Skip to product menu
close
  • Recent Launches
    Press Space or Enter to display list of options
EXPLORE ALL PRODUCTS

Recent Launches

New

Payroll software with automated tax payments and filing.

Try now
New

Robotic process automation software to automate high-volume, rule-based tasks.

Try for free
New

Low-code IoT platform and solutions for connected businesses.

Try now
New

Business formation service to launch and grow your businesses.

Try now
New

Privacy-friendly application analytics solution.

Try for free

Sales

 
CRM

Comprehensive CRM platform for customer-facing teams.

CRM
 
Bigin

Simple CRM for small businesses moving from spreadsheets.

Bigin
 
Forms

Build online forms for every business need.

Forms
 
SalesIQ

Live chat app to engage and convert website visitors.

SalesIQ
 
Bookings

Appointment scheduling app for consultations with customers.

Bookings
 
Sign

Digital signature app for businesses.

Sign
 
RouteIQ

Comprehensive sales map visualization and optimal route planning solution.

RouteIQ
 
Thrive

Complete loyalty and affiliate management platform.

Thrive
 
Voice

Cloud Contact Center Software for businesses.

Voice
 
Suites
CRM Plus

Unified platform to deliver top-notch customer experience.

CRM Plus

Marketing

 
Social

All-in-one social media management software.

Social
 
Campaigns

Create, send, and track targeted email campaigns that drive sales.

Campaigns
 
Forms

Build online forms for every business need.

Forms
 
Survey

Design surveys to reach and interact with your audience.

Survey
 
Sites

Online website builder with extensive customisation options.

Sites
 
PageSense

Website conversion optimization and personalisation platform.

PageSense
 
Backstage

End-to-end event management software.

Backstage
 
Webinar

Webinar platform for webcasting online webinars.

Webinar
 
Marketing Automation

All-in-one marketing automation software.

Marketing Automation
 
LandingPage

Smart landing page builder to increase conversion rates

LandingPage
 
Publish

Manage all your local business listings on a single platform.

Publish
 
SalesIQ

Live chat app to engage and convert website visitors.

SalesIQ
 
Sign

Digital signature app for businesses.

Sign
 
Thrive

Complete loyalty and affiliate management platform.

Thrive
 
Voice

Cloud Contact Center Software for businesses.

Voice
 
NEW
LeadChain

Sync, manage, and convert leads across channels seamlessly.

LeadChain
 
NEW
CommunitySpaces

Online community platform for individuals and businesses to grow their network and brand.

CommunitySpaces
 
Suites
Marketing Plus

Unified marketing platform for marketing teams.

Marketing Plus

Commerce and POS

 
Commerce

eCommerce platform to manage and market your online store.

Commerce

Service

 
Desk

Helpdesk software to deliver great customer support.

Desk
 
Assist

Remote support and unattended remote access software.

Assist
 
Lens

Interactive remote assistance software with augmented reality.

Lens
 
FSM

End-to-end field service management platform for service businesses.

FSM
 
SalesIQ

Live chat app to engage and convert website visitors.

SalesIQ
 
Voice

Cloud Contact Center Software for businesses.

Voice
 
NEW
Solo

The all-in-one toolkit for solopreneurs.

Solo
 
Bookings

Appointment scheduling app for consultations with customers.

Bookings
 
Suites
Service Plus

Unified platform for customer service and support teams.

Service Plus

Finance

 
Books

Powerful accounting platform for growing businesses.

Books
 
FREE
Invoice

100% Free invoicing solution.

Invoice
 
Expense

Effortless expense reporting platform.

Expense
 
Inventory

Powerful stock management and inventory control software.

Inventory
 
Billing

End-to-end billing solution for your business.

Billing
 
Checkout

Collect payments online with custom branded pages.

Checkout
 
NEW
Payroll

Payroll software with automated tax payments and filing.

Payroll
 
NEW
Solo

The all-in-one toolkit for solopreneurs.

Solo
 
Practice

Practice management software for accounting firms.

