The cost of posting packages with Australia Post

Delivering a great eCommerce experience

Packaging, postage and shipping are major elements of your eCommerce business. Your priority is to get your customers’ orders to them in one piece, as fast as possible, and on budget.

It’s not uncommon for eCommerce start-ups to underestimate the costs involved in fulfilling orders and shipping them out to customers. This could leave the books unbalanced once sales start rolling in.

To avoid any surprises, it’s important to research packaging and shipping fees upfront, so you can accurately factor these costs into your business plan and adjust your product pricing accordingly. Knowing the costs from the start will also help you determine your shipping strategy.

How much does it cost to post a package?

Just as your eCommerce business is unique, so too are your shipping and logistics costs. How much it costs to post a package, and how much you spend per month, will depend on a wide range of factors.

It’s important to do your research and estimate your shipping costs, so that you can set accurate pricing for your customers.

The first step is to consider your packaging. Do you plan to use boxes or satchels? Your own packaging? Perhaps some filling material to protect each item? If you’re sending irregularly shaped or fragile items, then you’ll likely need a parcel box. If you’re sending posters or prints, then you’ll need mailing tubes. Clothes and lighter items are often suited to a satchel.

Most eCommerce businesses use a range of packaging options to suit different items. You can compare all the sizes and costs of Australia Post’s packaging options.

Once you’ve chosen your packaging, it’s time to think about shipping costs. This will depend on the weight of the parcel, the distance it’s travelling, and how quickly you need it to get to your customer. You can use our postage calculator to estimate the cost of shipping items around Australia and overseas. With the calculator, you can enter in your own parcel dimensions and weight, or you can see the shipping costs associated with all of our boxes, padded bags and mailers.

To make your shipping needs easier, you can sign up for a free MyPost Business account, to help you manage parcel deliveries. Create labels, choose how to lodge your parcels or integrate your platform with our eCommerce partners to make sending easy. A MyPost Business account even saves you money, as you move up the five savings bands (up to 40% on eligible domestic parcels and up to 35% on international postage)².

What type of shipping strategy should you use?

Should you offer free shipping to everyone? Or just orders over a certain amount? A flat rate?

Your shipping strategy will depend on your volume of sales, the average dollar value of each order, or even how much your orders weigh.

Here are the most common shipping strategies that eCommerce retailers utilise:

• Flat rate shipping. This keeps things simple for your customers, with one fixed fee for shipping that you can clearly sign-post at checkout. To work out a flat rate that’s fair to your customers and good for your business, calculate your average cost of shipping and round it to an even amount.
• Free shipping. Who doesn’t love a freebie? Free shipping may help you reduce shopping cart abandonment, pull in new customers and build more loyal relationships with your existing customer base. This strategy works well if your products are mostly small and don’t cost much to send.
• Free shipping over a certain amount. This is a common strategy, and a great way for you to increase customers’ basket sizes. The increased sales can help you cover your logistics costs. If you take this route, don’t forget to promote the offer in a promo bar at the top of your website or on your checkout page, so customers know how much to spend to qualify for free shipping.
• Actual rates (breaking even). With this option, you simply charge the customer the actual cost of shipping. To calculate this cost at checkout, you can add an Australia Post API to automatically calculate shipping rates for customers at checkout – and then simply add this rate to the final cost of purchase.

Whichever route you take, keep in mind that you can always change your shipping strategy down the track, or offer free shipping occasionally as part of your promotional strategy. Keep monitoring things like cart abandonments at the shipping stage, as well as the impact of shipping costs on your bottom line, to assess whether your current strategy is working well.