What happens if I charge a flat Rs 49 but shipping costs me Rs 70?
Undercharging shipping by a small amount per order adds up fast, and this example shows the monthly leak and how a Rs 60 compromise changes it.
A low, round shipping charge feels attractive. Rs 49 looks friendly on a checkout page. The trouble starts when the courier invoice says Rs 70. The Rs 21 gap does not appear on any single order as a problem, so it hides until you add up a month.
The size of the leak
Say your flat charge is Rs 49 while your real average cost is Rs 70.
- Gap per order: Rs 70 minus Rs 49 is Rs 21.
- Orders in the period: 300.
- Total absorbed: 300 times Rs 21 is Rs 6,300.
That Rs 6,300 came out of your profit. If a typical order earns Rs 150 after costs, you quietly gave away the profit of 42 orders.
Fixing it in three ways
Charge the full cost. At Rs 70, the gap is zero. Customers pay what delivery actually costs, and your profit per order is untouched. The downside is a higher number at checkout, which may reduce conversion for price-sensitive shoppers. I cannot say by how much for your shop, so test it.
Meet halfway. A Rs 60 charge cuts the gap to Rs 10 per order. Over 300 orders, you absorb Rs 3,000 instead of Rs 6,300. You save Rs 3,300 compared with Rs 49 and your customer pays only Rs 11 more.
Raise the product price slightly. Moving price up by a few rupees lets you keep the low shipping figure. But it carries the folded-in issues described in our post on hiding shipping in the product price.
Check what your real cost is
Do not guess the Rs 70. Pull your last month of courier invoices, add up what you paid and divide by the number of shipments. Include any cost of failed deliveries and returns if you pay for them. If your average varies sharply by zone or weight, a single flat figure will always be wrong for some orders. Our guide to shipping across India explains why costs differ by distance.
When a flat fee is still fine
A flat fee is simple and customers like simplicity. It works when your parcels weigh roughly the same and your customers are spread across similar zones. If you are unsure, the next post, flat shipping versus weight-based pricing, shows when a single figure helps and when it hurts.
Use free shipping on purpose, not by accident
Under-collecting is effectively giving partial free shipping to everybody. If you want to offer free delivery, do it deliberately above a threshold. That way light orders pay while bigger ones get the perk. Read setting a free shipping threshold to calculate a level that protects profit.
Review quarterly
Courier rates change and your mix changes. Put a reminder on your calendar to compare your charge with your real average cost every quarter. Five minutes with a calculator can stop a slow leak.
What to remember
A small gap multiplies by your order count. Rs 21 times 300 is Rs 6,300. Charge the real cost, meet it halfway, or build the difference into pricing, but do it knowingly. Silent undercharging is one of the cheapest mistakes to fix once you can see it.