Practice
 
Sign

Digital signature app for businesses.

Sign
 
Commerce

eCommerce platform to manage and market your online store.

Commerce
 
Suites
Finance Plus

All-in-one suite to manage your operations and finances.

Finance Plus

Email and Collaboration

 
Mail

Secure email service for teams of all sizes.

Mail
 
Meeting

Online meeting software for all your video conferencing & webinar needs.

Meeting
 
Writer

Word processor for focused writing and discussions.

Writer
 
Sheet

Spreadsheet software for collaborative teams.

Sheet
 
Show

Create, edit, and share slides with a sleek presentation app.

Show
 
Notebook

Beautiful home for all your notes.

Notebook
 
Cliq

Stay in touch with teams no matter where you are.

Cliq
 
Connect

Employee experience platform to communicate, engage, and build positive employee relations.

Connect
 
Bookings

Appointment scheduling app for consultations with customers.

Bookings
 
TeamInbox

Shared inboxes for teams.

TeamInbox
 
WorkDrive

Online file management for teams.

WorkDrive
 
Sign

Digital signature app for businesses.

Sign
 
Office Suite

Powerful collaborative work platform for teams.

Office Suite
 
Office Integrator

Built in document editors for web apps.

Office Integrator
 
ZeptoMail

Secure and reliable transactional email sending service.

ZeptoMail
 
Calendar

Online business calendar to manage events and schedule appointments.

Calendar
 
Learn

Knowledge and learning management platform.

Learn
 
Voice

Cloud Contact Center Software for businesses.

Voice
 
ToDo

Collaborative task management for individuals and teams.

ToDo
 
Tables

Work management tool to connect people, processes, and information.

Tables
 
FREE
PDF Editor

Collaborative online PDF editing tool.

PDF Editor
 
Suites
Workplace

Application suite built to improve team productivity and collaboration.

Workplace

Human Resources

 
People

Organize, automate, and simplify your HR processes.

People
 
Recruit

Intuitive recruiting platform built to provide hiring solutions.

Recruit
 
Expense

Effortless expense reporting platform.

Expense
 
Workerly

Manage temporary staffing with an employee scheduling solution.

Workerly
 
NEW
Payroll

Payroll software with automated tax payments and filing.

Payroll
 
Shifts

Employee scheduling and time tracking app.

Shifts
 
Sign

Digital signature app for businesses.

Sign
 
Suites
People Plus

Comprehensive HR platform for seamless employee experiences.

People Plus

Security and IT Management

 
Creator

Build custom apps to simplify business processes.

Creator
 
Directory

Workforce identity and access management solution for cloud businesses.

Directory
 
FREE
OneAuth

Secure multi-factor authenticator (MFA) for all your online accounts.

OneAuth
 
Vault

Online password manager for teams.

Vault
 
Catalyst

Pro-code platform to build and deploy your apps.

Catalyst
 
Toolkit

Complete resource for any admin-related lookup queries.

Toolkit
 
Lens

Interactive remote assistance software with augmented reality.

Lens
 
Assist

Remote support and unattended remote access software.

Assist
 
QEngine

Test automation software to build, manage, execute, and report testcases.

QEngine
 
NEW
RPA

Automate manual, tedious, and repetitive tasks easily.

RPA

BI and Analytics

 
Analytics

Modern self-service BI and analytics platform.

Analytics
 
Embedded BI

Embedded analytics and white label BI solutions, tailored for your needs.

Embedded BI
 
DataPrep

AI-powered data preparation service for your data-driven organization.

DataPrep
 
NEW
IoT

Harnessing IoT analytics for real-time operational intelligence.

IoT

Project Management

 
Projects

Manage, track, and collaborate on projects with teams.

Projects
 
Sprints

Planning and tracking tool for scrum teams.

Sprints
 
BugTracker

Automatic bug tracking software for managing bugs.

BugTracker
 
NEW
Solo

The all-in-one toolkit for solopreneurs.

Solo

Developer Platforms

 
Creator

Build custom apps to simplify business processes.

