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Everybody wants fast delivery these days. But for your business logistics should you buy a fleet of Ferraris and helicopters to get there faster? Should you offer the shipping service for free? It all comes down to how much does it cost to ship a package vs. the business benefit. Of course, you want to provide the best service possible, but you have to protect your margins too.<\/p>\n
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In this article, we\u2019ll take a close look at the main elements that affect shipping expenses as well as methods to drive those costs down to a minimum. Later, we\u2019ll explore how to incorporate shipping into a larger business strategy to score even bigger wins for your company.<\/p>\n
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Contents<\/p>\n
Many factors must be considered for estimated shipping costs. There\u2019s no single formula as every situation is unique. Still, once you learn about the variables, you can get a better handle on how to estimate costs. Here are the key areas you should know about.<\/p>\n
A long time ago, shippers realized that package size was just as important as package weight. For this reason, most carriers use what\u2019s called \u201cdimensional weight\u201d. This is calculated by multiplying the length x height x width of a package and dividing the result by a standard divisor.<\/p>\n
Next, the dimensional weight is compared to the actual weight. The higher number is then used as the billable weight.<\/p>\n
Obviously, the shipping charge depends on how far the items will travel. For example, the USPS uses shipping zones to calculate costs. The zones are based on increasing distance from the origin, not on any specific geographic area. The higher the zone, the greater the estimated delivery charge. Here\u2019s the breakdown:<\/p>\n
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