Shipping Cost in India for eCommerce

Overview

Regardless of their scale, all eCommerce companies have had to deal with calculating shipping costs in India. Shipping is an essential operation of any online business. Quick and timely delivery is of critical importance. It is also vital that the delivery process is hassle-free and flexible.

What about the cost of shipping? It is important to offer your customers the best shipping cost for their online purchases. This is paramount if you want your customers to keep coming back to your online store. It is also crucial if you would like to reduce the number of abandoned shopping carts on your online store.

A significant influence in current eCommerce shipping practices in India can be attributed to retail giant Amazon. Their free shipping and delivery offers have completely changed the way we look at eCommerce shipping costs in India. The notion that shoppers don't need to pay extra for courier charges was welcomed by consumers all over India.

A noteworthy benefit in offering free shipping to online shoppers is the tangible boost in customer satisfaction. This in turn leads to higher customer retention and loyalty.

This revelation has stirred up e-retailers in India to jump to the fore and offer free shipping to their customers. However, offering lower eCommerce shipping costs can easily cut into an online business’s profit margins.

In this article, we will determine the cost of shipping in India and what it means for eCommerce businesses. We will break down the components that make up eCommerce shipping costs. We will also show you how Indian online retailers, courier, and logistics companies can lower their shipping costs.

What are Shipping Costs?

Simply put, shipping costs can be defined as the logistics costs incurred by a courier or eCommerce company. These costs are incurred when moving orders from a warehouse to the customer’s doorstep.

Every single step, pause, or movement while the package is in transit, builds into what becomes the shipping cost. The core factors that influence shipping costs in India include:

1) Cost of packaging

Packaging includes boxes, labels, tapes, corrugated boards, packing foam, or any other packing materials. These materials are required to keep the products safe in transit.

2) Cost of Labor

Courier agents involved with picking, packing, and dispatching orders are paid based on experience and expertise. 

3) Cost of Fuel

Fuel and other charges related to shipping vehicle and fleet are factored into eCommerce shipping costs in India. Since fuel costs tend to fluctuate, courier companies tend to mark it at a stable average to account for changes.

4) Fees & Taxes

Costs can add up in the form of customs, brokerage, and any other duties in the case of international shipping. These can also include fees, taxes and penalties.

Ecommerce shipping costs in India also take into account warehousing, inventory management, delivery management, etc. This depends on the kind of shipping services offered by a courier company.

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. Let's take a look at some of the big names in Indian eCommerce shipping, like FedEx, BlueDart, UPS, etc. On average, they 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. This is accounted of course, after the entire shipping process has been paid for.

How to Calculate Shipping Rates Instantly in India for Your eCommerce Businesses

As an eCommerce company, calculating shipping rates for eCommerce shipping is very important. This needs to be done before finalizing a courier company or logistics software.

You can calculate shipping rates in India for ecommerce shipping in an instant. All you need to do is to directly check out the website of various courier companies. Almost all eCommerce 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:-

1) For Domestic Shipping -

• The Pick Up Area Pincode
  This criteria impacts shipping costs. Pick up from pincodes that are out of the carrier's normal network can cost extra.
• Delivery Area Pincode
  This element, similarly has an effect on the cost of shipping. Deliveries to pincodes that are hard to reach or outside the city can come at an extra cost.
• Weight of the Package
  The weight of the shipment also factors into the costs. Any package that is oddly shaped or oversized can have you paying extra for specialised handling.

2) For International Shipping -

• Destination Country
  One of the main elements that forms a deciding factor in cost of shipping is the destination. The transit route followed by the carrier can also rack up extra charges in terms of warehousing and special surcharges.
• Pick Up Area ZipCode
  Just as with domestic shipping, the pick up zip code affects the cost of shipping. Some carriers even charge extra for pick ups from residential areas.
• Delivery Area ZipCode
  Similarly, delivery to zip codes that are not in commercial complexes can come at an extra fee. This is entirely at the discretion of the shipper.
• Weight of the Package
  The weight of the package is an important criteria that will affect your shipping costs. This holds especially true for goods that are extremely heavy require special handling.
• Dimensions (Length, Width, Height)
  Just as with the weight of the package, dimensions determine shipping costs. Carriers often charge you extra for packages that are bulky and unwieldy.

Why is Calculating Shipping Costs an Important Process?

Calculating shipping costs India and elsewhere is critical to logistics operations. This is because the rate of shipping levied by an eCommerce company has a big impact on shoppers. It affects 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. They do so without paying any attention to their own profits and business capital.

We agree wholeheartedly that free shipping is ideal for customers. But 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. 

Calculate how much you want to charge for eCommerce shipping in India. Once you have done so, 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. 

The importance of calculating shipping costs for e-commerce shipping in India cannot be stressed enough. It builds a sense of trust among customers and builds brand loyalty. Transparent shipping rates will eventually result in returning customers and more sales.

List of Factors Involved That Determine the Shipping Cost in India

1) Calculated Shipping Rates

Calculated shipping rates 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.

2) Flat-Rate Shipping

The Flat-Rate Shipping method for calculating eCommerce shipping costs in India is also quite popular. This method 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 eCommerce companies in India.

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.

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 can do one of two things. They can 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. 

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. These parameters take precedence over the actual weight of a product.

Many courier companies like FedEx, UPS, Blue Dart, etc., take both into account. They 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) E-commerce Courier Companies and Delivery Agents

Shipping costs in India and elsewhere are also affected by the manpower necessary to complete the various tasks. And this includes the number of staff and ground forces required for actual shipping.

Adding to this are the payments to 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.

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. 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 0-50 km of the courier company’s warehouse or distribution hub. Zone 2 would be from 51-150kms and so on. 

8) Value- Added Services

Value added services provided by shippers are available to address a wide range of expectations. They come at a significant cost. Under this banner, shippers offer express shipping modes. They also provide specialised warehousing and transit, and even handle dangerous goods.

These services enable businesses to avail of specialised handling and processing of shipments. By partnering with experienced carriers, they can ensure their shipment reaches their customer - safely and on time. Sustainable shipping options are soon becoming a norm in the roster of value-added services.

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 Indian eCommerce courier and logistic software companies cope. How can they 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. These can store hundreds and thousands of orders. In addition, dedicated delivery vehicles that can carry shipments in bulk from one place to another can be parked here.

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 eCommerce companies do not manage such high order volumes as a courier or logistics company. This means 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 online retailers do not specialize in logistics. This means 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. This is thanks to their ability to invest in high-end tech support. This not only brings down the overall shipping cost in India but also expedites the delivery process.

How to Reduce e-commerce Shipping Costs in India?

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.

They can then pick the one that suits them the most.

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.

They can facilitate quick and most hassle-free delivery experiences to both eCommerce companies and customers.

3) Choose the Correct Mode of Transport

Figure out which items are best delivered through the air, mail, sea, or land. This can help bring down the stress over deliveries. But it can also impact 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.

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. This is so that all such orders can be bundled together for the same or nearby destinations.

5) Automation & Tech

Leading shippers in India and worldwide have invested in technology to assist them in achieving their logistics goals. Automating your operations will remove chances of manual error. With the power of AI, it will remove the need for human intervention.

With quicker workflow and reduced bottlenecks, automated processes can help your eCommerce business complete all tasks on time. This will help you in growing your business quicker and your technology aided operations will help you address the inflow of orders.

Final Words

Free shipping is a proven best practice in the eCommerce industry when it comes to customer satisfaction and loyalty. 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 in order to offer cheaper or free shipping to your shoppers. We wish you all the best in your future endeavours!

FAQ

1) How much does it cost to ship products in India?