A product can be cheap to make, priced well, and still lose money the moment it's loaded into a container. Here's the part of the cost that does the quiet damage.
Most people decide whether a product is worth making by looking at what it costs to manufacture and what it can sell for. That gap looks healthy, the decision gets made, and then the freight invoice turns up and eats it. The relationship between freight and product margins catches out more first-time importers than anything else, because it doesn't show up in the factory quote and it doesn't behave the way people expect — a light product can cost a fortune to ship, and a heavy one can be cheap. Working this out before you commit is a core part of how we find and fix already-selling products: a great product with broken freight economics isn't a great product, it's an expensive lesson.
How freight and product margins are connected
The link between freight and product margins is simple to state and easy to underestimate: every dollar it costs to move a unit from the factory to your customer comes straight out of the margin you thought you had. Manufacturing cost is what everyone focuses on, because it's the number the factory gives you first. But a landed unit also carries freight, and freight is charged on the space a product takes up as much as on what it weighs. If your margin looked fine on the ex-factory price and you never added shipping properly, you don't have the margin you think — you have a smaller one, or none at all. The products that survive are the ones where freight is a rounding error against the selling price. The ones that die are where it's a third of it.
Volumetric weight: the number that catches everyone out
Here's the part almost nobody expects. Freight companies don't just charge by actual weight — they charge by whichever is greater: actual weight, or volumetric weight (also called dimensional weight), which is the space a package occupies converted into a weight figure. The logic is fair from their side. A box of pillows and a box of bolts take up the same room on a plane or in a container, so if they charged by the kilo alone the pillows would ship almost free. Volumetric weight is worked out from the dimensions — length × width × height, divided by a standard figure (commonly 5,000 for air freight, giving a result in kilograms). Bulky, light products get charged on their size, not their scale weight, and that's where a cheap product quietly becomes an expensive one to land. If your product is mostly air — anything with a big shell, foam padding, or empty space in the box — volumetric weight is the number that decides your freight bill, and it's usually far higher than the physical weight you were picturing.
Freight-to-value: the ratio that decides if a product is worth importing
The single most useful check is the freight-to-value ratio: what it costs to land one unit versus what that unit is worth. A product that sells for a lot and ships small has a tiny ratio and forgives almost any freight cost. A product that sells cheap and ships big has a brutal ratio and can be underwater before it leaves the port. This is why the same freight cost can be irrelevant for one product and fatal for another — it isn't the freight number on its own that matters, it's the number relative to the value you're shipping. When we look at a candidate, this ratio is one of the first things we run, because it can kill an idea in a minute or save weeks of work on something that was never going to pay. It sits right alongside the full landed cost of importing to Australia — freight is the biggest and most misjudged line in that calculation, and volumetric weight is why.
How to protect your margin before you commit
You have real levers here, and most of them are decided at the product stage rather than the shipping stage — which is exactly why freight is a product decision, not a delivery cost. You can design or choose a product that packs flat, nests, or ships disassembled, so it takes less room per unit. You can strip out oversized packaging, which is often pure shipped air. You can favour products with a high value-to-size ratio in the first place. You can check whether sea freight changes the maths for something bulky, where the slower, cheaper route makes a marginal product viable. And you can run the freight numbers on real dimensions — the actual carton, not a guess — before you place an order. The difference between a product that clears a healthy margin and one that clears nothing is often a few centimetres of box nobody thought to question.
Frequently asked questions
Why does freight cost so much more than expected?
Usually because of volumetric weight. Freight is charged on whichever is greater — actual weight, or the space a package takes up converted into a weight figure. A light but bulky product gets billed on its size, not its scale weight, so a shipment you expected to be cheap because it was light can cost far more once the dimensions are measured.
What is a good freight-to-value ratio for a product?
There's no single magic number, but the principle is that freight should be a small fraction of the unit's selling value — a rounding error, not a headline cost. The higher a product's value relative to the space it occupies, the more freight it can absorb. Cheap, bulky products have the worst ratios and are the most likely to lose money once shipping is counted.
How do I reduce freight costs on an imported product?
Reduce the space each unit takes up. Products that pack flat, nest, or ship disassembled cost less to move, and oversized packaging is just shipped air you're paying for. Choosing higher-value, lower-volume products from the start helps most, and for bulky items sea freight is often far cheaper than air if you can wait.