Creator
 
Flow

Automate business workflows by creating smart integrations.

Flow
 
Catalyst

Pro-code platform to build and deploy your apps.

Catalyst
 
Office Integrator

Built in document editors for web apps.

Office Integrator
 
ZeptoMail

Secure and reliable transactional email sending service.

ZeptoMail
 
QEngine

Test automation software to build, manage, execute, and report testcases.

QEngine
 
Tables

Work management tool to connect people, processes, and information.

Tables
 
NEW
RPA

Automate manual, tedious, and repetitive tasks easily.

RPA
 
NEW
Apptics

Application analytics for all apps.

Apptics
 
Embedded BI

Embedded analytics and white label BI solutions, tailored for your needs.

Embedded BI
 
NEW
IoT

Build, deploy, and scale IoT solutions for connected businesses.

IoT
 
DataPrep

AI-powered data preparation service for your data-driven organization.

DataPrep

IoT

 
NEW
IoT

Low-code IoT platform and solutions for connected businesses.

IoT

Search Result

 
CRM Plus

Unified platform to deliver top-notch customer experience.

Try now
CRM Plus
 
Service Plus

Unified platform for customer service and support teams.

Try now
Service Plus
 
Finance Plus

All-in-one suite to manage your operations and finances.

Try now
Finance Plus
 
People Plus

Comprehensive HR platform for seamless employee experiences.

Try now
People Plus
 
Workplace

Application suite built to improve team productivity and collaboration.

Try now
Workplace
 
Marketing Plus

Unified marketing platform for marketing teams.

Try now
Marketing Plus
 
All-in-one suite

Zoho One

The Operating System for Business

Run your entire business on Zoho with our unified cloud software, designed to help you break down silos between departments and increase organizational efficiency.

TRY ZOHO ONE
Zoho One
Zoho Marketplace

With over 2000 ready-to-use extensions across 40+ categories, connect your favorite business tools with the Zoho products you already use.

EXPLORE MARKETPLACE
Marketplace
Skip to main content
Zoho Academy

Estimating Shipping Costs and Choosing a Carrier

  • 8 Mins Read
  • Posted on March 7, 2019
  • Last Updated on October 8, 2024
  • By Lauren

If you’ve been following along with us on our ecommerce journey, you’re well on your way to answering the questions that’ll get your products into your customers’ hands. You now know about the variety of strategies available for charging customers for shipping: from free shipping, to flat rates, to table-based shipping, to real-time shipping quotes, to whatever creative combination you arrive at—through data—that works best for your product and your customers. You also know about the variety of ways you can offset costs if you decide free shipping will be worth your customers’ loyalty. Because in the midst of all this, you can’t neglect your bottom line.

But now you’re probably asking the question that every online business must face early on: How do I choose theright carrier for my ecommerce store? After all, you know from the studies—not to mention from your experience as a consumer—how crucial it is to get your shipping prices and delivery strategies justright; and perhaps you’re feeling some anxiety around what feels like an overwhelming set of decisions. We understand: Shipping is your biggest expense, and it plays an enormous role in your customers’ perception of your brand—and ultimately, in their loyalty to you.

But when you’ve got the right data, choosing a shipping carrier doesn’t have to be an agonizing decision.

Below, we’ll walk you through the steps of estimating your shipping costs based on the factors every carrier will use to price your shipments. With a bit of work, you’ll discover that different carriers will be better for your products, your customers’ geographic locations, and the shipping options they’re asking for. With a combination of product-specific data and shipping calculators, you’ll choose a best carrier for you.

As you read, remember to keep in mind the three factors we mentioned in the previous section:

  1. Your customers (Where do they live? What’s their level of price-sensitivity?),
  2. Your product (How big/heavy/expensive is it? Do customers typically need it immediately or are they willing to wait for it?)
  3. Your competition (Are there industry standards? What’re your competitors’ strategies?)

The collective answers to these questions will play a big part in your carrier selection.

