I'm Paying Shipping Separately Every Time I Reorder Small Quantities — How Do I Calculate Whether Larger Raw-Material Orders Would Actually be Cheaper?

Split the shipping bill first

Every delivery charge, however it is presented, has two kinds of cost inside it. Some of it is paid per shipment: a fixed parcel fee, a handling charge, a minimum-weight charge that bills a 300 g parcel as if it were 1 kg. The rest is paid per kilo, and scales with what you ship. If you ship 15 kg of wax in a month, the per-kilo part of the bill is about the same whether it arrives as one parcel or four. Only the per-shipment part multiplies with frequency.

There is a third cost that never appears on an invoice: your time. Each order means choosing quantities, checking out, paying, tracking, receiving, checking for breakage and shelving. For a maker who is also the production team, that time comes straight out of pouring. Put a rupee value on it — this page uses an example of ₹80 an order — and add it to the per-shipment part. Together they are your cost per order, S.

Weekly, monthly or quarterly?

The example business makes 80 container candles a month in four scents of 20 candles each: 200 g at an 8% load, on Luxury Soy Wax CSI 464 at ₹507.40 a kilo, with Eco Candle Wicks Thin C1 (₹5.90) and White Matte Glass Jars (₹70.80). Fragrance is bought in 100 g bottles. The goods cost the same whatever the order rhythm, because CSI's wax, wicks and these oils are priced flat per unit above their smallest pack.

Now order the same monthly goods at five different rhythms. Ordering cost is orders a month × S. Holding cost is the example 2% a month on the average stock, which is half of each order's value. Per-kilo freight is left out because it is the same in every row.

Weekly ordering costs ₹782.35 a month in delivery charges and time, and almost nothing in holding. Monthly ordering costs ₹367.97. The difference, ₹414.39 a month or ₹5.18 a candle, is pure overhead: the same wax, oil, wicks and jars arrive either way. Going further, to every two months or quarterly, starts to cost more again, because the holding cost on a bigger stock grows faster than the ordering cost falls. The bottom of the curve for this business sits at about 1.1 orders a month — in practice, a monthly order.

The order-size formula

The bottom of the curve has a well-known formula, the economic order quantity. Written in rupees rather than units, which suits a mixed candle order:

For the example, √(2 × ₹19,796.54 × ₹170 ÷ 0.02) ≈ ₹18,345.06 per order, or about 1.08 orders a month. The formula is forgiving: the total-cost curve is flat near its bottom, so ordering monthly instead of every 0.9 months changes the total by only a few rupees. That is why a simple monthly rhythm is the right answer for most small businesses, and why weekly or daily top-ups — far up the steep side of the curve — are expensive.

Two inputs move the answer most. A higher cost per order — expensive delivery to a remote pin code, a long ordering process — pushes the best size up and the frequency down. A higher holding rate — expensive credit, cramped storage, a material that can deteriorate — pushes it the other way. If both are high, you are in a genuine trade-off; if S is high and h is low, bigger orders win clearly. The formula also has limits: it assumes steady use, so a festive peak or a scent you may drop needs judgement on top. I'm Getting Better Wholesale Prices on 100 Kg of Wax — How Many Months of Consumption Should I Have Before Ordering That Much? and I Can Save 10% by Buying Six Months of Candle Raw Materials at Once — How Do I Compare the Saving Against Cash Being Locked in Inventory? cover the holding side in more depth.

A useful rule of thumb from that table: if the fixed cost of an order is more than about 5% of what it buys, the order is too small to be efficient, unless it prevents a stock-out. At the example ₹170, that means orders below roughly ₹3,400.00 should be rare. A single 100 g top-up of Neroli (₹665.52) carries fixed costs equal to 26% of its value.

When a small order is the right order

Some small orders are worth every rupee of freight. A top-up that prevents a stock-out of a bestseller costs far less than a week of lost sales; My Bestselling Fragrance Keeps Running Out — Should I Hold More Fragrance Oil Inventory than I Hold for Slower-Selling Candle Scents? shows that a single day out of stock can cost more than a month of holding extra. A tester order of new scents in 15 g or 50 g sizes is small by nature, and it is the cheapest way to avoid buying the wrong oil in quantity. A custom or corporate order with its own materials is a separate job and should be costed separately.

The goal is to make routine replenishment regular and full, so that small orders are the exception. Most makers who pay shipping every week are not doing it by choice: they reorder because something ran out. The fix is a reorder point for each material, checked on a fixed day, so the month's order carries everything that will be needed before the next one. I'm Growing Quickly but Don't Want to Run Out of Wax — How Do I Set a Reorder Point Based on Monthly Consumption and Supplier Lead Time? and I'm Constantly Placing Emergency Raw-Material Orders — How Do I Calculate Minimum Stock Levels for Wax, Fragrance, Wicks and Jars? set those levels.

The materials in the example

The wax that makes up the weight of every order, and two of the four scents — one that is flat-priced and one with a small kilo break.

Switching from weekly to monthly

The first monthly order is the expensive one: you are buying a month of stock instead of a week, so cash out rises once while the saving arrives slowly. In the example, the first monthly order is ₹19,796.54 against about ₹4,568.43 for a weekly one. Plan it for a month when cash is comfortable — not the week before Diwali stock is due. Once the rhythm is set, each month costs the same goods and fewer delivery charges.

Order frequency is one half of the shipping question. The other half is how many separate parcels a single month's buying arrives in — wax from one place, jars from another, fragrance on its own. I'm Ordering Wax, Wicks, Fragrance and Jars from the Same Supplier — Can Consolidating Orders Reduce My Actual Landed Raw-Material Cost? works through consolidating those into one landed order, and At What Monthly Candle Production Volume Should I Move from Retail-Sized Raw-Material Packs to Wholesale Purchasing? covers when volumes justify moving to quoted wholesale quantities altogether.

Frequently asked questions