How is shipping cost calculated?
Four steps. 1) Dimensional weight (desi): Length × Width × Height (cm) / divisor. 2) Take the larger of that and actual weight; this is the chargeable weight. 3) Read the price of the tier it falls in. 4) Add extras and percentage surcharges. Formula: Cost per parcel = (Tier price + Extras) × (1 + Surcharge / 100). For several parcels, multiply by the parcel count; carriers measure and price each parcel separately.
Worked example
Take a 40 × 30 × 20 cm parcel weighing 3 kg with a divisor of 3000. Volume is 24,000 cm³, dimensional weight is 8, and since 8 beats 3 kg the chargeable weight is 8. On sample rate card A the up-to-10 tier is $12, extras are $0.50 and the surcharge is 5%: (12 + 0.50) × 1.05 = $13.13. On sample card B the same tier is $11 with no extras: 11 × 1.05 = $11.55. The same parcel differs by about $1.60. These are illustrative figures, not any carrier's prices.
Why does one extra unit cost so much on a tiered rate card?
Tiered prices climb in steps, not in proportion. On sample card A an up-to-5 parcel costs $9 and a 6-unit parcel costs $12, while everything from 6 to 10 costs the same. Two practical results follow. Just above a tier, shaving the box pays: for a 40 × 30 cm base at divisor 3000, staying within 5 units means a height of at most 12.5 cm. With room below a tier limit, a bigger, safer box costs nothing extra. The tier analysis shows the saving and the height you need.
What surcharges get added on top?
The list price is rarely the final price. Common items are pickup and home delivery, SMS or phone notifications, heavy-item fees above a size or weight limit, remote-area delivery, cash-on-delivery handling and returns of undelivered parcels. International express carriers such as FedEx also list fuel surcharges, remote-area delivery and address correction fees. In Turkey, Yurtiçi Kargo's guide says 2.35% of the final cost is added as a postal service charge on items within the limits of Law 6475. Put per-parcel items in the extras row and proportional ones in the surcharge row.
Which carrier is cheapest? It depends on the parcel
There is no single cheapest carrier; it depends on your product mix. With the sample cards, the 8-unit parcel is cheaper on B ($11.55 vs $13.13), but a 15-unit parcel is cheaper on A: (20 + 0.50) × 1.05 = $21.53 against 22 × 1.05 = $23.10. Don't compare quotes on the first tier alone. Group last month's parcels by chargeable weight, enter the busiest tiers and compare totals. At 500 parcels a month, that gap is about $790.
How do you set a free shipping threshold?
It is the lowest order value that protects your target profit while you pay the shipping. Threshold = (Shipping cost + Target profit per order) / Margin before shipping. With $11.55 shipping, a 30% margin and a $5 target, the threshold is (11.55 + 5) / 0.30 = $55.17. On a $40 order, pre-shipping profit is $12; shipping takes 96.3% of it and $0.45 remains. Setting the threshold a little above your average order lifts basket size, but setting it below this figure loses profit on each order. The formula assumes shipping stays in the same tier as the basket grows; if added items push the parcel up a tier, the threshold rises too.
How much should you charge customers for shipping?
A flat shipping fee only works if it covers your average parcel, not your cheapest one. Flat fee that breaks even = Σ (share of orders in a tier × cost of that tier). Using sample card A with extras and the 5% surcharge, an up-to-5 parcel costs $9.98, a 6-10 parcel $13.13 and an 11-15 parcel $21.53. If 60%, 30% and 10% of your orders fall in those tiers, the average is 0.6 × 9.975 + 0.3 × 13.125 + 0.1 × 21.525 = $12.08. Charging $8.99 flat means you absorb about $3.09 per order on average and $12.54 on every heavy parcel; at 1,000 orders a month that is roughly $3,085 of shipping you pay yourself. Either price the flat fee at the average, add a surcharge above a size or weight limit, or treat the gap as a deliberate subsidy and recover it through margin or the free shipping threshold below. Re-check the mix every quarter: a new bulky product shifts the average.
How is this different from the dimensional weight calculator?
The Dimensional Weight Calculator handles several different boxes, units and box-shrinking scenarios: it answers 'what is the chargeable weight?'. This calculator places that weight on a tiered rate card: 'what will it cost, which quote is better and where should free shipping start?'. For one box size this tool is enough; for mixed box sizes, find the weights in the other tool first.