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 Shipping Calculations, Weight vs Dimensions
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1234
Ecommerce Template Expert

USA
851 Posts

Posted - 01/10/2021 :  09:01:20  
My company sells corrugated boxes and mailers. When we receive these orders, the orders are then placed with the box manufacturers to be shipped directly to our customers. The shipping cost that we collect at checkout differs greatly from what the manufacturer charges when actually shipping the products to the customers. I have been trying to come up with a "formula" for years now but I just can't narrow it down. I use UPS, FedEx and USPS. The customers almost always use the lowest price, but it isn't always the same shipper.

Setting just the weight of the product results in a loss, as the actual shipping price is much higher.

Setting the weight plus the dimensions of the product returns a tremendously high shipping price and results is users abandoning the cart.

I have tried setting the product weight up a few pounds from the actual product weight in order to compensate for the loss in shipping. That works when customers only purchase a few boxes, but when they attempt to order a large amount of boxes the weight increases substantially and in turn returns an unrealistically high shipping price, resulting in cart abandonment.

I'm not sure what to ty next. I can't mark the weight down to zero and just enter the dimensions. That will produce free shipping. I've tried asking the manufacturer's but that is like pulling teeth. They are simply unwilling to help, if I get a response at all.

Any suggestions?

dbdave
ECT Moderator

USA
9016 Posts

Posted - 01/10/2021 :  09:29:18  
Hi, there are probably quite a few factors to consider here.
Is your supplier shipping from the same origin assigned in your store?
Do you, or the supplier have negotiated rates with the carriers?
Are you pulling in the negotiated rates, or just using the stock rates from the carriers?

I expect that part of your issue, at least with UPS and FEDEX, is dimensional weight. If it's lightweight and bulky, they bill the shipment at a much higher weight than it actually weighs.

If your supplier is getting big discounts on dimensional weight and you are not pulling their rates into your store, then that might explain why the big difference when you add dimensions to your products.

My store ships over 100 tons (200,000 pounds) per year. This is many thousands of parcels.
I mention this because I am offering some advise from a fellow store owner who have been through some of the same issues, although we are not drop shipping.

What I've had to learn is that you will lose a little and make a little on the shipping once you have it set properly. If you have a variety of products in different sizes and weights, my suggestion is to look at your shipping costs versus your shipping revenue, over a broad period of time. 3 months, 6 months etc...
I know that over time, my stores shipping expenses are about 13% average.
If I examine every single order, I might start to get upset when I lose money on shipping, but looking over time, I see that we take in about the right amount of shipping revenue to cover the costs.
My suggestion is to tweak things until to get to that point.

David

1234
Ecommerce Template Expert

USA
851 Posts

Posted - 01/10/2021 :  10:02:48  
Hi David!

Thanks for the advice. It hadn't occurred to me to think of it like that. Even when I do profit from the box sales it isn't by much because it is such a competitive market. And you're right, over the course of time I come out slightly ahead even with the losses. I am much closer now than ever at getting the formula down. I don't think it is an exact science.

This situation is a bit unique as the box manufacturer's ordering system allows me to log into their website and place an order just like any ecommerce site (with distributor pricing). They use FedEx and UPS. When I go to place my order with them to ship to my customer, the shipping price is very different. I either profit or lose, I never break even on shipping.

I will keep trying to tweak the "formula" but it does give me some sense of relief to know that I'm not the only one experiencing this issue when it comes to shipping. As I mentioned earlier, I am closer than ever before as far as small orders. But when a customer orders a large amount of boxes, the shipping weight increases so substantially that it produces a tremendously high price and the customer simply abandons the cart. That is what I need to focus on now.

For example: If a customer places an order for 25 boxes that weigh 10 pounds, I set have to preset those boxes to about 14 pounds in order to match the manufacturer's shipping price when I go to purchase the boxes from them.

However, if a customer orders 500 boxes, the weight for that order is 280 pounds. UPS, FedEX and USPS will return a tremendous shipping price for a that weight. When I go to place that order with the box manufacturer, their shipping price is much lower. So there seems to be a formula that they use - when the shipping weight reaches a certain plateau, the per pound price decreases. I just need to figure out what that plateau is and how to implement it in my store.

dbdave
ECT Moderator

USA
9016 Posts

Posted - 01/10/2021 :  11:54:23  
This is probably due to how many packages are included in the shipment.
This can be tricky to solve, but I would start with adjusting the splitpackat= setting in your includes.
This will directly impact those larger shipments. Increasing the splitpackat setting should result in a lower overall cost on those large orders.
Keep in under 50 I would suggest and run a few test orders on your site to see how it impacts small and large orders.

Thanks,
David
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