Let’s set up the scenario first. We want to

- have a fixed price of $10 for the first 5 km
- charge $1 per km after 5 km

To do this, we’ll have to set up 2 rates; one for up to 5 km, and one for distances more than 5 km

For this example we’ll use price-based rates, but you can use weight-based rates too. If you don’t know how to create a rate yet, please check out our create a rate guide.

### Rate 1 - Up to 5 km

1. Let’s give this rate a recognizable name—Delivery up to 5 km.

2. For **Rate limits**, we’ll set

- no minimum order price
- no maximum order price
- no minimum distance
- maximum distance of 5 km

3. For **Pricing**, we’ll set the base delivery fee to $10, and no price per kilometer.

4. Click **Create rate**.

Now that we have the first rate set up, let’s create the next rate.

### Rate 2 - More than 5 km

1. Let’s give this rate a recognizable name—Delivery more than 5 km

2. For **Rate limits**, we’ll set

- no minimum order price
- no maximum order price
- minimum distance of 5 km
- no maximum distance

3. For **Pricing**, we’ll set the base delivery price to $5, and price per kilometer to $1.

4. Click **Create rate**.

You should now have these two rates:

### Explanation

You might be wondering why we need 2 rates, and why the pricing of rate 2 looks so complicated.

The main thing to remember here is that delivery price per kilometer **ignores minimum distance**. In other words, delivery price per km always calculates from 0 km, no matter what you put as minimum distance. This means you might need to do a bit of light math to get the base delivery fee for rate 2 set up.

You can use this formula to help you calculate that base delivery fee:

Base Fee from Rate 1 - (Minimum Distance * Price per Distance) = Base fee for Rate 2

I know formulas can be hard to understand on their own, so let’s put this one into action.

#### Example 1

For the first example, let’s use the numbers we used at the beginning of this article.

- Base fee (for Rate 1) is $10 for the first 5 km
- $1 per km (Price per distance) after 5 km (Minimum distance)

10 - (5 * 1) = 5

#### Example 2

For this example, let’s use something straightforward

- Base fee (for Rate 1) is $5 for the first 5 km
- $1 per km (Price per distance) after 5 km (Minimum distance)

5 - (5 * 1) = 0

#### Example 3

Let’s use bigger numbers this time.

- Base fee (for Rate 1) is $30 for the first 15 km
- Price per km is $5 (Price per distance) after 15 km (Minimum distance)

30 - (15 * 5) = -45

As you can see here, base delivery fee can indeed go into negatives.

Hope this helped you set up your rates. If not, send us an email to [email protected] and we’ll be happy to help you out.