Shipping Calculator

 Objective - Challenges
Shipping fees are an integral part of Internet sales.

The automatic calculation of shipping fees is a complex challenge.

Where is the merchant? Where is the buyer? What are the weight and the volume of the objects that need to be shipped? Do you offer free carriage? What shipping speed is desired, and therefore, what service is going to be used to ship the order? Does the size or weight exceed the limits accepted by certain carriers (you can't send a washing machine through the post office, even if your customer is willing to pay a fortune to do so!)? Actinic goes on the assumption that you aren't in the process of building a site to compete with Amazon.com and that your line of work is reasonably simple. As you are going to see, the shipping calculation system that we propose is flexible, but is still simple to use! Don't forget that your customers have to understand what you're billing them where shipping is concerned. This is why systems that are too sophisticated aren't always desirable.
 
 Information Collection Order
You will probably notice that in the shopping cart procedure, the shipping price is only displayed after the customer has entered their address.

Why not give them the final price beforehand?

The reason is that it is simply necessary to know the exact destination to be able to calculate the exact cost of shipping in relation to the volume and weight of the order.

Obviously, it's impossible to calculate this cost without knowing the customer's address!
 
 What is a shipping option?
To satisfy your clientele, it is probably necessary to give them the choice between several different service levels for shipping. Systematically using a top-of-the-line service may be simple to manage, but punishes well organized customers who place their orders with certain expectations! Therefore, it is logical to propose different shipping options with prices that are more or less expensive depending on the speed of the service (we have several customers who authorize their customers to pass by their store to collect their order and who add a "store pickup" shipping option billed at zero GBP and in "cash on delivery" mode!).

The price of each shipping option can be fixed according to the level of service offered and, in general, the delivery time.

Each shipping option has a short name that the customer will be reminded of in their order acknowledgement and a precise description that will allow you to thoroughly describe the service when the customer is going to choose their option.

Each shipping option can also be set to "cash on delivery" mode. In this case, the "payment processor" is the carrier because the carrier is responsible for collecting the required sum.

You can create as many shipping options as you want. Nevertheless, keep it simple so that your customers don't get lost amongst the choices!
 
 Vary Fees In Relation to Your Items
If the cost of shipping varies to a large extent in relation to the nature of the items that you sell, use the concept of a handling surcharge.

The price that is calculated for "shipping" actually includes shipping and handling.

You can assign a handling fee for each item with a price for the first ordered unit of a certain reference number and a price for any further ordered units.
 
 Example
Let's suppose that you define two shipping prices: £15 for express shipping, £10 for standard shipping.

You also define:
- Handling Surcharge Item 1: £3 the first unit, £2 further units
- Handling Surcharge Item 2: £5 the first unit, £4 further units

The customer orders 4 units of item 1 and 5 units of item 2. The price of shipping and handling comes to: 15 + 1x3 + 3x2 + 1x5 + 4x4 = £45 for express shipping. 10 + 1x3 + 3x2 + 1x5 + 4x4 = £40 for standard shipping.

This method offers a lot of flexibility but requires that you correctly define the handling cost values in the item files.
 
 Shipping Calculator
All of the functionalities previously described are pretty simple to set up.

However, there are certain cases that require a bit more complexity: Variable prices according to destination country, weight or volume, number of items in the order, total order price, tier based pricing, free carriage starting at a certain amount or certain number of products, etc.

In these situations, the use of more complex formulas is necessary.

Seven calculation formulas are available and, in general, allow you to handle all the different possibilities:
  • Fixed price: This is the simplest case that was described above. Its use within the framework of the shipping calculator only makes sense when paired with the management of the destination country, which is described below.
  • Price proportional to the number of items in the order: With this formula choice, all you have to do is indicate the amount in £ to add to the price of the order for each unit ordered.
  • Price proportional to the order price: All you have to do is indicate the percentage to add to the total order price.
  • Price proportional to the weight/volume of the order: In this case, you define the price in £ excluding VAT to add to each kg ordered. The calculation is proportional. Therefore, if 3.5 Kg are ordered, the shipping price will be 3.5 times this amount.
  • Tiered prices based on the number of items in the order: With tier based formulas, it is necessary to enter the definitions of the different billing ranges according to the number of units (products) in the order. You will determine that if the number of products in the order is between X1 and Y1, then the shipping price will be Z1, and so on and so forth.

    IMPORTANT: Don't forget to define your last range using a very high value (1000 units, for example) if you want to make sure that shipping will always be billed no matter the number of products in the order. Indeed, if you only define two ranges (0 to 10 and 11 to 20, for example) and a customer orders 25 products, the shipping calculator is going to conclude that there are no charges to bill for shipping. Moreover, this is the technique that you are going to use if you want to provide free carriage for all orders with more than 20 products, for example.
  • Tiered prices based on the order price: You can also define shipping fees based on the total order price. You will determine that if the order total is between X1 and Y1, then the shipping price will be Z1, and so on and so forth.