Factors that Determine Shipping Fees

There are a number of variables that go into determining shipping costs. You’ll need to understand how they work in order to properly estimate fees and choose the right carrier:

Package size and weight

In theory, these factors are the easiest to understand; and they’ll have the biggest impact on your costs. Package weight (also called “actual weight”) is exactly what it sounds like; and even a few-ounce difference can affect your bottom line when you’re shipping a lot of orders. However, carriers have also found a way to charge for large, lightweight items that take up precious real estate. It’s called “dimensional weight”; and it’s calculated by taking the volume of the package (L x W x H) and dividing it by a number determined by the carrier (FedEx’s divisor is 5,000; UPS’s are 139 and 166; USPS’s is 194). Most carriers charge the greater of the two rates: If your products are large but light, you’ll get charged based on the dimensional weight; if they’re small but heavy, you’ll get charged based on actual weight.

This means two things for you. First, because dimensional weight is based on package size, you’ll want to be careful about the packaging you choose: Choose boxes that are just big enough to hold your products and the packing materials that keep them safe; and be willing to play “package Tetris” on orders with multiple products if it looks like you’ll be getting charged dimensional weight. Second, for the most accurate actual weight of your products, package each product—packing material and all—before weighing it. (It wouldn’t hurt to invest in a scale for yourself!) After all, you’ll be putting these numbers into carriers’ calculators to get your price estimate, and they aren’t numbers you’ll want to be sloppy about.

Destination

Naturally, the further your product has to travel, the more costly shipping will be. Shipping carriers use “zones” (or postal codes) to determine rates; these zones fan out from the location you’re shipping from, such that rates increase as distance increases. So you’ll need to determine how far you’re willing to ship your products: Do you want to stay domestic, or do you want to open your shop to a global audience? Are you happy just shipping to a few regions for now? (You can use market research to determine demand in those regions.)

Pro tip: Keep track of your shipping destinations over time. This way, once you’re big enough to use a fulfillment warehouse, you can choose one closest to the majority of your customers, keeping your shipping costs as low as possible.

That said, we don’t only mean distance when we talk about destination. The characteristics of the destination also impact shipping costs: Delivering to a highrise in Miami and a farm in rural Montana are two different things. Will there be liftgate fees? Remote or extended area surcharges? Inside delivery fees? Residential delivery fees? Appointment delivery fees? Re-delivery fees? The answers to these questions all depend on the delivery location.

Additional costs

We’ve just named some of these, but there are others. Insurance and tracking first come to mind. Most carriers offer these at relatively low cost. UPS and USPS offer free coverage for up to $100; but if you’re shipping higher-value items, you’ll pay for additional coverage. You may choose to do this on a case-by-case basis, or—depending on the value and fragility of your products—for every shipment. You could also consider third-party insurance providers, such as ShipSurance.

If you’re shipping internationally, include customs fees and duties in your estimates. SimplyDuty and CustomsDutyFree offer duty and tax calculators worth playing with… though it’s the nature of the beast that you won’t know with absolute certainty what additional fees your products will be subject to in any given country. Be transparent with your customers about the fact that you can’t control additional customs and duties fees that may incur—ideally by stating it on your homepage and in your shipping policy.

Other possible costs include fuel surcharges, the price of signature confirmation upon delivery, package pickup… and of course, delivery speed. That’s a lot of factors, we know; but luckily, you’re not exactly expected to do all that math on your own. Which brings us to…

Carrier

The final factor is, of course, the shipping carrier. And now that you have the above information at hand—actual and dimensional weights of your products, a sense of where your target market lives and where you’ll be delivering, whether you’ll want insurance, and so on—it’s time to test various combinations to see which carrier/s will work best for you.

Choosing a Shipping Carrier for Your Ecommerce Store

“For you,” of course, is the key phrase in that above sentence. There is no “cheapest way to ship”; different carriers are simply better positioned to help different businesses. Many of them (UPS, USPS, FedEx, DHL, Canada Post, Australia Post, UK Royal Mail, and India Post) offer on-site shipping tables and calculators; but feel free to research beyond the big-name carriers. You may find reputable local carriers that can deliver your goods just as timely and safely, at lower cost.

