Overview
Technology has conveniently branched its way into every aspect of our lives, including the world of the supply chain in e-commerce. The shipping cost calculator is a result of technological advancement in this sector. It is a handy software solution designed to provide easy visibility about shipping rates and other details to viewers at a glance. Shipping calculator helps automate this process by combining relevant price-serving requests that they receive from customers.
The most important aspect of a shipping cost calculator is that it incorporates all components involved in the pricing response. It can include topics not only about pricing but also operational timing details, shipping services available, and origin locations.
Shipping calculators might not be readily available on the internet. Still, the ones offering even the most basic functions help optimize your search for suitable shipping options. As an e-commerce platform, you need to have a holistic understanding of the basic functionality of shipping calculators. It can be a powerful tool for finding the best shipping solutions and rates.
This article gives you a complete idea of what a shipping calculator is and what you should look for in a standard shipping price calculator.
What is a Shipping Calculator?
Shipping calculators are software solutions designed to calculate shipping costs. The tool shows customers the approximate shipping rates and service details in an understandable format.
Shipping calculators help automate manual processes that freight forwarders are responsible for when they quote a price after a customer puts in a service request. Developing shipping calculators can be challenging because developers must consider every factor in preparing price responses. This can include pricing and operational information such as the location of origin, timing, shipping services available, and destination facilities.
This unique online digital solution simplifies a freight provider’s job and allows them to tend to more pricing requests in less time, thereby cutting down the workload. However, they can also potentially increase market transparency, which is something that every provider might not desire.
Components of the shipping calculator: The output a shipping calculator gives depends on the user’s input. Calculating and providing relevant shipping choices is the basic function of this calculator. Another important role is to include the cargo’s location, destination, components, and when it is ready to ship.
More advanced shipping calculators can offer different prices for different services and levels. It usually includes customs clearance charges and charges associated with pick-up and delivery.
How Does A Shipping Calculator Work?
The input entered by the users determines the output provided by the user. The shipping price calculator utilizes basic information to provide you with an approximate or accurate amount for the shipping prices. This also includes the cargo’s location and where it is heading. The nearest available shipping date, as well as the cargo type, is provided. Some shipping calculators have detailed settings allowing users to request various available service levels per the price. This is inclusive of pick-up and delivery components or customs clearance if required.
Several shipping calculators are involved in keeping associated forwarders in a contractual agreement to deliver service requests from users. This makes it a dynamic tool aiding users in remembering the new services and shipping rates. Based on its dynamic presence, it can add and remove new providers.
While developing a shipping cost calculator, the developers should keep the above principles in mind and consider every element, including the shipping calculation, display, and comparison section, for accurate or the most approximate results.
How To Calculate Shipping Costs?
Shipping costs depend on diverse factors, and shipping cost calculators are designed with several principles in mind. They have been listed below:
Package dimensions
Dimensional weight of the package is the most common pricing technique that major carriers use. Often referred to as DIM as an abbreviation, it is a mode for calculating shipping amounts and is used widely. We can calculate the package size along with the DIM by multiplying the package length, height and width, further dividing it using a DIM divisor. Certain shipping companies make DIM comparisons considering the actual weight. Then we can charge the highest of the two as per the billable weight.
Package weight
The package weight does not require any calculator or DIM Divisor. As outlined in the above section, the shipping cost calculation utilizes the highest of the two sections. The heavier or bigger the package, the more the shipping cost.
Shipping destination
Shipping zones are integral to calculating shipping rates. Standard shipping zones take the distance between one point to another when calculating shipping rates. Shipping zones depend on the point of origin, which is why shipping from various points of origin to one particular destination can fall under different shipping zones. The price depends on the extent of the shipping zone. Higher shipping zones call for a higher shipping rate.
Value of contents shipped
High-grade, expensive shipping components must be insured to ensure 100 per cent safe delivery. There are countless shipping insurance companies available, and they offer reimbursement to people whose parcels have been lost, stolen or damaged in transit. This helpful service increases the overall shipping cost significantly.
Delivery times
Online platforms, like Amazon, have raised the bar high regarding the speed of shipments. However, this can be expensive, and customers might opt for premium shipping options for faster delivery. Premium shipping tends to get higher when the zones increase. This shipping mode involves expedited air shipping, which can be quite costly.
Unexpected problems
You can never expect your shipping strategy to be perfect, no matter how much you try to optimize it. You are bound to experience problems like lost or stolen shipments, delays that are out of your control, damaged goods, and the like. As a freight company or an e-commerce platform, ensure you perfectly strategize the areas you can control.
For example, you can focus on optimizing your customer service to handle these situations if and when they happen. Customers, despite being disappointed, will be more likely to understand if they get enough clarity about what happened with effective communication between your team and them. Unexpected problems will cost you a significant amount of money. Hence, leaving some space in your budget to prepare for them is essential.
How to Determine Shipping Costs Strategically?
Decide on a pricing strategy
Without flat rate shipping, heavy items will potentially cost more than the usual standard shipping amount. Always decide on an effective pricing strategy, such as investing in a postal scale that will help you approximate the shipping cost. You can even purchase the right shipping labels by doing so.
Most of the time, carriers look at the dimensions of containers and determine the shipping rate. A bigger box containing a lightweight item might cost more because of the box’s extra space.
Select a carrier & speed
Shipping is the backbone of e-commerce businesses. Not all shipping carriers are made equal. You may find better options in some more than others, depending on the unique needs of your business. Location, shipping rates, and packaging actors are among the factors in this case. Do your own research or determine which shipping carrier works best for you via trial and error.
