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Are Your Shipping Rates At Checkout Accurate Enough?

Feb 2022
shipping rates for small business
Nikolay Pasholok
Product Owner, Calcurates
The estimation of shipping costs depends on various parameters from products' weight, dimensions, and destination to delivery dates. If certain factors are missing, it can happen that the shipping rates displayed at the checkout will be inaccurate. Why is that so? When you get carrier live shipping rates, they can not estimate shipping accurately if some data about the shipment is missing. Data that increases the accuracy of shipping rates are packages' dimensions or a validated destination address. Omitting this information results in inaccurate shipping rates.

Factors Affecting the Shipping Rates Accuracy

The shipping rates accuracy can be increased by getting carrier real-time shipping rates instead of setting up flat rates. Additionally, shipping rates accuracy can be increased by adding dimensions of the product, validating the shipping address, setting up shipping restrictions and rules, and lastly, calculating landed cost for international shipping. Let's have a look at all these factors in detail.

Carrier Real-Time Shipping Rates

carrier shipping rates for small business
Real-time or live rates are shipping rates requested directly from the carriers. E-commerce stores can get carriers' live rates using the default shipping functionality of e-commerce platforms, extensions from carriers, or 3rd party shipping solutions. The accuracy of live shipping rates depends on the parameters you send to the carrier when requesting a quote. If you send only the weight and the destination, the accuracy of your shipping rates is low. Use volumetric weight, and validate a destination address to obtain the highest accuracy of shipping rates.

According to Shopify, 80% of Shopify stores overcharge for shipping when setting up shipping rates manually. Obtaining accurate shipping rates automatically can thus avert customers from abandoning their shopping carts.
Solution:
Real-Time Rates from Carriers
There are some major benefits when displaying real-time rates at the checkout. Real-time rates save you from the manual labor of setting up flat or table rates in your backend. Real-time rates are more precise than flat rates, so you do not have to worry about overcharging your customers for shipping. Also, carriers include landed costs in their live rates automatically.

Product Dimensions And The Weight

Most of the carriers use a pricing technique called Dimensional Weight Shipping. It takes into account dimensions in addition to the weight. Those product dimensions are length, width, and height, all multiplied and then divided by the shipping factor (also known as "dimensional divisor"). The shipping factor varies from carrier to carrier. To calculate Dimensional Weight Shipping and obtain higher accuracy of shipping rates check the Dimensional Weight Calculator.

Dimensional Weight Shipping increases the accuracy of the shipping rates as besides weight it takes into account the volume of the product.
Solution:
Dimensional Weight Shipping
Dimensional Weight Shipping increases the accuracy of shipping rates. It helps calculate dimensional weight based on product dimensions, compares it with the regular weight, and uses the highest value when requesting live rates. More advanced dim weight solutions can pre-pack orders into available packages and calculate or request shipping rates based on packages and their dimensions.

Optimally Packed Orders

optimal packaging
Match the dimensions of the product to those of the package. Carriers charge more for packages that take much space in the transportation vehicle. Failing to match the dimensions of the product and package results in inaccurate carrier shipping rates. Optimally packed orders make shipping eco-friendly and reduce the harmful impact they have on the environment.
Solution:
Smart Packaging & Packaging Rules
Smart Packaging is an algorithm that “pre-packs" an order into given packages in real-time based on both product and package dimensions. Then, the algorithm requests shipping rates from the carriers, using the dimensions of the selected packages. The process increases the accuracy of shipping rates displayed at the checkout and makes shipping cost-effective and sales-stimulating. In addition to the Smart Packaging, there are Packaging Rules that help you customize your packaging scenarios. Using rules you can pack certain items separately, specify box capacity by item quantity or pack a certain product into multiple packages.

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Validated Destination Address

Carriers divide countries, regions, and cities into different zones called shipping zones. Shipping zones are used by carriers to accurately estimate shipping costs. Each country has a various number of shipping zones, for example, the United States is divided into eight zones. Estimating shipping rates based on shipping zones is not accurate enough. To achieve higher accuracy of shipping rates you should validate the destination address. Even zip codes within the same city might have different shipping rates.
Solution:
Address Validation
Address validation is a technical process that confirms the accuracy of the destination address. If the address submitted at the checkout is not accurate enough or points to a different location, the accuracy of shipping rates decreases. The accuracy of shipping rates depends on the final shipping destination and the location of the warehouse. There are multiple address validation plugins and apps available for e-commerce.

Shipping Rules and Restrictions

shipping rules for small business
Certain restrictions and rules might be applied to products depending on shipping parameters and shipping policy. You can customize shipping rules to increase the accuracy of shipping rates based on zones, weight, shipping groups, or any other parameter. Shipping rules make your shipping cost-effective with help of customized scenarios that are created for individual shipment categories, segments, or even customer bases.
Solution:
Shipping Rules & Restrictions
Use condition-based shipping rules and restrictions to fully control shipping rates at the checkout. Shipping Rules and Restrictions feature can be utilized to create unique customer scenarios by restricting shipping based on shipping zones, product attributes, or customer groups. This way, Shipping Rules help you avoid extra costs, offer discounts for specific geo-locations, or exclude certain distant zones from your shipping network.

International Shipping

International shipping rates are full of value and accurate if duties and taxes are included in the calculation. Landed Cost adds taxes and customs duties that are applied when shipping products abroad to the international shipping rate. The amount depends on the destination country as well as product parameters such as harmonized tariff code and country of origin. Failing to display accurate shipping rates at the checkout not mentioning applied duties and taxes can lead to customers' dissatisfaction with your service.
Solution:
Landed Cost displayed at checkout
There are e-commerce solutions that calculate and display duties and taxes at checkout. Using them and displaying landed costs at the checkout can be a big step forward for your international shipping.
Calcurates Related Features

Estimated Delivery Dates

Delivery Dates and Times
Another factor influencing the accuracy of shipping rates is Estimated Delivery Dates. Shipping rates are not accurate enough until you add information related to delivery dates. An accurate shipping rate consists of the basic shipping rate and delivery date information.
Solution:
Estimated Delivery Dates
Estimated Delivery Dates add an extra layer of service quality to your customers. With this shipping feature, a customer can indicate when he is going to deliver the order. By scheduling the delivery, you avoid returns or rescheduling of the package which is charged extra by carriers.

Flexible Rate Calculation Algorithms

The last but not the least factor which helps to achieve the accuracy of shipping rates is the rate calculation algorithms. Those algorithms are important if you have your own delivery service or if you are not able to use carrier live rates and therefore need to emulate them using custom shipping options.
Solution:
Flexible Rate Calculation Algorithms
When choosing a shipping solution check if it allows you to set up custom shipping options such as Flat Rate or Table Rates with flexible rate calculation algorithms that may help set up shipping rates per entire order, per pallet or box, per certain quantity, per unit of weight, per unit of distance, per item, as a percentage of the order subtotal.

Why Do You Need Accurate Shipping Rates?

Accurate shipping rates at the checkout help your e-commerce stay profitable, and do not force customers to overpay for the order delivery. Instead of hiding shipping costs into the product price, display the right rates at the checkout and win the competition. A transparent and fair shipping policy builds the trustworthiness of your business and increases conversion rates.
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