1. Overview of eCommerce Shipping Cost in India
All eCommerce companies regardless of their scale have had to deal with calculating shipping costs in India for their online deliveries. Offering your customers the best shipping cost is paramount if you want your customers to keep coming back to your online store. Amazon’s free shipping and delivery on several items have completely changed the eCommerce shipping cost scenario in India. Many courier companies and e-commerce businesses are now rushing to provide their customers with free delivery. However, providing lower eCommerce shipping costs can easily cut into an online business’s profit margins.
In this article, we will determine how much e-commerce shipping costs in India, the components that make up eCommerce shipping costs, and how e-commerce and courier/logistics companies can lower their shipping costs in India.
2. What are Shipping Costs?
Simply put, shipping costs can be defined as the logistics costs incurred by a courier or eCommerce company in moving orders from a warehouse to the customer’s doorstep. The factors that influence shipping costs in India include:
-Cost of packaging, boxes, labels, tapes, or any other packing materials
-Salary of courier agent involved with picking, packing, and dispatching orders
-Cost of fuel and other charges related to shipping vehicle and fleet
-Customs, brokerage, and any other duties in the case of international shipping
Ecommerce shipping costs in India also take into account warehousing, inventory management, delivery management, etc., depending on the kind of shipping services offered by a courier company.
3. What is the Average Shipping Cost for e-commerce in India?
Ecommerce shipping costs in India are entirely dependent on the kind of shipping services on offer. On average, big names in Indian eCommerce shipping, like FedEx, BlueDart, UPS, etc., charge anywhere between Rs. 30-90 per 500g. These charges include express delivery, packaging, labeling, manifestation, and delivery charges. Shipping costs also include a profit margin for eCommerce companies after the entire shipping process has been paid for.
4. How to Calculate Shipping Rates Instantly in India for Your eCommerce Businesses
As an eCommerce company, calculating shipping rates before finalizing a courier company or logistics software for eCommerce shipping is very important. To instantly calculate shipping rates in India for ecommerce shipping, you can directly check out the website of various courier companies. Almost all shipping companies in India feature a shipping rate calculator on their website.
A shipping cost calculator will require an eCommerce company to fill in the following details:
For Domestic Shipping -
-Pick Up Area Pincode
-Delivery Area Pincode
-Weight of the Package
For International Shipping -
-Pick Up Area ZipCode
-Delivery Area ZipCode
-Weight of the Package
-Dimensions (Length, Width, Height)
5. Why is Calculating Shipping Costs an Important Process?
Calculating shipping costs India and elsewhere is important because how much shipping rates an eCommerce company levies has a big impact on customer satisfaction and the overall profitability of the business. Free shipping is a relatively new concept popularized by the rise of eCommerce. To stay in business and offer competitive pricing, many eCommerce companies have started offering free shipping to customers without paying any attention to their own profits and business capital. Although free shipping is ideal for customers, an eCommerce business needs to figure out how to offer such services without losing profitability. For this reason, it is important to calculate eCommerce shipping costs thoroughly.
Once you have calculated how much you want to charge for shipping in India, you can reflect the charges on the checkout window of your online store. High shipping rates negatively impact sales and is a big reason for cart abandonment. Therefore, be careful to keep your shipping costs in India within affordable ranges.
Calculating shipping costs for e-commerce shipping in India is most important because it builds a sense of trust among customers and builds brand loyalty. Transparent shipping rates will eventually result in returning customers and more sales.
6. List of Factors Involved That Determine the Shipping Cost in India
6.1 Calculated Shipping Rates
Calculated Shipping Costs is the most straightforward way of determining shipping costs in India. In this method, shipping rates are calculated based on the measurements, dimensions, and weight of the order being delivered. The only problem with this method is that every product needs to be individually weighed to calculate shipping rates. On the upside, it gives customers the benefit of paying for the actual product’s shipping only.
6.2 Flat-Rate Shipping
The Flat-Rate Shipping method for calculating eCommerce shipping costs in India is one where shipping rates are fixed by the online business. Here, shipping rates are calculated based on the overall shipping expenses of the online company. This method does not involve a product’s size, weight, measurements, etc. This may be a viable shipping cost calculation method for younger e-commerce companies in India.