Customers prefer choices that you can offer depending on how big your online store is and the kind of product you usually transport. You can also opt for multiple carriers. Ideally, your store might need around two to six carriers to successfully ship products, keep up with the delivery speeds, and reduce shipping rates. Another great idea is to hunt for bulk discount services or programs that several platforms offer. Availing of third-party-package insurance services is much cheaper than the shipping insurance your shipping carrier might provide.
Calculate Costs for Selected Carrier & Speed
Without shipping, an e-commerce store cannot exist. Therefore, store owners must ensure they aren’t incurring unnecessary losses in order fulfillment. From perfectly measuring weight and dimensions to determining the shipping costs, all fall under the different strategies used for optimizing the shipping methods. One integral factor that store owners need to consider is to avoid paying shipping fees out of pocket.
In order to effectively strategize this process, you will need to determine the cost of shipping several combinations of products. As an e-commerce store owner, your list of boxes or package sizes needs to be easily accessible to avoid complicating the calculations.
Additional Charges to Add
Retailers can easily apply for surcharges to cover any expense under the sun. The most common surcharges are listed below:-
Service to remote areas: You will need to pay extra if you want to deliver an item out of its designated delivery range. Remote areas are often not easily accessible, and delivering to such areas will take longer than the average time. Some government entities, like USPS, must even serve the remotest of areas.
Ground fuel or air fuel surcharges: Add these fees to shipment rate itself in order to cover a fuel cost of the carrier. It can range from 4-10% depending on the time of year. These surcharges are adjusted weekly depending on the most recent cost of fuel.
Accessorial surcharges: If shipments need to use additional machinery or services, you will have to pay to cover all the accessorial fees. Accessorial fees include services like liftgate service, address correction or re-delivery.
Expedited delivery surcharges: A time-sensitive shipping mode will cause you to pay extra for the surcharge for the service. Such surcharges can include common things like weekend delivery surcharges, overnight shipping surcharges or express service surcharges,
Additional handling surcharge: Shipping of large or fragile items requires special handling and this comes with an added cost. Other than just paying for the actual delivery, these are the surcharges that typically cover special treatments rendered to these packages.
Signature-on-delivery surcharge: Security requirements like a signature at pickup for items like medicines and electronics will enable carriers to charge an extra fee for performing this service.
Residential surcharges: Packages requiring shipment to residential areas comes with a fee. Commercial areas highly concentrate on making them efficient delivery hubs rather than residential areas. For such areas, delivery agents might need the extra time required to locate, park, and deliver the package. This extra effort comes with an additional residential delivery fee.
Declared value surcharges: Shipping high-priced goods might require you to pay a surcharge for the liability. This is fee is typically different from the insurance surcharges.
Print return label surcharges: Shippers provide return shipping labels in their packages. Customers who lose them might be charged extra for printing a return label surcharge.
OS Extra Surcharge: These are additional charges that cover everything else. OS refers to other shipping, and these surcharges can include international shipping fees, freight fees, carton neutral fees, and the like.
Examples of Ecommerce Shipping Costs
A large population of shoppers want affordable yet relatively fast deliveries every time they shop online. As an e-commerce platform, you must ensure that you offer an affordable standard shipping rate.
Below we have provided you with a handy table highlighting the most common e-commerce shipping costs:-
| Cost | Description |
| Carrier cost (shipping label) | This is the amount that carriers charge for postage to ship a package from one point to the destination. |
| Packaging cost | The costs associated with ensuring the item’s safety with packaging items like boxes, tape, poly mailers, dunnage, and the like, all fall under packaging costs. |
| Fulfillment cost | This cost is associated with labor to pick, pack, and ship the product. |
| Other costs (optional): Insurance, signature required, etc. | These are deemed as extra incurred depending on what item one ships as well as the added requirements you can have. |
| Overhead costs | These costs are fixed costs related to fulfilling and transporting e-commerce orders on your own accord, be it from your home or your own warehouse. |
Conclusion
Popular shipping carriers have their own exclusive shipping calculators for guiding companies in their payments for availing of their shipment services. Online calculators are not reliable when it comes to finding rates. These shipping cost calculators are excellent when you need to compare the average rates depending on what you plan to ship. Shipping calculators can give you a basic idea of which shipping carrier is the best to run your business.
FAQs
What is volumetric weight?
Volumetric weight is the overall size of a package, and you can measure it in volumetric kilograms. You can calculate volumetric weight after multiplying the parcel’s length, height and width, and then dividing the figure by 5000.
How do you calculate shipping on an item?
First, add up your order expenses to optimally calculate every order for every order. This includes everything you spend to acquire and fulfill orders packaging and shipping orders for a designated period. Then, you can divide the order expenses by the total number of orders you received in the same timeframe.
What is the cheapest way to ship a large heavy box?
For packages that weigh less than 70 lbs, USPS is the cheapest option. Consolidated freight is a cost-effective shipping mode for oversized packages for ones weighing over 70 lbs or deliveries not urgently needed.
How do you calculate postage by weight?
This still is one of the best and most common ways to come up with an accurate shipping estimate. However, weight is just one piece of information, and as an e-commerce provider, you can choose to cut down on the potential shipping cost. You also need a comprehensive understanding of the package dimensions, zip code of the destination, how quick you want the delivery to be and if you can afford purchasing insurance.
How do you calculate freight per item?
You can calculate the freight cost for every unit by dividing the net weight of the package by the number of units it can take to measure the package weight.
