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How to Calculate Shipping Costs

By
Bradley Johnson
Table of Contents

Learning how to sell products online is full of financial opportunities and creative rewards. Selling coffee online or selling cookies online gives you freedom to carve out a niche with unique products.

Selling wholesale or DTC food through an eCommerce business model is just one cross selling opportunity, where you can achieve greater profit by selling multiple related goods. You can also browse a wholesale directory and look for wholesale items to sell, if you’d rather profit from pre-made items. 

No matter which of the many types of eCommerce businesses you’ve chosen to run, there is one aspect customers care about the most. That is getting their products conveniently and on time.

Keeping your shipping costs under control is one of the most important factors of any eCommerce venture. If you're wondering, "How much does it cost to ship a package?", you ought to know how to calculate shipping costs. 

Continue reading for essential tips on retrieving shipping and handling estimates from popular eCommerce shipping providers.

How to Calculate Shipping Costs for Online Store

Four out of 10 customers say they’re willing to pay extra for same-day shipping and about 72% of customers look for free shipping when shopping online. This means shipping should be a prominent focus of both your eCommerce business plan and warehouse organization strategies. 

Every eCommerce business’s shipping methods are going to differ based on products sold, carriers used, and product destinations. However, you can use tried-and-true shipping principles to determine the shipping costs of your own online store. 

While the type of products you sell often dictates your shipping approach, there are five common shipping methodologies: 

  • Flat rate shipping. This shipping option delivers goods to customers for a specific, rounded cost. Flat rate shipping often incentivizes buyers to purchase more knowing that shipping cost won’t increase with basket size. Business owners know they’ll pay more for larger orders but make up the difference with smaller orders. This option is common when learning how to print shipping labels at home.
  • Weight-based shipping. Assigning shipping cost based on weight is useful for businesses that sell large or heavy items. You may see weight-based calculators for companies that sell furniture, boats, cars, or similar products. 
  • Real-time cost calculation. This shipping cost model may be used in busy locations, such as markets near ports. Seasonal demand may also create the need for real-time shipping calculations because more people want to ship goods within a short time frame.
  • Price- or size-based shipping. The more a customer orders, the more space a carrier needs to reserve, which leads to higher cost. This is one of the reasons companies may impose size- or price-based shipping. Read how to measure a box for shipping so you can keep your expenses low.
  • Free shipping. Knowing that customers often prefer free shipping whenever possible, some companies provide free shipping on all orders. This can encourage shoppers to buy more than they otherwise would because money is moved from shipping expenses to other products. 

Remember that no particular shipping approach is necessarily right or wrong for your business; it’s more about what works for you and your customers. It may take some time to determine a shipping model that keeps your business profitable while maintaining a great warehouse management process flow

If you're learning how to sell baked goods online, sell whiskey online, selling liquor online, or sell beer online, just know that there are much stricter regulations for the sale and transport of alcohol so you'll need tailored insurance.

How to Calculate Shipping Costs On eBay

Since its inception in 1995, eBay has become one of the largest eCommerce marketplaces in the world. Annual revenue hovers around $11 billion as of 2020 and millions of sellers, wholesalers, and resellers use it every day.

eBay has a built-in shipping calculator for every product that is sold. You won’t be able to access this information until an item is listed, but here’s what to look for: 

  • Within your item’s Shipping details, look for an option labeled “Calculated: Cost varies by buyer location” and select that. 
  • Choose “Calculate Shipping” which is next to the Services section. 
  • Enter the details of your package (destination, weight, dimensions) as prompted by the shipping calculator’s fields. 
  • Click on the “Calculate shipping” button, after which you’ll see shipping options.
  • Select the shipping services you want to offer to buyers and arrange them in your desired order. 
  • When your product is sold, the buyer will have selected their preferred shipping service. You can then print the appropriate shipping label for the package. 

How to Calculate Shipping Costs USPS

The United States Postal Service (USPS) offers a wide range of shipping methods that can easily be customized. USPS is also still the US’ leading provider of shipping services, delivering about 129 billion packages annually.

Follow the below steps to determine your USPS shipping cost:

  • Using your web browser, navigate to the USPS website.
  • Hover over “Quick Tools” and click on “Calculate a Price.”
  • Enter some basic information about your package’s destination and the date you’re shipping the item.
  • Select a USPS shipping material from the options provided.
  • Continue following the prompts until you have received a shipping estimate or are ready to pay and print your label. 

How to Calculate UPS Shipping Cost

UPS is one of the leading shipping services in the US with over 4.7 billion packages delivered each year. They also have an easy process for determining shipping expenses.

Walk through the below steps to calculate UPS shipping cost: 

  • In your web browser, navigate to the UPS website. 
  • Click on “Shipping” in the upper left-hand menu.
  • Select “Calculate Time and Cost” from the drop-down menu that appears. 
  • Add basic info about your package’s origin, destination, and shipping date. 
  • View the shipping services in the grid on the right-hand side of the webpage. 
  • Click on the “Ship Now” button next to your desired shipping service.
  • Review the shipping information generated by the cost estimator, and print your label once ready. 

How to Calculate FedEx Shipping Cost

FedEx remains one of the most popular shipping companies in the US with about 3 billion packages delivered annually. The company is known for its global air freight capacities and its goal to become completely carbon-neutral by 2040. 

Follow the steps below to calculate your FedEx shipping cost: 

  • While using your web browser, navigate to FedEx’s website. 
  • Click on the “Rate and Ship” icon on the homepage. 
  • Enter the origin and destination addresses of your package, respectively. 
  • Fill out the fields that pop up, including package type, weight, dimensions, and shipping date. 
  • Click on the “Show Rates” button. 
  • Review the delivery date and cost options provided by the calculator. 

As you’ve seen, the final shipping cost for any item depends on package dimensions, weight, destination, and shipping speed. eCommerce shipping companies provide competitive rates for flat rate boxes, so take advantage of this pricing when you can.

Calculating a Winning Shipping Rate

eCommerce fulfillment and shipping is pivotal to the success of your business, whether you’re learning how to become a wholesaler or already active on an online marketplace. It’s far easier to increase eCommerce sales when your customers know your order management is reliable. 

No matter which eCommerce business ideas you’re considering, order fulfillment should always be near the top of your priority list. If you’re in a detail-oriented niche like selling alcohol online or selling baked goods online, shipping is even more important. You need eCommerce packaging that matches the products being shipped and protects them from damage. You'll also want to include a packing slip in each package in case a customer needs to make a return (see RMA meaning).

The shipping accuracy and speed of your eCommerce venture can make or break your brand efforts, especially if you’re just starting an eCommerce business. Put quality first and the rest will follow.