6.3 Handling Fees
The shipping minutiae is pretty vast. From packing, label printing, loading and unloading cargo, and implementation of safety measures. All of these activities and more fall under the section of handling fees. Handling fees may seem like a hidden charge but it involves the actual movement of an order from one place to another. Therefore, it’s only natural that e-commerce shipping in India will include handling fees in shipping costs.
6.4 Free Shipping
Free shipping is the dream shipping method of all retailers. Many online businesses have even started offering free shipping to customers. And why wouldn’t they, customers absolutely love it. But here’s what free shipping means to eCommerce companies in India. To justify free shipping, eCommerce companies either increase the price of the product on offer by adding the shipping cost to the product price itself. Or, they themselves pay for shipping and lower their profit margins. This is a decision that every eCommerce company needs to make for itself.
6.5 Dimensional and Volumetric Weight
This is another way of determining eCommerce shipping costs in India. Dimensional/volumetric weight is measured by calculating the length, breadth, and height of an order as opposed to the actual weight of a product. Many courier companies like FedEx, UPS, Blue Dart, etc., calculate both actual and dimensional weight of orders and charge the higher number. This method can lead to weight discrepancies and cause undue distress to customers at the time of checkout.
6.6 E-commerce Courier Companies and Delivery Agents
Shipping costs in India and elsewhere are also affected by the number of staff and ground forces required for actual shipping. This includes payments of delivery agents, customer care representatives, drivers, warehouse managers, and tons of other people. All of the people involved in the shipping are part of the shipping costs levied on products.
6.7 Shipping Zones
Shipping zones refer to geographical areas in which an eCommerce courier company delivers orders. A shipping zone is defined by the origin location of the order. Meaning, the further an order gets from a courier company’s area of serviceability, the higher the shipping cost. The closest shipping zone, Zone 1, would be within a radius of 0-50kms of the courier company’s warehouse or distribution hub. Zone 2, from 51-150kms and so on.
7. How Do eCommerce Courier Companies Offer Cheaper Shipping Rates?
It’s no secret that eCommerce shipping costs in India are a sore concern for a lot of online retailers. Therefore, it’s only natural to wonder how eCommerce courier and logistic software companies in India can offer much cheaper shipping rates than an in-house logistics team. The reasons are simple.
An eCommerce logistics company has access to large warehouse spaces that can store hundreds and thousands of orders and dedicated delivery vehicles that can carry shipments in bulk from one place to another. Therefore, the cost of shipping for a courier company is actually much lower because it can store and transport several items in a single delivery truck. Whereas, since eCommerce companies do not manage such high order volumes as a courier or logistics company, the average cost of shipping goes up.
Additionally, eCommerce companies managing shipping on their own have to hire additional staff to look after logistics. This eats into profit margins. And since, online retailers do not specialize in logistics, there is a high chance of inaccuracies and mistakes. A courier company or logistics software, on the other hand, can automate a lot of its processes because of high-end tech support. This not only brings down the overall shipping cost in India but also expedites the delivery process.
8. How to Reduce e-commerce Shipping Costs in India?
8.1 Use Multiple Carrier Services
Integrating with multiple courier partners to manage shipping operations is a smart move. Before every delivery, eCommerce companies can check out the shipping rates offered by various carriers and pick the one that suits them the most.
8.2 Use a Logistics Software
Manual handling of operations has become even more tricky and prone to mistakes in this fast-paced eCommerce environment. A logistics software can integrate with carriers, virtual storefronts, and mobile apps to provide the fastest and most hassle-free delivery experience to both eCommerce companies and customers.
8.3 Choose the Correct Mode of Transport
Figuring out which items are best delivered through the air, mail, sea, or land can bring down stress as well as eCommerce shipping costs in India and worldwide. This would also involve choosing delivery fleets or vehicles and assigning drivers for the same. Also, don’t forget to check the weight limitation for every freight type.
8.4 Bundle Orders Together
This is a classic one. Put all orders going to the same location/s in a single truck. This is a great shipping cost-saving method that can work wonders for your eCommerce business in India. The only thing this method requires is forethought, planning, and order management so that all such orders can be bundled together for the same or nearby destinations.
We hope this detailed article on eCommerce shipping costs in India helps you to calculate the shipping costs for your own business. We also hope it gives you several more ideas on how to cut down on shipping costs. We wish you all the best in your future endeavours!