How to Calculate Ecommerce Shipping Costs

Discover the essential factors that influence shipping costs for B2C orders. Learn how to calculate last mile costs effectively to maintain healthy profit margins and ensure your DTC business thrives.

How to Calculate Ecommerce Shipping Costs

Hey guys!

Another day, another blog! How have you been lately? 

Today, I have a topic to add to the Ecommerce blog series: shipping costs for B2C orders. Many DTC ecommerce brands struggle to determine the final shipping cost and decide whether to absorb it or pass some or all of it to customers. 

What factors mostly affect shipping prices, and how do you calculate shipping costs? Let's discover that in this blog!

Factors that Determine the Shipping Cost

Shipping Service

Different couriers have varied service definitions. For example, FedEx offers same-day, next-day, or 3-5 day delivery, while bulk shippers like GLS, Allied Express, and Freightwaves might offer overnight shipping. From my perspective, I group them into two major categories:

- **Standard Shipping:** Longer transit time, cheaper rate

- **Express Shipping:** Shorter transit time, more expensive rate

Zones/Delivery Areas

The distance significantly affects shipping costs. In the US, the shipping zone depends on the customer's location. In Australia, due to its vastness, companies usually offer a base rate and add remote surcharges depending on the destination.


Generally, the heavier the package, the higher the shipping cost. However, a lightweight package that takes up a lot of space can sometimes cost more than a heavier, smaller package.

DIM Weight

Dimensional (DIM) weight is crucial in determining shipping costs. Couriers compare the DIM/volumetric weight and gross weight, and whichever is higher becomes the chargeable weight. The volumetric factor varies by courier; for example, Allied Express uses 250 kg, while airlines use 167 kg.


Each courier has its strengths in different delivery areas. For example, in Australia, Sendle might excel in suburb delivery but not in remote areas. As a DTC brand, you might get reasonable rates, but not necessarily the cheapest.

How to Calculate the Shipping Cost for a Parcel

Using Carrier Shopify Plug-Ins

Some couriers, such as DHL, Sendle, and Australia Post, have plug-in apps in the Shopify store. Installing these apps allows you to see the estimated cost for a parcel. Here are some carrier Shopify plug-ins:

- Easyship

- Shippo

- Sendle

- Australia Post

Using 3PLs OMS/WMS Systems

If you sell on platforms like Shopify, WooCommerce, or BigCommerce, working with a 3PL can be beneficial. Many 3PLs have their own OMS/WMS systems that integrate with major storefront platforms. The operation flow could be:

Shopify > OMS/WMS > Carrier List

By working with them, you can see the rate calculated for an order. However, remember that all costs are considered estimated until the package is actually shipped.

Final Thought

Shipping is just a small part of the DTC journey, but it's crucial to understand the factors that impact the shipping price. Remember, every cost needs to be considered carefully, as Profit = Revenue - Cost.



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