Every Friday, we answer a common question about fulfillment, shipping, or business. This week’s question comes from one of the TV fans who entered our giveaway contest for a Fire Stick. Today we will answer the following question: “why do shipping prices vary so much?”
The 4 Factors That Affect Shipping Prices
With stamp prices going up seemingly every year, people often wonder how those prices are set.
Usually, with questions like this one, the answers are not straightforward. For example:
- Packages don’t go straight to their destination.
- Expedited shipping costs more because going straight from Point A to Point B is expensive.
- Time to ship is often slowed down before orders are even received by carriers like USPS, UPS, and FedEx.
Yet directly answering your question today is surprisingly simple! The four main factors that affect shipping prices are weight, dimensions, speed of delivery, and distance traveled.
- Weight: this determines how much fuel is used to transport the package. Extra weight drives up of costs for carriers.
- Dimensions: this determines how much space is used in trucks, planes, and seafaring vessels. The bigger your package is, the less room there is for other packages in the truck, therefore meaning the carrier has to charge you more.
- Speed: delivering packages quickly means taking shortcuts. Bypassing the normal process causes the carrier to send your package through less cost-efficient routes in favor of speed.
- Distance: more miles means more fuel means more cost. This is pretty straightforward but still bears mentioning. The same package might cost $8 to ship in the US and $50 to ship to Australia.
But What Can I Do With This Information?
If you’re a consumer, you can use this information to buy smaller products from closer locations. This could save you some money and is also good for the environment as well.
As a business owner, though, the information here is enormously valuable. You can cut down on excess shipping costs by packing boxes tighter, finding a well-positioned warehouse, or even manufacturing lighter items.
Don’t just think of this abstractly, though. Use tools such as Easyship and Parcel Monkey to figure out how much it costs to ship packages of different weights and sizes to different locations. You’d be surprised how many opportunities to save money you can uncover this way!
The cost of shipping varies a lot from package to package, but the reasons are consistent. Cost to ship comes from weight, dimensions, speed, and distance. Figure out how to optimize those four qualities and you can save a ton on shipping in your business!