Offering your customers the best shipping rates is essential in this highly competitive retail environment. The influence of shipping costs on purchase habits is sizable. In a recent study conducted by Convey of 2, U. Calculating shipping costs that work for you and your customers is critical.
To do this, you must understand the impact of shipping on product pricing and the factors used to calculate shipping costs. In this post, we walk you through both of these points and more, so you can calculate the best shipping rates for your business. These costs include but are not limited to:. As a retailer, you aim to get an item from your shelf to your customer in the agreed time frame, for the lowest price, and to ensure it arrives in good condition.
As a retailer, you need to look after your budget as well as customer needs when calculating shipping cost. Charge too much, and you might lose business to competitors. You might see many of your competitors offering free shipping or shipping deals. It would be best if you did the same. When you know your shipping costs, you can provide an instant shipping quote at the checkout which is now expected by consumers shopping online.
Often this requires work in the back-end, like setting up shipping rates for each product and inputting shipping zones. However, doing this will build trust and customer loyalty and ultimately drive more sales. Transparency about your shipping costs is also great for building brand loyalty.
Offering multiple shipping options at different price points is another way to lower cart abandonment rates. It makes customers feel like they are making the decisions and having a personalized experience.
There are three categories of shipping costs that we have outlined below. Calculated shipping is the easiest way of calculating shipping costs.
To get the price, measure the weight and dimensions of your package. The only downside to this method vs. However, committing time to do this is very beneficial because your customers will have a shipping quote based on the actual product they purchase.
Flat-rate shipping is where you charge one price for shipping regardless of shape, weight and size. The only time the price may differ is when shipping to different countries. With this method, customers can buy as much as they like and only pay one fee, which is set by you, the business.
To offer a flat-rate shipping service, you must calculate the average shipping cost for the whole company. Then, as your costs rise, you can increase the shipping fees, as they fall the cost to your customers will fall.
Free shipping seems to be offered by the majority of retailers, and for a good reason. Consumers love free shipping, and it can be a great way to increase sales. For the retailer, though, this can be a different story.
To offer free shipping retailers have two options:. It also makes the checkout process less complicated. These might include:. It also heavily relies on the country of export. In some cases, the costs of importing a product lies with the buyer, but sometimes it can be split between buyer and seller.
Any agreements like this should be made before sending goods. The four elements required to calculate shipping costs are shipping point and origin, package weight, package dimensions and expected delivery times. You can calculate the majority of postal shipping rates using these figures. With this information, you can compare shipping rates using a shipping cost calculator. Most shipping companies let you check shipping costs before sending a parcel.
If you send multiple items, you might qualify for bulk shipping rates or business shipping rates. Generally speaking, the further the package is traveling, the higher the shipping cost. This is especially true for international shipping rates. Shipping the same package to California will cost less than shipping to Europe.
The U. These in-depth guides cover exactly how much the marketplaces and payment processors like PayPal are going to take out of your final sales price. If more numbers are the last thing you need right now, find out how to improve your Amazon seller rating or eBay Feedback score so you can make more sales!
Free Trial Sign In. ChannelReply Blog. Postage Postage is probably the easiest cost to calculate. Those are your handling costs. How much will handling cost? Enter the answer on this line. How much will packaging cost? How much will shipping cost? What is the shipping and handling total? Add up lines 1 through 3. This is your total shipping and handling cost before fees, taxes, etc. Explore this Article methods. Related Articles.
Article Summary. Method 1. Take packaging into account. The type of packaging you use affects costs. Light packaging tends to be inexpensive. Smaller boxes add about a dollar to shipping costs, while light envelopes add about 25 cents.
While you can't know the exact cost until being charged at the post office, these guidelines can help you determine a rough estimate. Weigh your item. If you have a scale at home, weigh your item first.
Make sure you weigh the package as you'll send it out. The weight, in addition to other information, can be entered into an online calculator to help you estimate a rough shipping cost. Jot it down and gather other information before using an online calculator. If you're shipping through FedEx, for example, use a calculator on their website. Figure out postage. Postage varies depending on the type of package you're sending and your state. You must use an individual online calculator catered to your state to determine a postage estimate.
You enter information such as your zip code and the type of package you're sending. From there, you will get a price estimate for postage. Enter your information into an online calculator. You can find calculators online to help you determine shipping costs.
Try to find a calculator through the mail carrier you're using. For example, if you're using UPS, use their online price calculator. Enter the information you gathered, such as the package weight, to get an overall cost estimate. Budget to potentially pay a little extra in shipping costs. Method 2. Account for handling. If you have workers handling your objects prior to shipping, remember to account for this when determining shipping costs.
How long will it take to package the items and what do you pay your workers? To figure out handling costs, multiply how long it take your employees to package items and divide that by Then, multiply that by their hourly wage. This should give you the average cost of handling per item.
For example, say your employees take 15 minutes to package and send an item. Divide that by 60 to get.
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