# How to calculate eCommerce shipping costs: A guide for beginners

(Last Updated On: February 17, 2024)

Quick summary:

Are you a small eCommerce business owner looking to navigate the shipping cost? Look no further! In this beginner’s guide, we’ll break down the ins and outs of shipping costs, helping you save time and money. Whether you’re shipping products locally or internationally, understanding the basics is crucial.

So, let’s dive in and explore the shipping costs together, shall we?

## How to calculate shipping costs?

When it comes to calculating shipping costs in India when operating your online store, there are several factors to consider when choosing a shipping partner. The shipping cost of a package can be determined by factors such as the weight and dimensions of the package, distance to be covered, mode of transportation, delivery speed, and any additional services required.

Here are the steps to calculate shipping costs in India:

1. Consider the weight and dimensions of the package: These factors are crucial in determining the shipping cost based on carrier-specific weight and dimensional factors.
2. Determine the origin and destination of the package: The distance between the two locations impacts the shipping cost. Longer distances generally result in higher costs.
3. Choose the mode of transportation: The chosen mode of transportation (air, road, or rail) affects the shipping cost. Air transportation is typically more expensive than road or rail options.
4. Consider the delivery speed and additional services: Faster delivery speeds and additional services (like insurance or signature confirmation) increase the shipping cost. Slower delivery speeds or minimal services can help reduce costs.
5. Use the shipping carrier’s online calculator: Many Indian shipping carriers provide online calculators. These tools consider weight, dimensions, origin, destination, transportation mode, delivery speed, and additional services to estimate shipping costs accurately.

### How do you calculate shipping charges?

Formula: Shipping Cost = (Base Rate + Additional Fees) x Weight Factor x Dimensional Factor x Zone Factor

• Base rate: Minimum cost for shipping a package.
• Additional fees: Extra charges for special services.
• Weight factor: Multiplier based on package weight.
• Dimensional factor: Multiplier based on package dimensions.
• Zone factor: Multiplier based on shipping zone.

## Why is shipping important in eCommerce?

Shipping is the backbone of eCommerce! Costs related to shipping directly impact your company’s bottom line. The good news is that the Indian government’s PM Gati Shakti plans along with the National Logistics Policy are all helping bring down costs related to shipping.

Here is an excerpt from our latest newsletter edition:

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Let’s explore why they are important and how they can impact the success of an online business:

### 1. Customer expectations

Customer expectations for fast and affordable shipping drive sales on eCommerce website. High costs discourage customers and lead to abandoned carts. Competitive rates are essential to meet expectations.

Are you curious about the reasons why some online shoppers decide not to complete their purchases? As per Webinterpret, 70% of shoppers abandon their shopping carts because of shipping fees and other additional costs,

### 2. Profitability

Shipping costs impact eCommerce business profitability. High costs can reduce profit margins, particularly for businesses offering free or subsidised shipping. Effective shipping cost management is crucial for maintaining competitiveness and profitability.

### 3. Conversion rates

Shipping costs impact conversion rates. High fees at checkout can lead to cart abandonment and lost sales. Affordable or discounted shipping rates can boost conversions and drive more sales.

### 4. Customer satisfaction

Shipping costs impact customer satisfaction. High fees lead to cart abandonment and dissatisfied customers. Transparent and reasonable shipping costs enhance customer satisfaction and encourage repeat business.

Lower shipping costs or unique options differentiate online businesses. Customers compare shipping costs, and cost-effective and reliable options attract and retain customers.

### 6. Return policy

Shipping costs impact product returns. A seamless and affordable return process builds trust and improves the shopping experience. Prepaid labels and flexible options reduce return costs and simplify the process for customers and businesses.

### 7. Customer retention

Affordable and efficient shipping boosts customer retention. Positive shipping experiences encourage return purchases, promoting loyalty and repeat business.

### 8. Operational efficiency

Managing shipping costs improves efficiency. Optimising packaging, negotiating rates, and using automation reduce costs, speed up fulfilment, and enhance satisfaction.

## How does Instamojo help eCommerce owners with shipping cost?

If you’re an eCommerce owner, you might be interested in what influences people’s online shopping habits. According to Growthdevil, 49.7% of people consider free shipping as the main reason for shopping online, while 38% are motivated by discounts and coupons.

Instamojo can assist eCommerce owners in streamlining their businesses, including managing shipping costs.

Here’s how Instamojo can help:

• Multiple shipping integrations: Instamojo integrates with popular shipping providers, ensuring accurate shipping cost calculations at checkout.
• Authentication process: eCommerce owners can log in to specific shipping portals or create new accounts to access shipping services through Instamojo.
• Synced details: Account information, including business details, address, and contact information, is automatically synced with the shipping portal at no cost.
• Orders synced: eCommerce owners can schedule shipments directly within the Instamojo platform, eliminating the need to switch between platforms.
• Auto shipment tracking: By subscribing with Mojoplus points, eCommerce owners can automatically sync order status and tracking information within Instamojo.
• Transfer shipping charges: Instamojo handles the online payment of shipping charges, allowing eCommerce owners to avoid extra transactions.

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## Shiprocket

By integrating Instamojo with Shiprocket, businesses can enjoy seamless order management and shipping automation. This partnership allows you to access Shiprocket’s vast network of courier partners, enabling you to choose from cost-effective shipping options.

With real-time tracking and automated shipping updates, you can provide a smooth and reliable delivery experience for your customers.

You have the flexibility to select a plan that suits your needs perfectly. Check them here.

## Shipyaari

The integration of Instamojo with Shipyaari empowers businesses with simplified order fulfillment and efficient shipping operations.

With access to Shipyaari’s extensive logistics network, you can optimise your shipping costs and streamline the order processing and tracking capabilities, ensuring timely deliveries.

To obtain further details regarding their pricing plan, you can click here.

## iThink logistics

Instamojo’s integration with iThink logistics offers a wide range of shipping services, including domestic and international deliveries, reverse pickups, and warehousing solutions.

Efficiently manage shipments and deliver a seamless customer experience with automated order syncing and real-time tracking.

## Shipway

Integrating Instamojo with Shipway allows businesses to have full control over their shipping operations.

With features like branded tracking pages, automated status updates, and delivery notifications, you can enhance transparency and build customer trust.

Check out their pricing plan here.

## Pickrr

By integrating Instamojo with Pickrr, businesses can efficiently manage their shipping processes.

Access to Pickrr’s logistics network enables you to choose from multiple delivery partners and cost-effective shipping options. Automated order processing and tracking saves time and ensures timely deliveries.

To find out more, check out their pricing plan available here.

## Vamaship

Instamojo’s integration with Vamaship brings simplified shipping solutions. You can access Vamaship’s courier partners to choose the best shipping options based on cost, delivery time, and reliability.

Automated order syncing and real-time tracking streamline shipping and enhance customer experience.

With Vamaship, you can enjoy using the platform at no cost. You only need to pay for the shipments you make, ensuring fair and transparent pricing.

## Shippigo

Integrating Instamojo with Shippigo enables efficient order management and seamless shipping operations. Access Shippigo’s logistics network and choose from multiple courier partners for your shipments.

Ensure smooth deliveries and enhance customer satisfaction with automated order syncing and real-time tracking.

## Delhivery

Instamojo’s integration with Delhivery offers a world of shipping possibilities. Access Delhivery’s extensive logistics network and reach customers across India efficiently.

Automated order processing, real-time tracking, and reliable delivery services enhance customer experience.