There are many different ways you can price the services that your transportation or delivery business offers.

One of our aims with the TransitQuote Pro delivery price calculator is to be as flexible as possible so that the widest possible range of pricing schemes can be automated on your business website.

With so many options for price calculation options available, we often receive questions from new customers asking the correct way to set up their rates.

In this article we will have a look at some examples of commonly used pricing schemes and how to set them up in TransitQuote Pro.

### Miles or Kilometers?

The plugin uses the distance provided by Google Maps to determine which rates to use. This works with either kilometres or miles. You can choose which one to use in the Map Options of the plugin.

### The Rates Tab Explained

All the rates are set up in the Rates tab of the plugin.

To understand the examples there are a few terms to be aware of:

**Rates**

A single pricing rate in TransitQuote consists of up to three parts – a set price, price per hour and price per mile. These are calculated and added together to give the price for a journey.

In the rates tab a single rate is shown as a single row in the table at the bottom of the Rates tab.

TranistQuote allows for multiple rates to be set up so you will see there can be multiple rows for each service and vehicle combination.

**Boundary Distance**

To determine which rates will be used for a given journey, TransitQuote Pro uses a boundary distance. This is the upper boundary or the maximum length of the journey for a given set of rates.

When your customer enters a journey in the booking form, the Google Maps API tells us the total distance for the journey.

The total journey distance is compared against each of the Boundary Distances in the rates table to determine which rates to use.

For example you might have 3 rows in your rates table with boundary distances 10km 40km and one row without a boundary distance.

- Journeys with a total distance of between 0 km – 10 km will use the rates in the row with the 10 km upper distance boundary.
- Journeys with a total distance between 10 km – 40 km will use the rates in the row with the 40 km upper distance boundary.
- Journeys over 40 km will use the rates in the row with no upper distance boundary (this is show as distance boundary of 0 in the rates table)

**Set Price **

The set price is a single amount which is added to the total price for all journeys billed at the rate in question. The amount is the same regardless of the distance.

You can use Set Price for minimum charges, for example all journeys under 10 miles could cost $15 regardless of the exact journey length.

**Price Per Mile or Kilometer**

This figure is multiplied by the total journey distance – the exact number of miles or kilometers in the whole journey.

**Price Per Hour**

This figure is multiplied by the estimated travel time for the journey. The travel time is provided by Google Maps.

**The Calculation**

The price calculation for a single rate is **Set Price** + (total distance x **Price Per Mile/Km** ) + (total estimated travel time in hours x **Price Hour** )

### How To Work Out The Rates For Your Business

An easy way to work out how to enter your rates is to go through the following steps:

1) Identify the distance boundaries if you use them. If you charge the same prices regardless of distance, you only have one rate which has a distance boundary of 0.

For each distance boundary:

2) If you charge based on distance travelled, identify or choose a **price per mile or km **for journeys up to the distance boundary.

3) If you charge based on travel time, identify or choose a **price per hour** for journeys up to the distance boundary.

4) Does the business need a minimum price for journeys inside this distance boundary?

To answer this question, you must ask:

**Does the business need a minimum price for journeys inside a distance boundary? **

If the business is specifying a price per mile/km for the *shortest *journeys (less miles than the boundary) then there is no minimum price and no Set Price. The answer is **no**. We don’t need to work out a set price to offset the cost of miles.

If the business does not specify a price per mile/km for the *shortest *journeys (less miles than the boundary) but instead charges a single price, then it is using a minimum price which is the Set Price for journeys below the boundary. The answer is **yes**.

**If Yes: **

- Journeys inside the boundary will need to have a set price for row 1. This is the set or minimum price the business has specified.

- Journeys over the boundary will need to have a set price for row 2 if miles are billed at a different amount. If miles are billed at a different amount then we work it out as per example 5:

5) Add together any additional costs or charges that are included for every journey within this distance boundary. Enter the total as **Set Price.** For example, if the company has several extra costs which are added to every job (say, overnight stay, loading fee, unloading fee, parking fee) and the extra costs are always the same price, then they can be added together and the Total put in the “Set Price” field.

**Tip: Enter The First Rate With No Upper Distance Limit**

It is very important to note that there should always be a rate with 0 as the upper limit. This covers journeys longer than your highest boundary distance.

If your customer asks for a quote for a 60 mile journey and your highest boundary distance is 50 km then the 60 mile journey will be calculated as $0.

A rate with 0 upper boundary distance must be in place to cover journeys over the highest boundary distance.

## Examples

### Example 1

**Question**

How can I set up a flat rate for my parcel service? I would like to quote £150 for every 200 miles of distance covered.

**Working it Out**

1.Identify the distance boundaries if any.

In this example the calculation does not change depending on the length of the journey, so there is only one rate (a flat rate) which has an upper boundary distance of 0 as there is no upper limit.

2. What is the price per km?

We have been given the price per 200 miles as £150 so to work out the price per 1 mile we have to divide £150 by 200 miles giving $0.75 per mile.

3. What is the price per hour?

There is no price per hour.

4. What is the set price?

The price is calculated based on the distance only, so there is no set price.

Now enter the solution below into a single row in the rates table.

**The Solution**

There will be a single row in the rates table:

Boundary Distance = 0

Set Price = 0

Price Per Mile = 0.75

Price Per Hour = 0

### Example 2

**Question: **The client has A set rate of £50 for journeys up to 30 miles.

**Working it Out**

1.Identify the distance boundaries if any.

There are two distance boundaries; 30 miles and after that there is no upper limit. So there is an upper boundary distance of 0.

