they are often the source of hidden fees.
- DDU shipments (Deliver Duty Unpaid): With the duty, the recipient is responsible for paying in order to release the package from customs. However, as the sender, you are still responsible for paying if the recipient refuses to pay those taxes or declines the package. As a merchant, this is why it's best practices to remain as transparent as possible with your international shipping costs. It saves you money.
- DDP shipments (Deliver Duty Paid): With this duty, the sender is responsible for paying the fee, but it's a more complex calculation. Couriers will charge a “DDP handling fee” for paying the taxes and duties on your behalf when the package arrives at the destination country. A “disbursement fee” is calculated based on the percentage of the taxes and duties. Yes, it is complex, but with this method, you'll at least know that the shipment won't be returned because the recipient doesn't pay or refuses the package.
- The couriers will charge you an additional fee for paying those T&D on your behalf when the shipment arrives at the destination country. In addition to the fixed “DDP handling fee” for taking care of those taxes & duties, you can also expect a “disbursement fee.”
- Under-declaring the products on the commercial invoice can lead to additional fees and long delays in delivery. If the custom clearance agency suspects the declared value is below market value, they will often request a new invoice, which can lead to additional fees. If it's not received in the requested time frame, there maybe additional warehouse fees for holding the package. Additionally the courier can charge you for under-declaring the contents of the package. So, this is one area where you're need to be particularly careful and pay attention to the details.
Using a Shipping Cost Calculator
The quickest and most efficient way to learn how to calculate shipping costs is to use a calculator. USPS, UPS, and FedEx each have their own shipping calculators that allow you to get an estimate for their various services.
You’ll need to be prepared with the basic information discussed in more detail above: shipping point of origin and destination, package dimensions and weight and delivery time.
The Easyship Shipping Cost Calculator provides quick domestic and international shipping estimates with over 250+ couriers.
Here's what you need to find the fastest and cheapest options:
- Shipping origin and postal code
- Shipping destination
- Weight of your item
You'll also be able to see the delivery timeframes and pickup/dropoff options for each service.
eCommerce Businesses Can Save Money With Easyship’s 3PL Services
Growing eCommerce businesses that are processing over 100 shipments per month should consider a third-party fulfillment (3PL) provider to save money. Easyship has warehouse partners all over the world that can provide fulfillment services and allow merchants to more affordably reach international customers.
A Third Party Logistics Company (3PL) is an order fulfillment company responsible for storing your goods, processing your incoming orders (pick & pack), and shipping them on your behalf
Here are the top reasons why you should consider a 3PL:
- Ship from multiple domestic and international warehouse locations, which will provide faster and more timely service to your customers.
- Outsource picking and packing to professionals, freeing up time for you and your team to focus on growing your business.
- Streamline fulfillment and shipping costs, rather than calculating them based on your own time commitment.
- No need to learn complex logistics and fulfillment systems.
Make Easyship your shipping and logistics partner, so you can focus on growing your eCommerce business!
Last update July 31, 2020 to reflect new information