    Note: The same rule applies here as in the previous formula for carriage free orders. Define a range with a very high value and assign a null value for the price of this range.
  • Tiered prices based on the weight/volume of the order: Finally, you can enter the definitions for the different billing ranges according to the total weight of the order. Don't forget that volumes are converted into a weight equivalent according to the ratio you have provided. You will determine that if the order weight is between X1 and Y1, then the shipping price will be Z1, and so on and so forth.
  • When you use billing by weight/volume, it's important to understand the concept of the Weight/Volume equivalent. Carriers always bill using the most unfavorable option. If you have a small but heavy box, they will bill you according to weight. If you have a large bag full of feathers, they will bill you according to volume. To simplify, they decide that one cm3 (volume) must not weigh less than X grams, or instead of billing the real weight, they will bill the weight equivalent for the related volume. Therefore, you can define the Weight/Volume equivalent, i.e. the pseudo weight in grams of one cm3 of volume (which is the same as indicating the pseudo weight in tons of one M3 of volume). The shipping calculator will base its calculations on the weight of each item to be delivered. It will also calculate the volume, compare the volume that has been transformed to weight thanks to the weight/volume equivalent that you have defined, and use the most unfavorable value to determine the amount to bill for each item.
Important: Be homogeneous in your calculation formulas. If you decide to propose several shipping options (standard, express, cash on delivery, etc.), it is generally preferable that they are all based on the same type of formula. Otherwise, the pricing calculation results may become inconsistent and difficult to test on your site. You may find yourself in a situation where the "standard" price becomes more expensive than the "express" price because your calculations are not at all based on the same criteria! Keep it simple!
 
 Managing Destination Countries
The shipping calculator also allows you to calculate shipping prices according to the destination.

For example, you can define a shipping option for the United Kingdom and a shipping option for the European Community and decide that you don't deliver to any other countries.

You can decide individually if each shipping option will apply to all countries or to a specific list of countries.

It's common to define 3 prices: One for the United Kingdom, one for a selection of countries in continental Europe, and one for North America. In this way, if a visitor who resides in Africa or Asia wants to place an order, the shipping system will indicate that your site can't accept their order. If the visitor declares an address in the USA, only the shipping option that is valid for dispatch to the USA will be proposed.

Of course, you can define several shipping options for each group of countries. For example, you can define two options for the United Kingdom (a standard option that is less expensive and an express option that is more expensive) and only a single option, by airfreight, for the USA. You are not limited as to the number of options you can create.

Important: Test your shipping system. Go to your site, place an order, use an address in one country, then in another and make sure that the correct options are proposed.
 
 Several Cases In Point
  • You sell very small items. Your orders are all pretty homogeneous in terms of volume and weight. Keep it simple. Bill your shipping using a fixed price. If you're worried that an order may be too large (too many products), then assign a handling value to all of your products. In this way, the higher the number of items included in the order, the more expensive the shipping fees will be.

    Setting a fixed price for shipping is often a good idea! For example, if you sell honey on the Web, you know your average sale (3 jars of 500 grams, for example). Fix the shipping price. Propose standard shipping for price X and express shipping for price Y. You'll lose a bit if a customer orders 5 jars and gain a bit when a customer orders 1 jar. In the end, these differences will more than likely balance each other out and you will have made a living selling honey, and not on a hypothetical profit margin from shipping fees.
  • For all orders with less than 5 items, you want the shipping cost to be £10; for all orders with less than 10 items, you want the shipping cost to be £15; for all orders with more than 10 items, you want the shipping cost to be £20 and you want to sell in Norway and Sweden because your products are in English, but the shipping costs are £3 higher than those used in the United Kingdom.
    • Prepare a first shipping option and reserve it for the United Kingdom. Choose the "Tiered prices based on the number of items in the order" calculation formula. Define the first tier from 0 to 5 products for £10, a second from 5 to 10 products for £15, a third from 10 to 100,000 products (you're way of saying more than 10 products without limit) for £20.
    • Duplicate this shipping option and change the destination countries (Norway and Sweden). Now change the amounts of the tiers to £13, £18, and £23.
  • You want to use the previous case but improve it by defining free carriage for all orders with more than 10 items.
    • Simply change the value of the "100,000" tier and assign a value of 0. If the customer orders 15 products, the shipping calculator is going to conclude that there are no charges to bill for shipping.
Warning: Remember that handling fees, if defined, are always added to the shipping price. If you define carriage free shipping as described above, and one of the products in the order contains specific handling fees, the customer will be billed for these fees.
 

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