In these calculators, enter your package details along with a variety of destination addresses (remembering that urban and rural addresses bring up different costs). For example, UPS—which is already integrated with Commerce Plus—asks for origin and destination addresses, actual and dimensional weight, declared value, and value-added services. This level of detail is valuable, because those additional costs can be considerable. If a carrier’s calculator doesn’t ask about additional services, contact them to find out about pickup rates, delivery confirmation fees, additional insurance costs, and so on: UPS ecommerce shipping carrier costs

Once we’ve entered all our information, we’re given—in this case—two shipping options (Next Day Air and 2nd Day Air), at two very different prices:

shipping carrier options

Of course, different carriers will offer different options (economy, ground, standard, domestic/international express, same-day, next-day, 2nd-day, and so on); you’ll want to pass as many of these options as you see fit onto your customers. By entering in a variety of variables, you’ll start to notice patterns: USPS Priority Mail may be the best deal for a domestic 2-pound parcel; but UPS might be the best deal for a domestic 6-pound package. From there, you can start developing your shipping strategy… based on the data. Keep in mind, too, that no one is holding you to commit to a single carrier. There may be a “best carrier” for each of your products, or for each of your destinations.

To simplify this process, there are shipping comparison calculators available that tap into the major carriers’ calculators, sort the data, and find the most cost-effective options for you. ShipGooder, Online Shipping Calculator, and other comparison calculators are worth checking out. They’ll save you the grind of inputting information into individual carriers’ calculators… though we wouldn’t rely wholly on these, as they don’t ask about additional services. Here’s what ShipGooder’s interface looks like:

Shipping comparison calculator interfaceshipping carrier comparison for ecommerce

Use these third-party calculators as a starting place, choose the carrier that looks best, and then go into that carrier’s on-site shipping calculator for more accurate pricing. Estimates are a great start; but you’ll ultimately want to be as exact as possible. After all, your business is on the line with these numbers.

As a general rule, couriers like USPS and Canada Post are great options for smaller, flat, and/or lightweight packages; they’re also better for deliveries to residential locations. Private carriers, on the other hand (DHL, UPS, FedEx), have built their businesses around shipping larger and heavier packages with relative efficiency. Businesses shipping particularly large or heavy items might consider an LTL (Less Than Truckload) carrier. And regional carriers tend to be optimized for local delivery. U.S.-based examples of such carriers include OnTrac (which services the western United States) and LaserShip (which services the eastern United States). These “general rules”—along with those comparison calculators—should give you a sense of where to begin your research.

Setting Up a Business Account with Your Shipping Carrier

There’s one price factor we have yet to mention… and it’s one that’s actually beneficial for your margins! Once you’ve chosen the carriers you’ll use, we strongly suggest you set up business accounts with them. We can’t think of a major carrier that doesn’t provide such a program (they want your loyalty, after all); and you’ll get shipping discounts, expense tracking, order management, free shipping supplies, and more. You can learn more about what each of these business accounts entails at USPS, UPS, FedEx, DHL, UK Royal Mail, Canada Post, Australia Post, and India Post.

If, over time, you become a high-volume shipper, you may find ways to negotiate your rates down even further… so no matter how small you are now, keep that in mind as yet another benefit to business growth.

Finally, remember that no shipping decision is final. Check in after six months—and again after a year—to be sure you’re delivering the best possible service at the best possible price for both yourself and your customers. Shipping is a complex industry; and it may take some time to find the perfect pricing and shipping solutions. Like everything else in your business, be attentive and patient, and let the process evolve.

 

Your shipping rates and delivery strategies are in place; but now you’ll need to be transparent about these matters in a document on your website. In the next section, we’ll cover one of the major policies you’ll want to link to from the homepage of your ecommerce site: your shipping policy.

Related Topics

Zoho products mentioned on this page: