Zone-Based Pricing
Also known as: Zone Pricing, Zone Rates, Distance-Based Pricing
Definition
Zone-based pricing calculates shipping costs based on the distance between where a package originates and where it’s delivered. The farther the package travels, the more zones it crosses, and the higher the shipping cost.
How Zones Work
Carriers divide the country into numbered zones (typically 1-8 or 1-9) based on distance from your shipping origin:
| Zone | Typical Distance |
|---|---|
| Zone 1 | Local (0-50 miles) |
| Zone 2 | 51-150 miles |
| Zone 3 | 151-300 miles |
| Zone 4 | 301-600 miles |
| Zone 5 | 601-1000 miles |
| Zone 6 | 1001-1400 miles |
| Zone 7 | 1401-1800 miles |
| Zone 8 | 1801+ miles |
| Zone 9 | Alaska, Hawaii, territories |
Key concept: Zones are calculated from YOUR location, not a central point. A shipment from New York to Los Angeles is Zone 8, but from Denver to Los Angeles might only be Zone 5.
Zone Pricing in Action
A 5 lb package with USPS Priority Mail might cost:
- Zone 1-2: $9.50
- Zone 4: $12.75
- Zone 6: $16.20
- Zone 8: $21.50
The same package, same weight—but dramatically different prices based on distance.
Impact on E-commerce
Understanding zones is critical for online sellers:
- Warehouse location matters - Central locations (like Kansas or Texas) minimize average zone costs
- Shipping calculators - Real-time zone lookup ensures accurate checkout pricing
- Free shipping thresholds - Higher thresholds for distant zones can protect margins
- Multi-warehouse strategy - Fulfilling from multiple locations reduces zone distances
How to Look Up Zones
- USPS: Use the Zone Chart tool at postcalc.usps.com
- UPS/FedEx: Zone charts available in shipping software or carrier portals
- Shipping software: Most calculate zones automatically from ZIP codes
Strategies to Reduce Zone Costs
- Distribute inventory - Ship from locations closer to customers
- Use regional carriers - Often cheaper for nearby zones
- Flat rate for distance - USPS Flat Rate ignores zones entirely
- Ground vs. air - Ground services typically have lower zone sensitivity