Calculating Ecommerce Shipping Costs
As anyone who has ever bought or sold items online knows, shipping and handling charges matter. If the shipping charges seem too high, potential customers will likely abandon their carts and move on. If shipping charges are too low, the merchant ends up losing money. Merchants who fail to charge correct shipping rates can also be fined and may lose their reputation as a trusted online seller.
Trying to strike a balance when it comes to shipping and handling charges in an ecommerce store can be difficult. Luckily, there are many different ways to go about this. As long as you take the time to gather the correct information in advance, configuring shipping charges is a relatively easy task.
Calculate Your Rates:
Calculate your rates. Obtain the applicable rate chart(s) for the types of shipping contracts you have and/or shipping methods that you use. These can include a current USPS rate chart, a UPS chart for UPS or FedEx chart, or a retail rate chart. These rate charts are available online from the specific websites.
Determine Surcharge Rates:
Determine your surcharge rates. Once you have an idea of the current shipping rates for the carrier(s) and method(s) you have made available to your customers, the next step is to determine the surcharge rates that you will be responsible for. Each carrier has their own surcharge rates for special services like delivery confirmation and delivery area surcharges. Details about these rates can be found on the carrier's website. If you can't find the rates for a specific item in your inventory, contact the carrier directly by phone or email to obtain this information.
Compare:
Compare your sales prices to your total shipping and handling costs. Take your pre-order sales totals and compare them to their shipping and handling costs based on carrier and weight. This will help you to determine if you need to adjust your pricing accordingly in order to maximize profit.
If you use an online calculator that calculates shipping costs for you, it will likely be a much easier task to figure in rates and surcharges
Keep in mind, though, that whether you use a module to calculate costs for you or tally them up yourself, it is your responsibility as a merchant to charge the correct postage and rates for the items that you ship to your customers.
Posted on September 13, 2018
