How to Calculate Shipping Cost with VLOOKUP

 

If you are in the transport business or import-export business then you know that shipping cost calculations is an important part of the business. And most of the time you have different shipping costs for different ranges of weights. So in this article, we will learn how to calculate shipping costs for given weight using VLOOKUP instead of multiple IFs.

Generic Formula for Shipping Cost Calculation

=VLOOKUP(weight,sorted_cost_list,cost_per_Kg_Col,1)*weight

Weight: It is the weight of which you want to calculate shipping cost.

Sorted_Cost_List: It is the table that contains the cost weights. The first column should be weight, sorted in ascending order.

Cost_per_Kg_Col: It is the column number that contains the cost per kg (or your unit) for shipping.

We will be using an approximate match which is why we are using 1 as the match type.

Let’s see an example to make things clear.

Example: Calculate the Shipping Cost of Goods by Weight

So here we have a sorted list of cost of freight by weight. The list is sorted in ascending order by weight. The cost of shipping is $10 if weight is less than 5 kg. If Weight is less than 10 kg then the cost is $9. And so on. If the weight is 35 kg or above the shipping cost per kg is $5.

We have a list of consignments that we need to ship. The weight is mentioned in the F column. We need to calculate the total cost for each shipment in the G column.

Let's use the above mentioned generic formula:

=VLOOKUP(F4,$C$4:$D$8,2,1)*F4

Copy this formula down. And you have the total freight cost calculated in an instant. You can use it as the shipping cost calculator too. Just change the value in weight cells and the cost of the weight will be displayed.

How does it work?

We are using an approximate match of VLOOKUP to calculate the cost that needs to be applied on a given weight. 

In the example above, we look for 2 in the table. VLOOKUP searches upside down. First it checks 0.1. It moves to next and finds the next value 5. Since 5 is greater than 2, VLOOKUP steps back and picks 0.1 as a match and returns a cost of 0.1 which is $10. Finally this cost is multiplied by the weight of consignment, which is 2 here and we get $20.

The step by step calculation looks like this:

=VLOOKUP(F4,$C$4:$D$8,2,1)*F4
=VLOOKUP(2,$C$4:$D$8,2,1)*2
=10*2
=20

A nested IF equivalent would look something like this,

=IF(F4>=35,5,IF(F4>=20,7,IF(F4>=10,8,IF(F4>=5,9,10))))*F4

 

Isn't it too lengthy. Imagine if you had 100 intervals, then using a nested IF will not be a smart option. Using a VLOOKUP in such a conditional calculation is better than IF and IFS.

Here we are calculating shipping costs by weight. Similarly, you can calculate shipping costs by miles or other constraints.

So yeah guys, this is how you can calculate shipping costs in Excel easily. I hope this blog helped you. If you have any doubts or special requirements, ask me in the comments section below. I'll be happy to answer any Excel/VBA related questions. Till then keep learning, keep Excelling.

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