There are many things to think about when making a budget for your eCommerce business. Most entrepreneurs first plan for costs like making and marketing their products, which take up a big chunk of the startup budget.
But shipping and fulfillment is a big cost that often surprises people who are just starting an online business. It can make or break your business in the long run. Set aside enough money in your budget to cover shipping and fulfillment costs so you can get your products to your customers without going bankrupt.
In this guide, we’ll talk about how to figure out how much shipping will cost for your online store. This will help you make a realistic budget and avoid unpleasant surprises down the road.
How much does it cost to ship?
Shipping costs are the fees that companies like UPS, FedEx, and DHL charge to move your goods from where they are made or stored to where your customers live. These costs can vary a lot based on the size, weight, and distance of your shipment. Also, different carriers offer different services and features, which can also affect the price.
To get a good idea of how much shipping will cost, you need to think about all of the following:
- How big and heavy your items are
- How far the package will have to go
- How it will be sent (by air, ground, or ocean)
- How you will package your goods
- How many items are being shipped
- How you choose to handle insurance and tracking
Why is it important to be able to figure out how much shipping will cost?
If you sell things online, you need to know how to figure out your shipping costs so you can add them to the price of your goods. Customers are usually willing to pay for shipping, but only if the price is fair. If your shipping costs are too high, it might be hard for you to compete with other companies in your niche. Also, if you don’t add shipping costs to the price of your goods, you may lose money every time you sell something.
Besides making sure your prices are competitive, there are a few other important reasons to figure out your shipping costs correctly:
To make a budget for your business that is accurate,
If you don’t include the cost of shipping in your budget, you might not have enough money to pay your bills. You can’t say enough about how important it is to know your shipping costs if you want to keep your business going. Including shipping costs in your budget will also help you figure out your margins and how profitable your business is.
To avoid charging your customers too much or too little,
If you can’t figure out how much to charge for shipping on your own, you might overcharge or undercharge your customers. If you charge too much, you won’t be able to compete, but if you charge too little, you could lose money. In either case, it’s important to get your shipping costs right if you want to set the right price for your products.
To pick the right shipping company.
There are a lot of different shipping companies to choose from, and each one has its own services and features. You need to know how to figure out your shipping costs so you can choose the right shipping company. Because of this, you might end up paying too much for shipping or choosing a carrier that doesn’t offer the services you need.
How to figure out the cost of shipping
Now that we’ve talked about why it’s important to know how to figure out your shipping costs, let’s take a look at some of the most important things you’ll need to think about.
How big and heavy your items are
When figuring out how much it will cost to ship your items, the first thing you need to think about is their size and weight. Most shipping companies charge you based on how big your package is, so it’s important to know how big your items are before you start.
You will need to measure the length, width, and height of each item to find out how big it is. Once you know the size, you can use a shipping calculator to figure out how much it will cost to ship. How you package something will also depend on its size and weight. For example, if you’re sending something heavy or big, you might need to use a different kind of packaging than if you were sending something small.
How far away the shipment will go
The distance your shipment will go is another important thing to think about. The cost of shipping will go up the farther away you are. When figuring out how much shipping will cost, you need to think about both where the shipment is coming from and where it is going.
Depending on where in the country you live, the shipping company you choose might also have different prices. UPS, for instance, charges different prices for packages going to and from Alaska and Hawaii. You can use an online tool like Google Maps to help you figure out how far your shipment will go.
How you package your goods
Your shipping costs will also depend on how you package your items. When deciding how to package your items, you will need to think about their size, weight, and the distance they will travel.
For example, if you’re sending something big and heavy, you might need to use a different kind of packaging than if you were sending something small. The size and weight of your shipment will also depend on the type of packaging you use, which will affect how much it costs to ship.
Whom you choose to ship with
There are a lot of different companies that ship things, and each one has its own services and features. Your shipping costs and how long it takes to get your package to its destination will depend on the carrier you choose.
Some shipping companies, like USPS, offer flat-rate shipping, which means that you can send a package for the same price no matter how heavy or far it is. Other companies, like UPS and FedEx, charge you based on how far and how much your package weighs.
How quickly you want the package to arrive at its destination.
Your shipping costs will also depend on how long it takes for your package to arrive. If you need your shipment quickly, you might have to pay more for shipping. For example, USPS has options for faster shipping than their standard shipping, which is called “expedited shipping.”
What You Need Services
The cost of shipping will also depend on what services you need. Some carriers only offer the most basic shipping services, while others offer extras like tracking, insurance, and confirmation of signature.
If you’re sending a high-value item, you might choose a carrier that offers insurance in case the item gets lost or broken during shipping. If you want to know where your shipment is, you’ll have to choose a carrier that offers tracking services.
Your shipping costs will also change based on the service you choose. For example, USPS has shipping services for first-class, standard, and urgent mail. The prices and times for each service are different.
How Useful the Information Is
Your shipping costs will also depend on how much your package is worth. If you’re sending a high-value item, you might choose a carrier that offers insurance in case the item gets lost or broken during shipping.
For example, if you’re sending a piece of jewelry worth $500, you might want to insure the shipment for the full amount. Most of the time, shipping insurance costs about 1% of the value of the item.
Costs for problems that come up out of the blue and shipping fees
You may also have to pay extra for things that come up out of the blue, like weather delays or missed pickups. You may also have to pay extra for services like Saturday delivery or re-delivery.
The best way to avoid being charged for things you didn’t expect is to plan and think about all possible costs. This will help you plan for the cost of shipping and keep you from being surprised.
Using Shipping Cost Calculators
A shipping cost calculator is one of the best ways to figure out how much your shipping will cost. You can use shipping cost calculators to compare the rates of different carriers based on the size, weight, and distance of your shipment.
This can help you compare the prices of different shipping companies and find the best one for your needs.
Online, you can find a number of shipping cost calculators.
Shopify Shipping Calculator
Shopify is great because it has a shipping function built right in. With Shopify Shipping, you can save time on order fulfillment because it’s all in the same place as your inventory management, invoicing, customer information, and product management. When everything is in one place, it’s much easier to get things done and keep track of them.
If you use Shopify to run your online store, the Shopify Shipping Calculator is a great choice. To use the Shopify Shipping Calculator, you need to add your product’s weight and size to its page. After that, the shipping calculator will make shipping rates for different carriers automatically.
You can also add more than one item to your cart and use the shipping calculator to compare the prices of different carriers. With Shopify, you can get up to 88% off the best rates from USPS, UPS, and DHL.
Cost of Shipping Calculator from USPS
The shipping calculator from USPS is one of the easiest calculators to use. Even more so, since all you need is a ZIP code. You can choose from pre-set rates, or you can figure out shipping by entering the exact dimensions. With this calculator, you can find out how much Priority Mail, First-Class Package Service, and Parcel Select shipping will cost.
Cost of Shipping Calculator for UPS
This calculator makes it easy to compare your packages and freight’s different shipping options. Just type in some basic information about what you’re sending, and the calculator will give you results for different services, like next-day air or UPS Ground. And with UPS Small Business, you can get shipping rates that are even cheaper.
Cost of Shipping Calculator for FedEx
FedEx’s international shipping calculator gives you a few different ways to figure out how much your rates will be. You can use either the “quick quote” or “advanced quote” functions. For the quick quote function to work, you must enter the origin ZIP code, the destination ZIP code, and the weight of the package. FedEx is helpful for online shops all over the world, especially when sending items to countries far away.
Cost Calculator for Shipping with DHL
DHL is the best shipping and logistics company in the world, so it’s on this list. But, like the others on this list, DHL needs an interactive shipping calculator. You have to go to its website to ask for a quote on shipping costs. So, the process works the same as the other calculators in terms of the questions asked and the results given. You can easily move forward with your quote after asking DHL for more information.
Customers should be given choices for shipping
Don’t charge for shipping
Free shipping is a popular way to ship. Customers love it when they don’t have to pay for shipping because it saves them money. Customers are more likely to buy when they think they are getting a good deal.
To offer free shipping, you’ll need to figure out how much it costs to ship your products on average and add that amount to the price of your product. This means that the cost of shipping is added to the margin of your product.
Shipping That Was Customized
Calculated or Bespoke shipping is a type of shipping where the price is based on the weight, size, and location of the package and the customer. It’s an easy system to use, especially if you only have a few products to sell. The downside is that it will take some time to figure out how much each product will cost to ship. When your customers get to the checkout page, they’ll know how much they’ll have to pay. This might make some of them give up on their carts because they’re frustrated about not knowing prices.
Shipping for a flat rate
Flat rate shipping is when you charge the same price for shipping a product no matter how big or heavy it is. This is a good option if you want to make sure that your customers know the total cost of their purchase right away. This can help reduce the number of customers who abandon their carts. The downside is that you might lose money on some orders if the shipping costs more than what you charged.
Offer delivery in your area
If you run a small business and want to deliver to customers in the same town or city the next day in a quick and reliable way, you might want to think about local shipping. You can use a mileage radius or a list of zip/postal codes to define your delivery area. Customers who live in this predetermined area can choose “local shipping” as their preferred shipping method at checkout. Local delivery is a great way to get to know your customers and give them the best service possible.
How to lower your online store’s shipping costs
It can be easy to cut your shipping costs. You can cut the amount you spend on shipping each month in a few different ways.
Cut down on shipping costs by putting your stock near your customers.
If most of your customers are in the same country or region, you might want to spread your stock to more than one place. So, you can ship items to customers from a place closer to them, which saves money on shipping.
Use boxes that are the right size.
Size really does matter when it comes to shipping costs. Because of this, it’s important to use the right size packaging for your products. This will not only save you money on shipping costs, but it will also use less space while in transit.
Getting shipping rates for less from carriers
Getting discounts from carriers is one of the best ways to cut down on shipping costs. Carriers like UPS, FedEx, and DHL give online stores discounts if they send out a certain number of packages each month. These discounts can range from a few percentage points to more than 50%! To get these discounts and meet the required shipping volume, you’ll need to sign up for a business account with the carrier.
How to Ship Items to Customers Easily
Now that you know the different shipping options for ecommerce businesses, it’s time to learn how to ship products to customers. Shipping things doesn’t have to be hard; you can get started by taking a few simple steps.
Design your packaging materials
The first thing you need to do is design your packaging. This includes everything from labels and packing slips to boxes and envelopes. When making your packaging, you should think about the size and weight of your products and how you’ll ship them.
Put your order together.
Once you have everything you need to package your order, it’s time to do so. Make sure to use a lot of padding and support to keep your items safe while they’re being shipped.
Print the label for your package.
After your items are packed and ready to go, you need to print your shipping label. Shipping labels can be bought from carriers like UPS, FedEx, or DHL. Or, if you use USPS, you can print labels right from their website.
Set up when your package will be picked up or dropped off.
The last step is to set up a time for your package to be picked up or dropped off. If you use a carrier like UPS or FedEx, you can schedule a pick-up right from their website. Or, if you are sending the package through USPS, you can drop it off at your local post office.
The End of the Story!
Costs of shipping are a big part of running an online store. You can keep more of your hard-earned profits if you know about the different shipping options and how to cut your shipping costs. Do you know of any ways to cut down on shipping costs? Please tell us about them in the comments!
