How to Calculate Shipping On Shopify – Easiest Guide 2023

Shopify is considered to be one of the most prestigious E-commerce platforms for your store thanks to its excellent services, especially shipping services. When it comes to Shopify shipping services, you can save countless hours on your order fulfillment.

However, do you still hesitate about how to calculate shipping on Shopify in order to avoid risks?

Well, in the following article, we are going to provide a series of guides to determine the best shipping costs for your E-commerce business along with several recommendations.

Let’s discover this topic right now!

How USPS Calculates Shipping Costs

When it comes to shipping products through the United States the United States Postal Service (as known as USPS), it’s important to calculate the shipping costs accurately to avoid undercharging customers, which can cost you more in the long run.

The United States Postal Service is a well-known shipping carrier

When it comes to how to calculate shipping on Shopify, accuracy is a vital element that helps you avoid paying an extra cost.

• Measuring the product dimensions: To determine the cost of shipping a package through USPS, you need to measure its dimensions and weigh it. Taking accurate measurements of the package’s length, width, and height is essential since these factors impact majorly on the shipping cost.
• Measuring its weight: Weighing the package is also essential, as the weight determines the cost of shipping. For better accuracy, you can calculate dimensional weight (DIM weight) (*) or use a postal scale.
• Enter the details into the USPS calculator: Once you have the package’s dimensions and weight, you can use the postage price calculator on the USPS website to compute the postal rate.

Dimensional weight

The ratio of a package’s volume to its mass is known as the dim weight. You will be charged the greater of the package’s actual weight or its dimensional weight for each shipment.

If you know the exact dimensions of your product, you can calculate shipping charges with precision by measuring the package’s width, height, and length. Then, multiply them together.

However, this method is only applicable if your package is larger than 1 cubic foot (1,728 cubic inches).  Thus, to determine if DIM pricing applies, multiply the dimensions (L x W x H) by a value less than or equal to 1,728.

For instance, if your box has dimensions of 30 by 12 by 12, for instance, its volume is 4,320 cubic inches (the product of 30 by 12 by 12).

The current DIM divisor used by USPS, for example, is 166 cubic inches per pound. This applies to both domestic and international shipments. Using the preceding example, we can calculate the dimensional weight to be around 26 pounds by dividing 4,320 by 166.

Factors Affecting Shopify Shipping Costs

When running an e-commerce business on Shopify, shipping is a crucial aspect to consider. Not only does it impact the customer experience, but it also affects the bottom line of the business.

The fact that shipping management is already incorporated into the Shopify platform (Shopify Shipping) is among the most significant benefits offered by this e-commerce solution. However, the shipping costs vary from store to store due to different products, services, and even pricing tactics.

Thus, in this section, we will explore the key factors that influence shipping costs on Shopify, so you can make informed decisions and optimize your shipping strategy.

• Package’s dimensions: To put it simply, the cost of delivery will increase as it becomes larger. The same principle applies to package weight, a heavier shipment will cost a higher delivery fee.
• Shipping distance: Here is  1 very basic principle to remember: The further an item travels, the more expensive the shipment will be. For instance, shipping an item across the state would be less expensive than doing it across the globe.
• Shipping insurance: The majority of carriers offer reasonably priced insurance packages that will cover your costs in the event that one of your items is lost or damaged. For instance, if you’re delivering domestic orders from the US and using Shopify delivering labels, you can get insurance for up to $5,000 USD per shipment. 
• Duties and tax applied for international shipping: One of the main difficulties you’ll encounter if you sell internationally is dealing with customs and tariffs. Since it’s difficult to predict which additional fees will be charged from country to country, they breed a certain amount of uncertainty for both the store and the customer. Thus, make sure to specify that any taxes or customs fees are costs that are out of your control and not things that you will profit from.
• Speed of delivery: Similar to other delivery carriers, Shipping Express would cost higher since it is faster. Hence, the faster your package is delivered, the more expensive you have to pay.

How to Determine the Best Shipping Costs for Your E-Commerce Business?

After learning the main factors affecting Shopify shipping costs, you’ll need to consider the benefits of several approaches how to calculate shipping on Shopify.