2. What is the price per mile for each distance boundary if there is one?

There is no price per mile.

3. What is the price per hour?

There is no price per hour.

4. What is the set price?

It is £50 for up to 30 miles.

Enter the rate for this boundary into the rates table.

**The Solution**

There will be two rows in the rates table:

**Row 1**

Boundary Distance = 30

Set Price = £50

Price Per Mile = 0

Price Per Hour = 0

**Row 2**

Boundary Distance = 0

Set Price = 0

Price Per Mile = 1.67

Price Per Hour = 0

### Example 3

**Question: **My customers pay £1.5 for couriers delivered up to a distance of 300 kilometres and £1.2 for couriers delivered up to 1000 kilometres.

**Working it Out**

1.Identify the distance boundaries if any.

In this example, we have two distance boundaries of 300 and 1000 kms. Also, for all journeys above 1000 kms, we will add 0 as the distance boundary.

2. What is the price per km?

- £1.5/km up to 300 kms
- £1.2/km up to 1000 kms
- £1.2/km over 1000 kms

3. What is the price per hour?

There is no price per hour.

4. What is the set price?

It is £1.5 for journeys up to 300 kms, and £1.2 for journeys up to 1000 kms.

It is also £1.2 for journeys above 1000 kms. So we will set the distance boundary to be 0 in the third row and the set price at £1.2.

Enter the rate for this boundary into the rates table

**The Solution**

You will need to create three different rows with a Set Price for each of them:

**Boundary Distance = 300**

- Set Price = 450
- Price Per Mile = 1.5
- Price Per Hour = 0

**Boundary Distance = 1000**

- Set Price = 1200
- Price Per Mile = 1.2
- Price Per Hour = 0

**Boundary Distance = 0**

- Set Price = 0
- Price Per Mile = 1.2
- Price Per Hour = 0

### Example 4

**Question**: This is what I need to achieve:

Distance up to 500 miles charged at £1.30 per mile.

Distance up to 1000 miles charged at £1.30 per mile + £35.00 overnight charge.

Distance up to 1500 miles charged at £1.30 per mile + £70.00 overnight charge.

**Working it Out**

1.Identify the distance boundaries if any.

In this example, we have three distance boundaries of 500, 1000, and 1500 miles. Also, for all journeys above 1500 miles, we will add 0 as the distance boundary.

2. What is the price per km?

- £1.3/mile up to 500 miles
- £1.3/mile up to 1000 miles
- £1.3/mile up to 1500 miles

3. What is the price per hour?

There is no price per hour.

4. What is the set price?

The set price is £35 for up to 1000 miles

The set price is £70 for up to 1500 miles

**The Solution**

You will need to create 4 different rows:

**Boundary Distance = 500**

- Set Price = 0
- Price Per Mile = 1.3
- Price Per Hour = 0

**Boundary Distance = 1000**

- Set Price = 35
- Price Per Mile = 1.3
- Price Per Hour = 0

**Boundary Distance = 1500**

- Set Price = 70
- Price Per Mile = 1.3
- Price Per Hour = 0

**Boundary Distance = 0**

- Set Price = 0
- Price Per Mile = 1.3
- Price Per Hour = 0

### Example 5

**Question**: My rate is fixed £1100 for up to 500 km, and 0.70£ per km over 500 km. For example, a 600 km trip should cost 1100 + 0,7*100 = 1170£. I cannot set the rates correctly to achieve that.

In this example we need a minimum price of £1100 for up to 500 km

The number of kilometers over 500km are charged at a different price per km than the kilometers under 500 km.

£1100 divided by 500 km works out at £2.2 per km for a journey of 500km

We can see that this is a different (higher) price per km for the first 500 km of the journey, compared to £0.70 per for each km after 500km.

When TransitQuote calculates the final price it only uses 1 row in the rates table and this is based on the total journey length.

This means that we need to work out a set price in the row for journeys over 500 km which will work out the correct price.

**Working it Out**

1.Identify the distance boundaries if any.

In this example, we have one distance boundary of 500 km.

2. What is the price per km?

For journey above 500 km, it is 0.7£/km

3. What is the price per hour?

There is no price per hour.

4. What is the set price?

Set Price for row 1 = 1100

When working out row 2, we need to:

- Work out what the price would be for a 500 km journey (the miles inside the boundary) at the rate for over 500 km
- This price will be lower than the price we want, so we need to add a set price that makes up the difference.

Full mileage cost for row 1 = 500 km x £0.70 = £350

We know that business wants the first 500 km billed at £1100 so we need to add a set price of £750 in row 2.

Set Price for row 2 = 1100 – 350 = 750

**The Solution**

You will need to add a set price in the second row.

The second row is used for journeys longer than the distance boundary of 500.

The set price for row 2 should be the set price in row 1 minus the full mileage cost for the 500 km distance boundary.

Set Price for row 1 = 1100

Full mileage cost for row 1 = 500 x 0.7 = 350

Set Price for row 2 = 1100 – 350 = 750

So when the Set Price for the row with distance boundary 0 is changed from 0 to 350, the calculation will give 1170 for a journey of 600 miles.

**Boundary Distance = 500**

- Set Price = 1100
- Price Per Mile = 0
- Price Per Hour = 0

**Boundary Distance = 0**

- Set Price = 750
- Price Per Mile = 0.7
- Price Per Hour = 0

**In Conclusion**

As you’ve seen, there can be a variety of scenarios of setting up rates based on your business model.

We hope this tutorial clears up any confusion over how to set up rates in TransitQuote and will help you and your business serve your customers better.