The following section will provide you with 5 different ways, each with an in-depth explanation, to assist you in finding the optimal shipping prices for your online retail store.

1. Flat-rate Shipping

Depending on the quantity of the products you often sell, the suggested price you should charge for flat-rate shipping may change, but it should generally range between $7.00 and $15.00.

• Pros: The main benefit of flat-rate shipping is that it makes things easier for businesses. You no longer need to calculate the cost for each shipment. Thus, if you’re searching for a way to standardize the shipping procedures, it can be a smart option.

• Cons: However, one con of flat-rate shipping is that it may not always be the most cost-effective option. If the package being shipped is small and lightweight, the flat-rate price may be more expensive than the actual cost of shipping based on weight and distance. This can result in the customer overpaying for shipping and the seller losing potential sales due to high shipping costs.

2. Weight-based Shipping

The more-complex method in our how to calculate shipping on Shopify artcile is weight-based shipping.

The shipping calculator then uses the weight of the package to calculate the shipping cost.

• Pros: With this method, it allows for more accurate pricing based on the actual size and weight of the package. This can result in cost savings for the customer as they are only charged for the actual shipping cost, rather than a flat-rate price that may be higher than necessary. For the seller, it reduces the risk of losing money on the transaction due to undercharging for shipping.

• Cons: However, the drawback of this method is that you have to figure out all the prices of separate products manually. Spending the time to do this will, however, pay off greatly because your consumers will receive a shipping estimate based on the precise item they buy.

3. Free Shipping

Customers are often attracted to the idea of receiving a product without having to pay additional shipping fees, and this can be a major factor in their decision to make a purchase.

• Pros: Offering free shipping can help to simplify the purchasing process, as customers do not need to calculate shipping costs or make decisions based on shipping fees. This can result in a more enjoyable shopping experience for customers, which can help to boost overall sales and revenue for the seller.

Tips: Want to charge free shipping for your Shopify store? Click here to know how to remove shipping calculated at the checkout process!

• Cons: One of the main risks is that offering free shipping can result in higher costs for the seller, as they will be responsible for covering the shipping fees. This can eat into profit margins, and in some cases, sellers may even lose money on a transaction if the shipping costs exceed their profit margins.

4. Price-based Shipping

Lastly, price-based shipping is a shipping method that calculates the cost of shipping based on the total price of the order.

For example, a seller may offer free shipping for orders over $50, but charge $5 for orders under $50.

• Pros: One of the main advantages of price-based shipping is that it can incentivize customers to purchase more items in order to qualify for free shipping. This can result in larger orders and higher revenue for the seller. Additionally, price-based shipping can help to simplify the purchasing process, as customers do not need to calculate shipping costs or make decisions based on shipping fees.

• Cons: One key disadvantage is that it can be difficult to accurately calculate shipping costs based on the total price of the order, as factors such as the weight and destination of the package may also need to be considered. This can lead to undercharging or overcharging for shipping, which can be costly for the seller.

Best Apps for Calculating Shopify Shipping Costs

If you ask yourself “how to calculate shipping on Shopify” then you might have thought of using a third-party app. It is vital for Shopify store owners to determine the most accurate and cost-effective shipping options to ensure profitability while keeping customers happy. Luckily, there are numerous apps available on the Shopify app store that can help automate the process of calculating shipping costs.

These apps are highly opinionated thanks to a wide range of beneficial functions. They include extra roles like feedback gathering, label generation, and alerting clients of delivery times.

Specifically, owners of Shopify stores can use a shipping costs calculator tool to generate custom shipping options. A shipping software shows the delivery prices taking into account the variances for accurate pricing even when shipping methods vary by weight, quantity, and product price.

Here are the top Shopify shipping rate calculators as follows:

• OrderCup
• AVADA Shipping Bar
• Easyship
• Shopify Shipping Rates Calculator Plus
• Shipup
• Free Shipping Bar
• ShipZip – Shipping Rates
• DHL Rate Calculator
• PH Multi-Carrier Shipping Label App

Final words

In this article, we have provided you with approaches to how to calculate shipping on Shopify along with a series of helpful recommendations. Hope that with all of our suggestions about the finest apps for calculating shipping costs, you can make it easier for your own business.